Why a cut in duty is fair to consumers and business says SWA's David Frost

Published: 10 February, 2015

In my time as a diplomat, I spent a lot of time promoting Scotch whisky overseas. When I first got to know the industry, I found it very surprising to learn Scotch Whisky was Britain's biggest food and drink sector and indeed represented nearly a quarter of all Britain's food and drink exports.

David Frost, chief executive of the Scotch Whisky Association, lays out his personal reasons why he and his association are calling on a drop in spirits duty in the Chancellor's March Budget to back up the freeze it received last year.

He is writing as the industry Drop the Duty campaign it is running in alongside the Wine & Spirit Trade Association steps up the pressure by taking the message direct to Westminster. Today Miles Beale, the WSTA's chief executive is meeting Treasury officials to present its case and here Frost explains how the Scottish whisky industry took the argument to MPs in Westminster last week.

I have learned since then that my reaction was not unusual. When I travel overseas, those I meet know that Scotch whisky is an iconic product recognised across the globe. But in Britain many people are unaware of the scale of the modern Scotch whisky industry, the jobs it supports and the value it brings to our economy.

That is why we recently published a report, by the economic advisers 4-consulting, on the economic impact of Scotch whisky production in the UK.

This report shows just how much we contribute to Scotland's and Britain's prosperity and jobs. Scotch whisky adds almost £5 billion to the UK economy every year, supports 40,300 jobs and spends £1.8bn annually on supplies from Britain, from cereals to glass to machinery.

So, last year, at the Budget, Chancellor George Osborne was right to describe Scotch whisky as a 'huge British success story', as he froze excise duty on spirits and scrapped the escalator which pushed up duty above inflation every year.

Of course we welcomed that move. Even so, on average, almost 80% of the price of a bottle of Scotch is still taxation. Recent polling revealed that two out of every three of us don't realise that, and that, when we do, five out of every six of us think it is deeply unfair. That is why we are asking the government to cut excise duty by 2% in next month's Budget.

It was encouraging to hear Secretary of State for Scotland Alistair Carmichael MP acknowledge the contribution of the Scotch whisky industry to the economy at a reception we held at the House of Commons last week to mark the publication of our report, and to say he was hopeful the government could meet the asks of the SWA. We are pleased the Secretary of State is listening to our call for excise duty to be reduced and we very much hope the Chancellor is too.

The reception at the House of Commons was also attended by representatives of companies from the supply chain across the UK, from Lanarkshire to Essex and Yorkshire, which benefit from the success of our industry. Many sectors, from labelling to transportation, have been able to expand their own businesses as a result of working with Scotch Whisky producers. But they would do still better if the Scotch whisky market was growing in the UK and so would the thirty or so potential and actual new distillers that we are aware of.

This needs to change. The government recognised taxation on spirits was too high in the last Budget. We are calling on George Osborne to follow that logic this time round too, and to cut duty on 18 March.

* For more on the campaign visit www.droptheduty.com

Anyone who agrees with the campaign and directly lobby their MP and send them an email calling on their support.

And on Twitter at @droptheduty

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