The Scotch Whisky industry is accusing Prime Minister Keir Starmer’s government of going back on its campaign promise to back Scotch makers “to the hilt.” Chancellor Rachel Reeves’ first budget address to Parliament Wednesday included a 2.7% excise tax increase on distilled spirits in line with inflation, while giving a tax break to beer and cider served on draught in the on-premise market.
“Just raising further tax does not mean you’re going to get more money into the revenue for the Exchequer for public services, and indeed, the government figures show the opposite is the case,” Scotch Whisky Association chief executive Mark Kent told WhiskyCast in an interview. “The last time that the previous Chancellor, Jeremy Hunt, raised the tax rate by 10.1%, that led to a fall in 300 million pounds for the treasury revenue…what we’ve seen as a result of this is that we’ve been put at a further competitive disadvantage to other alcohol categories such as beer and cider.”
Kent said the tax hike will damage the Scotch Whisky industry as well as the Scottish economy and undermines the Labour government’s commitment to “Brand Scotland,” given that 70% of UK spirits are produced in Scotland. The increase will take the tax bite on an average bottle of Scotch to above £12 for the first time.