Scottish business leaders across sectors have called for a cut in alcohol tax amid claims current levels are having a "damaging impact" on whisky sales.
Leading business and sector organisations are calling on the Chancellor to "back Scotch whisky" and cut alcohol duty.
Rachel Reeves has been urged to lower the duty placed on spirits after the previous government raised it by 10.1% last year.
In a letter sent to the Treasury, the Chancellor was told that last summer's tax increase had a "damaging impact" on Scotland's national drink.
It was signed by business leaders from organisations including the Scottish Chambers of Commerce, the Scottish Tourism Alliance, Scotland Food and Drink, UK Hospitality Scotland and the Institute of Directors and Prosper.
The group said a reduction on alcohol duty for Scottish whisky would "signal that Scotland is a competitive place to invest, would recognise the benefits of the sustainable employment for which the Scotch Whisky industry is renowned and would boost a central part of Labour's 'Brand Scotland' vision".
Ms Reeves - who has said economic growth is her biggest priority - has warned she faces the task of filling in a £22 billion financial shortfall left over by the previous government.
Prime Minister Sir Keir Starmer has pledged not to increase income tax, national insurance or VAT, leaving her with fewer options to raise cash.
However, the Scotch Whisky Association (SWA) said last year's duty increase saw less money being raised by the Treasury.
The SWA said in the 12 months after the duty was raised in August 2023 revenue plummeted by £300m.
READ MORE:
- Distillery launches whisky with historic French drinks maker
- Distillery launches new 'super heavily peated whisky'
- Organic Scottish distillery launches new whisky
Business leaders urged Sir Keir to keep his general election campaign pledge of "backing Scotch producers to the hilt".
Liz Cameron, director and chief executive of the Scottish Chambers of Commerce, said: "Scotch Whisky is one of Scotland's most iconic industries, but the 10.1% tax rise last year clearly damaged confidence, which in turn impacts investment and the ability to drive growth.
"HM Treasury data also shows that the tax rise reduced revenue to support public services. Whichever way you look at it, the double-digit rise cost the Treasury £300m.
"The new Chancellor has a chance to change direction by supporting this home-grown global success story by reducing the tax burden on Scotch Whisky, supporting communities and supply chain companies across Scotland."
Marc Crothall, chief executive of the Scottish Tourism Alliance, said: "Scotch Whisky is vital to Scotland's tourism offer.
"Recent data shows that 40% of all international tourists will visit a Scotch whisky distillery during their stay, and many of members tell us that those who visit their distilleries elect not to buy a bottle due to the high level of duty.
"UK tax on Scotch Whisky is the highest in the G7 and higher than the majority of European countries.
"The tax burden on industry and consumers is too high, and the Budget on 30 October should signal the intention to reduce the rates over the course of this Parliament.
"This will support the Government's 'Brand Scotland' vision, backing the rhetoric with action."
Mark Kent, SWA chief executive, said: "The industry is grateful to Scotland's leading business and sectoral organisation for the support.
"Speaking with one voice, they have delivered a clear message to the Chancellor - back Scotch Whisky and, in doing so, back Scotland by reducing the tax burden on 30 October."
Dr Peter Rice, Scottish Health Action on Alcohol Problems (SHAAP) chair, responded to the letter.
He said: “Alcohol duties need to rise each year to maintain their real terms value and this is what happened in August 2023.
“Investment is urgently needed in public services, including our hospitals and support services. Alcohol duties are a fair way to raise much needed funds while also limiting the harm from alcohol and we hope that the Chancellor will give priority to the needs of public services and the public's health in the Budget.”
The UK Government has been approached for comment.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel