Scotch Whisky Industry

Patricia Gibson Excerpts

Wednesday 9th March 2016 Westminster Hall

[Patricia Gibson (North Ayrshire and Arran) (SNP)]

Everyone here today understands that Scotch whisky is a huge player in the UK economy and overseas markets, and without the success of this industry Britain’s trade deficit of around £35 billion would be around 11% larger. This wonderfully popular product is the biggest net contributor to UK trade in goods. Exports are worth almost £4 billion and imports in the supply chain, such as packaging for products and casks for maturing the spirit, add value to our economy. The industry’s trade balance is £3.8 billion, supporting almost 40,000 jobs, 10,800 of which are worth £1.4 billion to UK workers.

As my hon. Friend the Member for Argyll and Bute (Brendan O’Hara) pointed out, more than 7,000 workers in the Scotch whisky industry are employed in rural communities such as Arran in my constituency, leading to considerable added value in both direct and indirect incomes. Further, it accounts for 21% of the food and drink exports of the whole of the UK.

I am here today to applaud the success of this industry and its huge contribution to the UK economy. I am delighted that my constituency can boast some of the finest whisky distilleries in the UK with the Arran distillery being one of the few remaining independent distilleries in Scotland and the only malt whisky distillery on Arran, home to an award-winning dram. It opened in 1995 at Lochranza, which is the perfect location for producing the perfect malt. It is home to the purest water in all Scotland, water that has been cleansed by granite and softened by peat as it slowly meanders from the mountain tops into nearby Loch na Davie. Arran also enjoys a warm microclimate. The atmosphere of sea breezes and clear mountain air with the warm flow of the gulf stream is ideal for the speedy maturation of single malts.

I have painted a rather poetic picture. As for my hon. Friends the Members for Argyll and Bute and for Ross, Skye and Lochaber (Ian Blackford), I will put their gas at a peep because the Arran distillery, despite what they have said about their own neck of the woods, is a patron of the Robert Burns World Federation and, as such, has created a Robert Burns single malt and Robert Burns blended whisky in honour of Scotland’s national poet. It is the only whisky distillery able to use the image and signature of Robert Burns on its packaging—a true accolade indeed. [Interruption.] Not for nothing does the island of Arran have a reputation for producing the highest-quality whisky, although I am sure that the whisky from the constituency of my hon. Friend the Member for Ross, Skye and Lochaber is quite nice, too.

I join my hon. Friends in urging the Government to make a cut in excise duty on spirits at the Budget next week to boost the Scotch whisky industry. The Government must make it clear that the whisky industry will not be viewed as a cash cow, as the oil industry has been for too many years. Failing to cut the excise duty in the Budget will risk holding back this vital industry and the revenues, jobs and tax receipts from which the whole of the UK benefits. We need to help to create the conditions for the growth of this industry in our home market and stimulate long-term investment. If we cut excise duty, the revenues will go up, not down. The current staggering and eye-watering 76% tax on a bottle of Scotch whisky is far too high. Consumers hand over almost £10 on each bottle of whisky that they buy. That is 51% more duty than beer drinkers and 27% more duty than wine drinkers. That is clearly unfair and unsustainable. The 76% duty is the fourth highest rate in Europe. A cut would at a stroke support not only the whisky industry, but farmers, local pubs, rural and island economies, responsible consumers, manufacturers, exporters and supply chains across the UK.

There is no denying that distilleries are a source of jobs in areas that, as has been pointed out, might otherwise find it hard to sustain them and they are strongly aligned with wider tourism activities in rural economies. In my own constituency, a visit to Isle of Arran Distillers Ltd is all part of the experience of visiting the island of Arran.

The Scotch whisky industry is, rightly, a source of pride to all Scots, and no wonder, but it is also a huge success story that needs to be told more often. The question is not whether the UK Government can afford to cut excise duty on whisky. The question is whether the UK Government can afford not to make that cut? This is an iconic industry for both Scotland and the entire UK. It has a crucial role to play in the economic health of the UK, and that must be recognised. I urge the Minister today to support a cut in excise duty on whisky and recognise this jewel in the crown of Scotland’s —and the UK’s—industrial strength.