Support for the Scotch Whisky Industry
Debate between Graham Leadbitter and Wendy Chamberlain(1 week, 4 days ago)
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Graham Leadbitter
Absolutely. As I have mentioned, 43 bottles of whisky are exported every second—that will be 75,000 bottles of whisky by the time we have finished this debate. That is a phenomenal export contribution not just to Scotland’s economy, but to the wider UK economy at the moment. I welcome the efforts made by the UK Government in the area of trade; the question is whether more can be done, and whether those efforts can be made more quickly.
Wendy Chamberlain (North East Fife) (LD)
It is right to give credit to the UK Government for some of the work happening on exports. However, does the hon. Member agree that the changes that the previous Government made to spirits duty, which this Government have refused to change, mean that the Treasury is losing out on money by not treating alcohol as alcohol across the different categories?
Graham Leadbitter
Absolutely. That is another point that I will expand on in a bit more detail shortly.
We must continue to strengthen our trade relationships. While this debate is rightly focused on UK actions, it will not have bypassed hon. Members that there has been significant media comment on tariff actions taken by the US Administration in recent weeks, and on what potential future actions may be taken. Combined with global headwinds affecting the wider luxury brands market, it has unsurprisingly generated comment and speculation, both from within the sector and elsewhere. Maintaining a watchful eye and accentuating the positives of the existing trade relationships remain vital.
On excise duty, the current tax regime is unsustainable. Scotch whisky and other spirits have faced a 14% increase in excise duty in just 18 months. Over the past 18 months the Treasury has lost £255 million, or £500,000 per day, in spirits revenue—a far cry from the £600 million that the Office for Budget Responsibility forecast that the increase in spirits duty would raise. That Treasury loss from lower sales was projected by the industry to increase as the Chancellor’s recent decisions start to bite.
If we want to examine the impact higher taxes have had on the retailers and the producers themselves, we need look no closer than right here. Last year a freedom of information request revealed that in the first 10 months of 2024, a year after the Conservatives hiked whisky tax, sales of whisky in Parliament’s gift shops plummeted, with average monthly sales of 5 cl bottles down 36% and 70 cl bottles down 16% by the end of October. That means that, when Labour MPs approved the Chancellor’s plans to further increase taxes on whisky products, they did not even need to leave the building to pass a shop adversely affected by the tax.