Scotland business

Whisky body presses case for further 2% duty cut in Budget

Whisky bottling line

The Scotch Whisky Association (SWA) has pressed for a further 2% cut in excise duty in next month's Budget by outlining the industry's value to the UK economy.

A report by the trade body said Scotch was now the biggest net contributor to the UK's balance of trade in goods.

SWA said last year's 2% cut in duty contributed to a £96m 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%.

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

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

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

SWA claimed the UK's trade deficit of £34.8bn that year would have been 11% larger without Scotch's contribution.

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

Indirect and "induced" impacts added a further £1.7bn in value, it added.

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

Image copyright SWA

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% 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% 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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