Chancellor Rishi Sunak urged to ‘back Scotch whisky’ in Budget

Chancellor Rishi Sunak has been urged to give the whisky industry a boost and slash spirits duty in his Budget next week.

The sector has been battered by US export tariffs and the pandemic over the last year, putting the future of many distilleries at risk.

Industry insiders have said a 5% cut in taxes would give some vital breathing room and would also aid the Chancellor in his mission to rally the economy.

According to an analysis of alcohol taxation, conducted by the Centre for Economic and Business Research (Cebr), a 5% tax cut would generate an additional £748 million in duty and VAT over a three-year period for the Treasury.

Cider with Rishi

Scottish Tory leader Douglas Ross next week’s Budget was “an opportunity to redress the many historic injustices in the alcohol duty system”.

The Moray MP said: “Just under £3 in every £4 spent on the average bottle of whisky is taken in tax, that is one of the highest tax rates on alcohol in the world and it’s higher than the tax paid by wine, beer and cider.”

He added: “I urge the UK Government to do all it can to deliver clear support for the sector, both in the short through next week’s Budget and in the longer term to build a solid foundation through a duty review.”

Mr Ross, speaking in a House of Commons debate, ended with a message to the Treasury: “It’s time that we backed Scotch whisky.”

Sixth time lucky?

If the Chancellor were to reduce sprits duty, it would only be the fifth time the Treasury has cut alcohol taxes in the past 100 years.

Treasury minister John Glenn, responding to the debate, said it would be “inappropriate” to comment in detail, given the Budget is just days away, but added: “I would like to assure him that the chancellor is taking a very close interest in this issue and the detailed analysis and work that’s been undertaken.

“We are keen to make the most swift progress possible.”