It is amazing how sometimes politicians can say one thing and mean something completely different.
Take this, from the Chancellor’s Budget statement to the House of Commons yesterday: “Let me start with alcohol duty. The Government will shortly by publishing its alcohol strategy to address the growing problem of alcohol abuse and the many billions of pounds it costs our NHS and criminal justice system. But today I have no further changes to make to the duty rates set out by my predecessor.”
I wasn’t the only one to be fooled. Some of our leading broadcasters also took the Chancellor at his word and reported no extra rise on whisky in the Budget.
But that wasn’t quite what Mr Osborne had in mind. By sticking to the plans announced by previous chancellors, Mr Osborne was merely continuing with the tax escalator which drives whisky duty up each year.
He could have reduced it, as the whisky industry asked, but instead he kept on with the rise – but hid it away in the small print that accompanied the Budget, merely glossing over it in his speech and blaming others for it.
The 5 per cent rise will put 41p on a bottle of Scotch and, according to the Scotch whisky industry, will leave the UK with the highest rates of whisky duty in the EU outside Finland and Sweden, where whisky duties are punitive.
Gavin Hewitt, chief executive of the Scotch Whisky Association, said: “The reduction in corporation tax is a welcome boost to business, but by maintaining the duty escalator the Chancellor has undermined the government’s objectives of encouraging economic growth and curbing inflation.
“The government needs to review the duty escalator which is harming the Scotch whisky sector. The industry is vital to economic growth and supports about 35,000 jobs across the UK. It suffers at home due to the discriminatory tax regime applied by our own government.”
He added: “The SWA is calling for an overhaul of the entire duty regime through a move towards a system where all drinks were taxed at about the same rate. Scotch Whisky currently carries some 37 per cent more duty per unit than beer and is 30 per cent higher than wine. Duty approximation would deliver an additional £1 billion a year to the Government to help reduce the national deficit.”
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