Few in Westminster truly appreciate the importance of the Scotch whisky industry to Scotland’s economy when they're enjoying a dram of our national drink. But it’s past time they recognised how Scotland’s economy is held back by an alcohol duty system that punishes its biggest asset.
Scotland’s whisky industry is a vital part of our economy and our identity. It supports over 40,000 jobs and generates billions in revenue, accounting for 74% of Scotland’s food and drink exports. But Scotch isn’t just an export; it’s the backbone of our economy, especially in rural and island communities where distilleries are often the main source of employment. Distilleries have long been the beating heart of many communities, providing stable employment and sustaining local economies.
But despite this monumental contribution, we’re once again facing the risk of a Budget in Westminster penalising this great industry, when the Chancellor should instead be reversing the economic harm caused by her predecessor.
One year on, the damage caused by Jeremy Hunt’s 10.1% increase to excise duty on Scotch whisky is clear. The Treasury lost almost £300 million in the year since this tax hike came into force last August: roughly the same amount promised to Scotland back in March by the former Chancellor. With 69% of the cost of an average bottle of Scotch whisky now going to the Treasury, it is clearer than ever that raising excise duty simply doesn’t work and instead places immense pressure on our distilleries and the jobs they supply.
It’s time that Labour lives up to its word and truly backs Scotland. This means cutting the unfair tax on Scotch and reversing the harm inflicted by the Tories. Without action, duty would be assumed to increase by the rate of inflation, widening the disadvantage faced by Scotch distillers compared to other drinks producers.
The upcoming Labour Budget is an opportunity for Rachel Reeves to prove that she’s serious about backing Scotland. This is a crucial moment for Labour to demonstrate whether it will truly support one of Scotland’s most vital industries or continue the trend of squeezing it dry.
As the new Labour Government prepares its Budget, the message from Scotland is clear: protect our whisky industry and cut duty. The SNP will be watching closely to see if Labour is willing to reverse last year’s damaging tax increase, deliver on the Prime Minister’s pledge to back the industry to the hilt, and provide the support our distilleries need to thrive. The Labour Government must recognise the immense value of Scotland’s whisky industry, and we will continue to fight for a fairer deal for this great industry.
Scotland’s whisky industry is not a government golden goose to plunder. It’s time to recognise and reverse the damage caused by last year’s absurd tax increase on our greatest export and on businesses that are so important to their communities. The Prime Minister has said he wants to "turn the page" on the last government. When it comes to Scotch whisky, the Budget is the chance for him and the Chancellor to live up to that promise.
Graham Leadbitter is the SNP MP for Moray West, Nairn and Strathspey
Agenda is a column for outside contributors. Contact: agenda@theherald.co.uk
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