Chancellor George Osborne has announced a spirits duty cut of 2%, the first in nearly 20 years, and has also cut beer duty for the 3rd year running.
David Frost, Scotch Whisky Association (SWA) chief executive, said, “This is a historic decision and only the fourth time whisky duty has been cut in a century.
“The Chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch. The move is a major boost to our industry as we look to grow again in the UK, and equally sends out an important signal on fair taxation to our export markets.”
While Andrew Cowan, Managing Director, Diageo Great Britain, said:
“Thousands of people across the nation will this evening raise a happy toast to the Chancellor. The alcohol industry generates billions for the economy and flies the flag for the UK abroad. This cut will mean that a 400 year historic industry like Scotch whisky will remain a crucial, and vibrant, part of the British economy for many more years to come.”
While the beer industry also had reason to celebrate. George Osborne said, “Today I am cutting beer duty for the third year in a row – taking another penny off a pint.”
Mike Benner, managing director at the Society of Independent Brewers (SIBA) said, “This is a great day for British independent brewers, pubs and consumers.”
“We applaud the Chancellor’s decision to support British beer with this historic third cut in beer duty. It continues the momentum of the cuts in 2013 and 2014 and will boost growth, employment and investment in the independent brewing sector.”
The two duty cuts and end of the escalator have reduced the average price of a pint of beer by 16p and saved over 1,000 pubs from closure. At the same time, Government revenues from beer duty were up by1.5% in the year ending June 2014.
As a result of the 2% cut in excise on spirits, the duty burden on a 70cl bottle of Scotch at the average price of £12.90 has been reduced by 16 pence from £7.90 to £7.74. The total tax burden, including VAT, now stands at £9.89, or 77% of the average price of a bottle of Scotch, down from 78%.