Duty on whisky will increase by 10.1% from August. Industry veteran Billy Walker says it marks the death of a UK Government commitment to support Scotland’s national drink.
“All politics is local” the saying goes, and this is particularly true of the north and its whisky industry.
When a commitment is made it is kept. That is the way it has been for centuries, generation after generation.
Government pledge
So, when the UK government visited a Speyside distillery in 2019 and declared it would “ensure our tax system is supporting Scottish whisky”, distillers including myself took ministers at their word.
But that commitment died with last week’s Spring Budget.
I’ve worked in the whisky industry for more than 50 years. You would be hard-pressed to find something I haven’t experienced over those five decades – first as a master blender, then working to breathe new life back into old distilleries and now master distiller at The Glenallachie.
You have to go back to 1981 to find a larger tax increase than the one imposed on the industry last week.
10.1% increase
The 10.1% increase for whisky increases the tax burden on the average priced bottle of Scotch in the UK market to 75%.
Three-quarters of the price you pay is collected in duty and VAT by the Treasury.
Obviously, that leaves precious little for businesses like mine to support our workforce through good, well-paid jobs, invest in the local community and our supply chain, pay our energy bills – which is harder than it used to be – and get our product to market.
You have to go back to 1981 to find a larger tax increase than the one imposed on the industry last week.”
The more tax that is levied on the sector the less able we are to support growth across the economy.
Whisky should, of course, be taxed. We have just about got used to it now, nearly 400 years after the first taxes on the industry were introduced.
But what we want is fair tax, and that is what was promised. Last week’s Spring Budget has made the situation worse for the industry.
A pint of beer or cider in a pub will get a tax break, so why not a dram of whisky?
Under the chancellor’s current plan, walk into a pub from August and order a pint of beer the duty, and the tax will be 32% lower than on the dram I’m enjoying next to you.
For a pint of cider, if that’s your thing, the duty applied is 68% less.
In both these cases, the alcohol content of the whisky is lower but the tax is much higher. This is not a system which supports Scotch whisky.
I’ll be there to remind the UK Government of the pledge it made.”
But the industry still expects support. A commitment was made and it should be honoured.
The Scotch Whisky Association, which has long campaigned for fairer taxes for our national drink, has asked the chancellor for an urgent meeting to discuss how the commitment will be kept.
If and when that meeting takes place, I’ll be there to remind the UK Government of the pledge it made.
All politics is local and our memories are long.
Billy Walker is managing director and master blender at The GlenAllachie Distillery, on Speyside.
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