Whisky trade body calls on chancellor for another 2 per cent cut in duty

WhiskyThe Scotch Whisky Association (SWA) has pressed for a further 2 per cent cut in excise duty in next month’s Budget as the trade body pointed out that whisky exports are worth almost £4 billion a year.

SWA said the UK’s trade deficit of almost £35 billion would be 11 per cent larger without whisky, which is now the biggest net contributor to the UK’s balance of trade in goods.

A new SWA report said last year’s 2 per cent cut in duty contributed to a £96 million rise in revenue from spirit drinks for the Treasury.

It argued the move helped “to support the conditions for investment”.

But SWA also said that despite the improvement, tax on an average-priced bottle of whisky still stood at an “onerous” 76 per cent.

In its latest economic impact report, SWA estimated exports were worth almost £4 billion in 2014, while imports such as packaging and casks amounted to £200 million.

SWA said that gave the industry a trade balance of +£3.8 billion.

That put it ahead of mechanical machinery (+£3.4 billion), beverages (+£1.4 billion) and works of art (+£1.2 billion).

SWA claimed the UK’s trade deficit of £34.8 billion that year would have been 11 per cent larger without Scotch’s contribution.

Its report also estimated the industry directly added value of nearly £3.3 billion to the UK economy - up 1.6 per cent on figures it produced a year earlier.

Indirect and “induced” impacts added a further £1.7 billion in value, it added.

The report also estimated the industry directly employed 10,800 people in Scotland, paying out £528 million in salaries.

David Frost
David Frost

SWA chief executive David Frost said the figures re-emphasised how significant the Scotch whisky industry was to the Scottish and wider UK economy.

“Given the scale and impact of the Scotch whisky industry, we believe the government should re-double its efforts to support distillers.

“At home, in the short term, a further 2 per cent duty cut in next month’s Budget would be a major boost, supporting small businesses that rely on the home market and further investment in the sector.”

A UK Treasury spokesman said: “Scotch whisky is a huge British success story, that’s why we ended the spirits duty escalator and cut the duty on whisky and other spirits by 2 per cent at last year’s Budget.

“That means a bottle of Scotch whisky is now 70p cheaper than the duty plans we inherited in 2010.

“The government has also introduced the spirits verification scheme. This will help protect the integrity and high reputation of Scotch whisky by helping consumers in the UK and abroad to identify genuine products and avoid fakes.”

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