Only Tories could raise taxes and lose money – Carmichael hits “hapless” spirits duty hike

Orkney and Shetland MP, Alistair Carmichael has today condemned the government after analysis showed that the government had lost nearly £100 million in tax revenue from spirits duty following a hike in the tax rate. 

Analysis of new HMRC tax receipts data by the Scotch Whisky Association has found that duty revenue from spirits fell to £1.87 billion between August to the end of December – a year on year drop of five percent costing the Treasury £98 million in revenue. 

Chancellor Jeremy Hunt hiked excise duty on Scotch Whisky and other spirits by 10.1 percent from 1 August – the biggest rise in 40 years. The Office for National Statistics has found that this led to the largest increase in UK inflation because of alcohol on record.  

The August increase left the UK with the highest level of duty on spirits in the G7, and fourth highest in Europe. Distillers have urged the Chancellor to cut alcohol duty in his March budget to support businesses, including pubs. A third of all alcohol sales in hospitality businesses come from Scotch Whisky and other spirits. 

Mr Carmichael said: 

“It is typical for this Tory government that they could raise taxes and lose money in the process. The Treasury attitude always seems to be that they know better than everyone else. This is not the first time that their forecasts have been wrong - most notably when the coalition government cut the level of duty on spirits.  The Treasury forecast a decline in revenue - instead we produced a significant increase in tax take. 

“Their stubborn attitude is a real threat to an industry that is of critical importance to some of the most economically fragile communities in the country. Distillers are a pillar for our economy in the isles, with whisky producers and gin distillers making a mark in both Orkney and Shetland. If this is the Tories' idea of levelling up our communities then I would hate to see what levelling down would look like.”