SWA Autumn Budget Submission 2017

22 Sep 2017

Chancellor, drop the dram duty!

"A truly great Scottish and British industry." That's how the Prime Minister described the Scotch Whisky industry in a speech on Friday 3rd March 2017. Just five days later, during the March Budget, the Chancellor announced a 3.9% excise duty increase, taking the total tax burden on an average priced bottle of Scotch Whisky to 80%.

The second Budget of 2017 gives the UK government a second chance to introduce greater tax fairness for the Scotch Whisky industry. The Chancellor should seize the opportunity to drop the dram duty by cutting spirits excise duty.

Official HMRC figures show that the decision to increase spirits duty by 3.9% has negatively impacted the public purse. Spirits revenue has fallen in the first quarter of 2017/18 by over 7%. By cutting spirits duty at the Budget, the Chancellor has the opportunity to grow revenue and boost the public finances.

New figures, set out in this submission, show that, for example, by cutting spirits duty by 3.9% the government can increase revenue by £42m in year one, and by almost £200m by the end of this Parliament.

Cutting tax to increase revenue may seem counterintuitive, but we have been here before. After the 2% cut to spirits duty in 2015, spirits revenue - driven by the Scotch Whisky industry - increased by 4% in 2015/16.

Both by looking back and projecting forward, we can see that dropping the dram duty in the Budget will be good for the UK economy.

It will also show that as we prepare to leave the European Union, the UK government is prepared to back successful UK industries like Scotch Whisky at home so we can flourish abroad.

Chancellor, drop the dram duty on 22nd November.

The SWA's full Autumn Budget submission is available below.