Carmichael: Scottish Secretary should defy spirits tax hike and dare PM to sack him

The Secretary of State for Scotland failed to secure a freeze in spirits duty (including Scotch whisky) in the recent Budget, but Mr Carmichael’s amendment to the Finance Bill, due to be debated today [Wednesday], would reverse the rise in order to support distillers of whisky, gin and other spirits. Mr Carmichael’s amendment is backed by the Scotch Whisky Association. In an online poll of 1,034 adults aged 18 and over in Scotland, conducted on behalf of the SWA, 72% of Scots were found to support a freeze on Scotch whisky tax in the budget.

Data from the UK Spirits Alliance suggests that distillery numbers in the UK have grown from 190 to 820 in the last seven years, while the spirits industry supports over 446,000 jobs and contributes £13 billion to the UK economy. UK spirits duty is currently 77% higher than the EU average and is higher in the UK than any other alcohol category. Real-world excise duty receipts data show that the Government has been able to raise more in tax when it has frozen or reduced spirits duty than when it has increased it. HMRC receipts were up by 8.3% in 2021/21, building on a 1.6% increase in 2019/20, and spirits duty was frozen in both years.

Speaking ahead of the debate, Mr Carmichael said:

“The Scotch whisky industry is the jewel in the crown of Scotland’s food and drink industry. Douglas Ross and Alister Jack both know how damaging the increase in duty will be and have said so. My amendment would cancel the increase and freeze the rate of duty on whisky and other spirits.  Will Douglas Ross and Alister Jack vote for what they know to be right or will they instead put their party interests first?

“The Tories have a bare cupboard in their choices for Scottish Secretary and Alister Jack knows this. He should back us against this tax hike and dare the Prime Minister to sack him. Whisky producing communities across Scotland will be watching.

“Ross and Jack are never slow to talk up industry concerns when it is the SNP causing a mess over the Deposit Return Scheme or advertising bans – it is rank hypocrisy to stay silent while the Chancellor squeezes distillers for their last penny. Either they are too weak to stand up for our flagship industry or they simply do not care.

“The last thing our distillers need now is another tax rise on top of inflation and cost-of-living challenges – and a total lack of support from the government.

“When I was in government we delivered not just a freeze but a cut in spirits duty. We fought hard for it against the naysayers and in the end it was a massive boost for the industry and increased the money coming in to Treasury. That is what you can achieve when you have the political will – clearly Douglas Ross and Alister Jack just do not have it.”