THE Chancellor has been urged to reverse the 10% hike on whisky tax as Donald Trump’s tariffs take hold.
The SNP said the White House’s levies are set to “hammer” the Scotch whisky industry, adding that it lost more than £600m the last time tariffs were applied.
Stock markets fell sharply at the end of last week in response to the new tariffs imposed by the White House.
On Saturday, a 10% import tax on goods coming into America from around the world kicked in, with fears raised for the whisky industry and other Scottish food and drink products, such as salmon.
Many nations will face even higher levies in the coming days, including the EU, which will see tariffs imposed increase to 20% later in the week.
SNP MP Graham Leadbitter, whose constituency is home to Speyside Malts and one-third of Scotland’s whisky distilleries, wrote to Rachel Reeves urging her to reverse taxes on the whisky industry.
The Conservatives initially imposed a 10.1% hike in duty on whisky on August 1 2023.
In her Budget last October, Reeves increased the burden on whisky in line with inflation, which meant a further 3.65% increase which came into effect on February 1 this year.
According to a Scotch Whisky Association analysis of HMRC figures, revenue from spirits duty fell by £255 million between August 1, 2023 and November 30, 2024 when compared to the same period the previous year.
"As you will be aware, Donald Trump’s tariffs will hammer Scottish businesses and consumers, but no industry more so than the Scotch Whisky industry,” he wrote in the letter to Reeves.
“In 2022 alone, Scotland’s world class product generated £7.1bn for the UK economy supporting more than 40,000 jobs with one fifth of Scotch Whisky exports going to the United States.
“Scotch Whisky not only supports jobs, but it makes up a quarter of all Scottish exports to the US and when Donald Trump was last in office, his tariffs saw the Scotch Whisky industry lose more than £600m.
“These facts make it critical that Scotch Whisky is supported at this very worrying time.”
He added that before the General Election, Prime Minister Keir Starmer said he would back Scottish producers “to the hilt”.
Previously, Scottish Secretary Ian Murray had accused the Tories of breaking their “promise to the Scottish Whisky Industry” with the 10% hike.
“However, at your budget, not only did you reinforce the Tories’ whisky tax, you compounded the damage and delivered a further increase to whisky duty,” Leadbitter added.
“Research from the Scotch Whisky Association showed that after the UK government increased whisky excise duty by 10.1% in 2023, revenue received by the Treasury fell by £298 million per year. Not only do these whisky specific taxes hit jobs and the industry, they deliver less revenue to your Treasury.
“I urge you to reverse the 10% whisky tax in the face of Trump’s 10% tariffs.”
A UK Government spokesperson said: “We’re committed to supporting businesses, including Scotch whisky producers, through capping corporation tax at 25 per cent and publishing a business tax roadmap so that future investments can be planned with confidence.
“To provide specific support to the Scotch Whisky industry, the UK Government will reduce fees for geographical verification making it cheaper for producers to badge their products.”
