🥃 Support for the Scotch Whisky Industry

• The Scotch whisky industry is a significant contributor to the UK and Scottish economies, with £7.1 billion in gross value added and supporting over 66,000 jobs across the UK.
• Exports are crucial, with 43 bottles of Scotch whisky exported every second, totaling over £5 billion annually.
• The industry attracted 2 million visitors in 2022, making it Scotland’s top tourist attraction, and has invested £2.1 billion in capital projects since 2018.
• Concerns were raised about the high excise duty on Scotch whisky, which has increased by 14% in the last 18 months, resulting in a revenue loss for the Treasury. There was a call for the government to reconsider this tax to support the industry’s global competitiveness.
• The importance of securing beneficial free trade agreements was highlighted, particularly with countries like India, which could boost exports and job creation.
• The industry’s commitment to sustainability was discussed, with goals to decarbonize operations by 2040 and reach net zero by 2045. The Scottish and UK governments’ funds to support these goals were mentioned.
• The role of duty-free sales in global travel retail, contributing to £6.2 billion in exports and supporting 42,000 jobs, was emphasized.
• The UK government’s actions to support the industry include securing geographical indication status in markets like Brazil and investing in the spirit drinks verification scheme to reduce costs for producers.
• The removal of the alcohol duty stamp scheme and reforms to simplify alcohol duty administration were mentioned as efforts to reduce business costs and encourage growth.
• The need to address grid connection delays for distilleries was acknowledged, with government efforts to accelerate network connections and expand capacity.

The session displayed a moderate level of disagreement, primarily centered around the impact and fairness of government policies on the Scotch whisky industry. Key areas of contention included excise duty and trade policies, but these were not overtly contentious. While there were moments of critique and questioning, the overall tone remained constructive rather than confrontational. Below are detailed examples and explanations of the observed disagreements:

1. Excise Duty and Tax Increases: There was disagreement regarding the impact of excise duty increases on the Scotch whisky industry. Graham Leadbitter highlighted the detrimental effect of a 14% increase in excise duty over 18 months, leading to a loss of revenue for the Treasury. He cited a significant drop in sales within the Parliament’s gift shops as a direct consequence of the tax hikes. Seamus Logan criticized the Prime Minister’s commitment to supporting Scotch whisky producers while simultaneously enforcing the highest excise duty in the G7. Wendy Chamberlain challenged the government’s decision not to change the spirits duty instituted by the previous government, which she argued resulted in revenue loss for the Treasury. These points of contention suggested dissatisfaction with current tax policies but were not presented in a highly confrontational manner.

2. Trade and Market Access: There were differing views on the government’s efforts to support the industry through trade agreements. Graham Leadbitter emphasized the importance of beneficial free trade agreements, particularly citing the potential benefits of a deal with India. Mr Alistair Carmichael suggested the government should develop a strategy to mitigate risks related to US trade policy and tariffs. Both Douglas McAllister and Gregor Poynton praised the government’s efforts in securing protected status for Scotch whisky in Brazil and removing trade barriers, indicating agreement with these actions but differing from others in their overall assessment of the government’s trade strategy.

3. Sustainability and Extended Producer Responsibility (EPR): Graham Leadbitter discussed the need for a genuinely circular economy approach to EPR, suggesting the current mechanism functioned more as a packaging tax. This pointed to a mild disagreement on how EPR should be implemented to better support the industry’s sustainability goals.

4. Role of the Scottish Government: Lillian Jones from the Labour Party criticized the SNP-led Scottish Government for not adequately supporting the Scotch whisky industry and the broader Scottish economy. Graham Leadbitter responded by focusing on the Westminster government’s responsibilities, implying a difference in perspective on where the responsibility lies for supporting the industry.

While disagreements were evident, they were more focused on policy critique rather than personal or party disputes. The contributions were largely supportive of the Scotch whisky industry, with members seeking improvements in government policy rather than outright opposition. This supports the rating of 2, indicating moderate disagreement.