Spring Budget: Jeremy Hunt urged to make history and become fourth Chancellor in a century to cut duty on Scotch Whisky

Chancellor Jeremy Hunt will deliver the likely final Budget before the election on March 6

Jeremy Hunt has been urged to make history and become just the fourth Chancellor in a century to cut duty on Scotch whisky.

The Scotch Whisky Association (SWA) has called for the Chancellor to back businesses with the first spirits duty cut since 2015 ahead of delivering his Spring Budget on Wednesday next week.

Only three Chancellors – Anthony Barber, Ken Clarke and George Osborne – have cut duty on Scotch in the past 100 years.

Only three Chancellors have cut duty on Scotch in the last 100 years.

It follows analysis from the SWA that found the Treasury is losing £17 million a month since duty was increased by 10.1 per cent in August last year. The figures have indicated the Exchequer could generate £1.6 billion for public services by 2030 if duty is cut by 5 per cent on Wednesday and then frozen for the next four years.

According to SWA figures, freezes in duty between 2018 and 2023 generated £1.4bn more for the Treasury than if tax on Scotch had risen annually by inflation.

Graeme Littlejohn, director of strategy and communications at the Scotch Whisky Association, said: “It’s incredible to think four times more people have walked on the moon than have cut duty on a dram in the last 100 years. Jeremy Hunt can be just the fourth Chancellor in a century, and first in a decade, to reduce the tax on Scotch whisky. He should do so not to write himself into the history books, but because it’s the right thing to do.

“We levy more tax on our national drink than almost every country in the world. Increasing the rate of duty last August hasn’t worked and is costing the Treasury money. A cut in duty is good for the public finances, good for pubs, good for business, and good for consumers.”

Survation polling on behalf of the SWA previously found 57 per cent of Scots think duty on whisky should be cut in the Budget, with 58 per cent thinking the UK government should be doing more to support the Scotch whisky industry. The survey also found three in four Scots (74 per cent) say cutting tax on Scotch whisky would help the hospitality sector.

UK excise duty on a dram is the highest of all the G7 countries and fourth highest in Europe, with patrons of Parisian bars paying half the duty on Scotch whisky as levied in the UK.

The calls were echoed by the Scottish Chambers of Commerce, with chief executive Dr Liz Cameron urging ministers to stick their promises in the 2019 manifesto.

She said: “The average priced bottle of Scotch whisky faces a tax burden of 73 per cent. This is unacceptably among the highest rate of taxation among G7 countries for an industry that represents over a quarter of all UK food and drink exports.

“This government pledged to support the industry in its 2019 general election manifesto. This Budget must see that promise lived up to with a reversal of the 10 per cent tax increase that was announced at last year’s Spring Budget.

“This will not only support one of Scotland’s world-leading products, but also benefit the Treasury in revenue, boost the struggling hospitality sector, and consumers willing to raise a glass to Scotch whisky.”

Lib Dem MP Alistair Carmichael urged ministers to “make their mistake last year right”. He said: “If levelling up means anything to this government, then they should back distilling communities in Scotland.

“This is an industry that is of critical importance to the Highlands and Islands in particular, and the wider Scottish economy. They provide vital high-quality jobs in rural areas and boost our tourism sector. We need to support their growth, not drag them down with ever-higher taxes.

“Scottish Conservatives have never been slow to talk up industry concerns when it was the SNP and Greens causing chaos and confusion over the deposit return scheme or advertising bans. If they cannot deliver results now, then distilling businesses and their communities will rightly ask what is the point of them.”

It comes with Chancellor said to be considering a squeeze on public spending plans to deliver tax cuts in the fiscal event on March 6.

Mr Hunt faces continued pressure from Conservatives to cut taxes when he delivers what is likely to be his final Budget before the next election, as the overall tax burden approaches record levels. He is thought to be considering abolishing the non-dom status as a potential way of raising money which could be used to fund tax cuts.

Elsewhere, the SNP said Mr Hunt must send all of the promised consequentials connected to HS2 project to the Scottish Government.

The UK government's flagship transport proposal was scrapped by Prime Minister Rishi Sunak late last year – a proposal that would have reduced train times between London and Glasgow.

Mr Sunak's decision raised concerns with major industry experts, with the Institute of Directors in Scotland saying the proposals were essential in helping Scotland's businesses grow.

Gavin Newlands, the SNP's transport spokesperson, said "Scotland should not miss out because the UK government can't deliver on their promises", and stressed the promised funding should be honoured.

He said: "Next week's Spring Budget gives the Chancellor the perfect opportunity to finally deliver the HS2 consequentials due to the Scottish Government. Scotland should not miss out because the UK government can't deliver on their promises.

"However, when it comes to transport, broken promises is somewhat of a norm for this UK government. Whether it's HS2 or the ridiculous Boris Johnson bridge from Scotland to Northern Ireland, you just cannot trust a word the Tories say”.

The SNP also warned Mr Hunt against "taking the axe to public services" at the UK Budget, instead urging the Chancellor invest in public services.

They are calling for the Chancellor to boost NHS spending by £15 billion, invest at least £28bn a year in green energy, and use a £12bn wealth tax to fund a £400 annual energy bill discount for households.

SNP Westminster leader Stephen Flynn said: "The next general election will be a clear choice between the pro-growth SNP and the pro-cuts Tories and Labour Party, who are starving the UK of economic growth by imposing Brexit and damaging Tory fiscal rules that will see deep austerity cuts to the NHS and public services.

"The UK government has already slashed Scotland's budget by more than £2bn this year – and imposed real-terms cuts to the NHS across the UK. Enough is enough. Instead of taking the axe to public services, the Chancellor must invest to improve services, boost economic growth and help families with the soaring cost of living in Broken Brexit Britain.”

An HM Treasury spokesperson said: "We are fully backing the spirits sector by cutting or freezing their alcohol duty at the majority of fiscal events over the past decade – a real-terms tax cut worth £12.9bn.

“The government has acted to remove punitive tariffs imposed on the US market and are protecting the interests of the sector in trading agreements, ensuring that they face lower tariffs for export, and that the unique characteristics and global reputation of UK spirits are protected."