Scottish Secretary Alister Jack slams Budget duty hike on Scotch whisky revealing he told Chancellor not to go ahead with the plan – but was ignored
The Budget hike on Scotch whisky has been slammed by one of Jeremy Hunt’s own Cabinet colleagues.
Scottish Secretary Alister Jack admitted he ‘regretted’ the increase in duty and argued against it – but was ignored.
The resistance emerged as the Chancellor faces a wave of criticism over changes to the tax system due to come into force in the summer, which will hit the cost of a bottle of wine and spirits.
At the same time alcohol duties across the board will rise in line with RPI inflation – 10.1 per cent – in what has been criticised as a ‘double-pronged tax raid’ on drinkers.
The Scotch Whisky Association said the increase will mean taxes account for 75 per cent of the cost of an average-priced bottle of Scotch – meaning for a £15.22 bottle a total of £11.40 will go to the taxman through duty and VAT.
Scottish Secretary Alister Jack admitted he ‘regretted’ the increase in duty and argued against it – but was ignored
The Scotch Whisky Association said the increase will mean taxes account for 75 per cent of the cost of an average-priced bottle of Scotch – meaning for a £15.22 bottle a total of £11.40 will go to the taxman through duty and VAT
A move to tax drinks according to their alcohol content – the stronger the beverage the higher the levy – means millions of drinkers face seeing the price of red and whites rise by 20 per cent – or 44p per bottle- according to the Wine and Spirits Trade Association.
According to the BBC, Mr Jack said after the announcement yesterday: ‘Did I lobby against it, yes I did, did I lobby against it the last few years successfully yes, but this time the lobbying hasn’t been successful.’
Asked if he wanted to apologise for failing to block the move, Mr Jack said it was a ‘matter of regret that whisky duty, spirits duty is going up, it’s not what I wanted for the Scottish industry’.
He stressed the whisky industry was ‘buoyant’ and the government is working hard to boost exports.
Mark Kent, chief executive of the SWA, is demanding an urgent meeting with the Chancellor to discuss the impact of the changes.
He called for the duty rise to be reversed, telling Mr Hunt: ‘With the right support, with a reversal of the tax rise, we are confident the industry can continue to deliver for the UK economy.’
However Mr Hunt insisted the Government is keeping duty levels low.
Speaking on BBC Radio Scotland’s Good Morning Scotland programme, the Chancellor said: ‘We have been working very closely with the Scotch Whisky Association and we have frozen alcohol duty until August.’
The UK will then introduce ‘big reforms’ to the alcohol duty system, which will mean duty is linked to the strength of the drink.
Mr Hunt said this approach would be ‘beneficial to whisky distillers’, and added: ‘In real terms this means we will have the lowest level of duty for over 100 years, so we are keeping duty levels low.
‘We will continue to engage with the industry and we want to do something that will mean they are successful and prosperous going forward.’
The move to tax drinks according to their alcohol content – the stronger the beverage the higher the levy – means millions of drinkers face seeing the price of red and whites rise by 20 per cent – or 44p per bottle – according to the Wine and Spirits Trade Association.
It would represent the largest rises in half a century in the tax on a bottle of red or white.
However, there is some good news for drinkers – other ‘over taxed’ drinks like sparkling wines and Baileys will see their tax rate go down under the reform.
Mr Hunt sweetened the bitter pill yesterday by unveiling a surprise Brexit Pubs Guarantee that will keep the levy on beer and cider 11p lower that shop-bought booze amid sweeping changes to the way all alcohol is taxed.
Mr Sunak used his 2021 Budget to set out the new system where tax is payable based on the strength of the beverage.
His move to increase draught rate relief from 5 per cent to 9.5 per cent was welcomed by hospitality leaders at a time when the sector is struggling to recover from Covid and wider economic problems.
Mr Hunt told MPs the change to beer tax will apply to ‘every pub in Northern Ireland’ due to the Windsor Framework unveiled by Mr Sunak a fortnight ago but yet to be passed by MPs. He added: ‘British ale may be warm, but the duty on a pint is frozen.’
But British Beer and Pub Association chief executive Emma McClarkin said: ‘The cut to draught duty as part of the alcohol duty reform is positive and we hope that it will result in a boost for our pubs this summer.
‘However, the fact is our industry will be facing an overall tax hike, not a reduction, come August.’
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