THE First Minister will call for the Scotch whisky industry to be treated fairly when he meets Prime Minister Rishi Sunak in London.
Humza Yousaf has said he will raise the issue of disproportionate tax increases and the absence of energy cost support when he meets Sunak on Monday evening.
In a move made without consultation, last month’s UK Budget saw Scotch whisky hit with a 10.1% tax increase.
This increase is compounded by the exclusion of distillers, alone in the drinks industry, from the energy bill relief offered by the UK Government.
Whisky production is inevitably an energy-intensive process and the Scotch Whisky Association reports that two thirds of distillers have said their costs will go up, leading to less investment.
Following the Budget, Scottish Secretary Alister Jack said he “regreted” his lobbying attempts against the alcohol duty increase failed in the face of criticism from the whisky industry.
Commenting ahead of his meeting with the Prime Minister, Yousaf said: “Whisky has to pay its fair share of tax. Everyone, including distillers, agrees on that.
“The decision, however, to increase tax by more than 10%, at the same time as refusing to provide the energy-bill support the rest of the drinks industry receives, puts the industry – and Scotland – at a competitive disadvantage.
“That means less investment and puts jobs at risk here in Scotland. That is simply unacceptable.
“What’s more, this is a direct breach of the explicit pledge the Prime Minister was elected on as an MP in 2019. The Conservative manifesto was clear that they would review duty to help support the Scotch whisky industry.
“Instead, yet again, they are denying a key Scottish industry the support it needs – support the drinks industry in the rest of the UK receives – while hammering them with a tax increase at the same time. That’s blatantly unfair to whisky and blatantly unfair to Scotland.
“Inflation is now predicted to come down sharply. It’s time for the Prime Minister to bring fairness back to the way whisky is treated and I will make that crystal clear when we meet today.”
The 2019 Conservative manifesto committed a Tory government to review the tax on whisky saying: “Alcohol Duty Review: Scotch whisky is a national export that supports 42,000 jobs across the UK. Yet the tax on each bottle of Scotch sold in this country represents almost three quarters of its price.
"That is why over the past two years we have frozen the duty on spirits, cutting the price of a bottle of Scotch by 30p. Now, we want to do more, which is why we will review alcohol duty to ensure that our tax system is supporting British drink producers.”
Chancellor Jeremy Hunt defended plans to increase duty on Scotch whisky, despite the industry saying the rise announced in the Budget breaks a previous commitment made by the UK Government.
