Jeremy Hunt has been accused of taking a hammer blow to the Scotch whisky industry after he slapped a 10 per cent tax hike on distillers.
The Tory Chancellor left drinks producers furious today after he announced a huge increase in alcohol duty as part of his 2023 Budget statement.
The whisky industry accused Hunt of breaking a previous UK Government’s pledge to "review alcohol duty to ensure our tax system is supporting Scottish whisky".
The Chancellor increased duty across all four alcohol categories - with relief provided only for on-draught products, which make up less than half of those sold behind the bar.
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The duty rate on spirits will rise to £31.64 per litre of pure alcohol, meaning that of the £15.22 average price of a bottle of Scotch Whisky, £11.40 is collected in taxation through duty and VAT.
The tax burden on the averaged priced bottle of Scotch Whisky has risen from 70% to 75%.
Mark Kent, of the Scotch Whisky Association, said: "This is an historic blow to the Scotch whisky industry.
"The largest tax increase for decades means that 75 per cent of the average priced bottle of Scotch Whisky will be collected in tax, reducing already tight margins for an industry which employs tens of thousands of people and invests hundreds of millions annually across the UK.
"We have been clear with the UK Government that increasing duty would be the wrong decision at the wrong time, so it is deeply disappointing that one of Scotland’s largest and longest-standing industries has been treated in this way.
"In addition, the Chancellor has chosen to further increase the competitive disadvantage faced by the industry in the UK by giving additional tax breaks which are not available to the vast majority of distillers."
Louise Gilmour, GMB Scotland Secretary, said: “It’s yet another unhelpful political measure for Scotland’s whisky and spirits sector, following hard on the back of Holyrood proposals for an alcohol advertising ban.
“GMB’s concern is that workers mired in the cost-of-living crisis will see their pay, conditions, and ultimately investment in their workplaces, curtailed by employers seeking to clawback costs as a consequence of short-term political policy.
"Let’s also be clear, workers are facing tough international competition and they are still dealing with the damaging legacy of Trump’s whisky tariffs while Truss and Johnson were sleeping at the wheel - this latest tax increase risks leaving them even further behind.
“Whisky and spirits production is the jewel in the crown of Scotland’s world-class food and drinks sector, but the political bubble looks out of touch about its importance not just to the country, but to the workers, communities, and supply-chains that depend on its future growth.”
Christine Jardine, a Scottish Lib Dem MP, said: "It seems the industry cannot catch a break.
"Energy bills have spiked, the SNP’s alcohol consultation threatened to close down their gift shops and now the Chancellor is whacking up tax. Distillers are being hung out to dry.
"I know that the Conservatives are desperate for ways to fill the economic black hole that their policies have created but additional taxes on Scotland’s national drink will not help our economy to grow."
