By Brendan O'Hara
As the MP for Argyll and Bute, which boasts the world-renowned “whisky coast” stretching from Tobermory in the north to Campbeltown in the south, I know only too well the importance of Scotch whisky, not just to the economy of my constituency but to that of Scotland and the UK.
Argyll and Bute is steeped in the history of whisky, as it has been for centuries: whisky production remains a linchpin of the local economy and one of the most important threads in the fabric of our society.
Argyll and Bute already boasts 14 world-class distilleries: eight on Islay, one on Jura, another on Mull, one in Oban and three in Campbeltown including the oldest family-owned distillery in Scotland. Between them they produce some of the finest malt whiskies in the world. Due to the growing popularity and increased demand for whisky both at home and abroad, the number of distilleries along our whisky coast is set to rise in the next couple of years, with two more planned for Islay.
In many ways, the whisky coast is a microcosm of the role Scotch whisky plays in the wider UK economy. Whisky is a vital national economic asset that supports 40,000 jobs, around 7,500 of which are in rural communities. That is why I am delighted that my application to debate the contribution of the Scotch whisky industry to the UK economy was successful and I look forward to making that case to the UK Parliament this afternoon.
Of course, it’s not just the production of the Uisce Beatha itself that stimulates local economies. The importance of Scotch in attracting tourists to Scotland cannot be overlooked. Last year around 1.5 million visits were made to whisky distilleries including 125,000 visits to Islay’s distilleries, contributing around £5 million to the local economy.
As chairman of the Scotch Whisky All-Party Parliamentary Group at Westminster, I never miss an opportunity to put the case for the industry to as wide an audience as possible and I’m indebted to the Scotch Whisky Association (SWA) for its detailed analysis of the economic impact of the whisky industry.
Scotch Whisky contributes more than £5 billion to the UK economy each year and almost 100 million cases of Scotch are exported annually. To put that in context, that’s around £4bn worth of exports at a rate of almost 40 bottles per second, earning the UK Treasury £135 per second. These are remarkable statistics.
Whisky is also the largest contributor within the goods sector to the UK’s net export performance. Without Scotch, the UK’s trade gap would be 11 per cent wider.
Scotch is therefore clearly a success story but that doesn’t mean it can be taken for granted. Support from both the UK and Scottish governments is essential to ensure it will continue to prosper. That's why the Scottish Government is working with the industry to increase trade and investment and support new distilleries.
Figures published last week by the SWA from HM Revenue and Customs revealed that, after years of decline, there are green shoots of recovery for Scotch in the domestic market. The number of 70cl bottles of Scotch released for sale last year reached almost 85 million, up two per cent on the previous year. But this small increase comes after a period of prolonged shrinkage in the UK.
It is no coincidence that this recovery coincides with a much-needed cut in Excise Duty on spirits. In last year’s Budget, the Chancellor made the historic decision to cut duty by two per cent; the first cut in spirits duty in almost two decades and only the fourth reduction in the last century.
Despite the cut, the tax on an average priced bottle of Scotch still stands at an onerous 76 per cent.
A fair tax for whisky doesn’t just benefit the industry and consumers; it also helps the Treasury’s coffers. Last year’s cut contributed to a £102m increase in revenue from spirits.
I have already made the case to the Treasury at a meeting last week and I will repeat the call this afternoon that it’s time for the Chancellor to stand up for Scotch and implement a further reduction in excise on spirits in next Wednesday’s Budget.
Brendan O’Hara is SNP MP for Argyll and Bute and chairman of the All-Party Parliamentary Group on Scotch Whisky at Westminster.
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