UK Budget: Sir Keir Starmer accused of breaking promise to Scotch whisky industry

The Scotch Whisky Association (SWA) said the move was a “hammer blow” that will compound the damage done by last year’s 10.1 per cent hike.

It called on MPs to vote against the “tax discrimination of Scotland’s national drink”.

Delivering her long-awaited Budget, Chancellor Rachel Reeves said alcohol duty rates on non-draught products will increase in line with inflation. However, duty on draught products will be cut by 1.7 per cent, knocking “a penny off a pint in the pub”, she said.

Mark Kent, chief executive of the SWA, said: “This duty increase on Scotch Whisky is a hammer blow, runs counter to the Prime Minister’s commitment to ‘back Scotch producers to the hilt’ and increases the tax discrimination of Scotland’s national drink.

“On the back of the 10.1 per cent duty increase last year, which led to a reduction in revenue for HM Treasury, this tax hike serves no economic purpose. It will damage the Scotch whisky industry, the Scottish economy, and undermines Labour’s commitment to promote ‘Brand Scotland’.

“She has also increased the tax discrimination of spirits in the Treasury’s warped duty system, and with 70 per cent of UK spirits produced in Scotland, that will do further damage to a key Scottish sector.

“The disastrous 10.1 per cent duty hike last year has now been compounded. This further tax rise means the lessons have not been learned, and the Chancellor has chosen continuity with her predecessor, not change.

“We urge all MPs who support Scotch whisky to vote against this duty hike and tax discrimination of Scotland’s national drink.”

Douglas Ross, the former Scottish Tory leader and MSP for the Highlands and Islands, said: “This duty increase by Labour is a blow to the Scotch whisky industry and flies in the face of Keir Starmer’s promise to back the sector.”

Alcohol duty is paid by manufacturers when they make their products. In general, spirits and wines are taxed more heavily than ciders and beer due to their stronger alcohol content.

The duty is generally passed onto consumers by manufacturers, but product price increases are at their discretion.

The UK Spirits Alliance (UKSA), which represents more than 280 distilleries and micro-businesses across the UK, described the duty increase as a “kick in the teeth”.

However, Dr Peter Rice, chair of Scottish Health Action on Alcohol Problems (SHAAP), said it was “good news for health and good news for raising much-needed revenues for public services”.

He said: “In 2022, there were 10,048 alcohol-related deaths in the UK, the highest number on record, so swift action to address this was very much needed.

“Increasing alcohol duty will save lives and go some way to reducing the burden on our overstretched health services. It will also contribute vital funds to the public purse, which can then help to fund alcohol treatment services.”

Scottish Secretary Ian Murray said the Government had to “balance the books”, adding: “The inflationary increase is the right thing to do in these particular circumstances.”

Meanwhile, smokers and vapers will pay more with the announcement of a new vaping tax and an increase in tobacco duty.