Budget 2015: Scotch whisky duty cut

Scotch whisky is 'one of the UK's biggest exports.' Picture: Donald MacLeod

Mr Osborne also cut cider duty by 2 per cent and reduced the duty on beer by 1p a pint.

The Scotch Whisky Association (SWA) hailed the Chancellor’s decision to reduce the tax on spirits by 2 per cent, in what it said was the first cut in spirits duty in almost 20 years and only the fourth for whisky in the past century.

Duty payable on a 70cl bottle of Scotch whisky at the average price of £12.90 has been reduced by 16p, from £7.90 to £7.74, with the total tax burden, including VAT, now standing at £9.89, or 77 per cent of the average price of a bottle, down from 78 per cent.

David Frost, SWA chief executive, welcomed the move, which he said was “fair to consumers and a significant boost to a home-grown industry” in Scotland.

He went on: “This is a historic decision and only the fourth time whisky duty has been cut in a century.

“The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.”

Scotland’s biggest distiller, Diageo, also hailed what it said was a “historic decision” to cut the duty on spirits.

Andrew Cowan, managing director of Diageo Great Britain, said: “The alcohol industry generates billions for the economy and flies the flag for the UK abroad.

“This cut will mean that a 400-year historic industry like Scotch whisky will remain a crucial, and vibrant, part of the British economy for many more years to come.”

Duties on tobacco and gaming were unchanged and wine duty was frozen, the Chancellor said, as he announced the reductions in duty.

Mr Osborne said: “Last year, I cut beer duty for the second year in a row and the industry estimates that helped create 16,000 jobs.

“Today, I am cutting beer duty for the third year in a row – taking another penny off a pint.

“And to back one of the UK’s biggest exports, the duty on Scotch whisky and other spirits will be cut by 2 per cent as well. Wine duty will be frozen.

“More pubs saved, jobs created, families supported – and a penny off a pint for the third year in a row.”