Budget: Scotch Whisky industry welcomes duty freeze, but says more support needed

The Scotch Whisky Association (SWA) has welcomed the UK Government’s decision to freeze excise duty on spirits in today’s Budget. But it says a cut would have provided a bigger boost for consumers, a vital home-grown industry and public finances.

Delivering his latest Budget, chancellor George Osborne said he wanted to support “responsible drinkers and our nation’s pubs”, and action taken in the last parliament to cut beer duty had saved “thousands of jobs”.

Announcing a continued freeze on beer and cider duty, he added: “Scotch whisky accounts for a fifth of all of the UK’s food and drink exports. So we back Scotland and back that vital industry too, with a freeze on whisky and other spirits duty this year.”

As a result of the freeze, tax - VAT and excise duty - remains at 76 per cent, a level that three quarters of the British public believe is too high. The excise duty on a 70cl bottle of Scotch at the average price of £13 is £7.59 and the total tax burden is £9.91.

Last year’s 2 per cent cut in excise helped boost revenue from spirits for the Treasury by £102 million and the Scotch Whisky Association had argued that George Osborne should do the same this year to help the public finances, a home-grown industry and consumers.

Despite the Government opting for a freeze rather than a cut the SWA says that Scotch Whisky will remain one of the UK’s most vital industries, supporting more than 40,000 jobs across the UK. It will also continue to be one of the UK’s biggest exports. Without the success of Scotch, the UK’s trade deficit would be 11 per cent larger.

David Frost, Scotch Whisky Association chief executive, said: “We welcome the freeze in excise duty on spirits. We hope that this will sustain continued growth in the UK market for Scotch Whisky and thus help improve the public finances. But tax is still 76% of the price of an average bottle of Scotch and the majority of the British public think that is unfairly high. We will continue to call for fairer taxation of Scotch, a vital UK industry, and we urge duty reductions in future years.”