Nairn MP Graham Leadbitter calls for UK Government to support Scotch whisky industry during Westminster debate

The MP for Nairnshire has called for essential support to the Scotch whisky industry at Westminster last week.

Graham Leadbitter, who represents the new constituency of Moray West, Nairn and Strathspey has moved a motion to call for further support from the UK Government to the industry, challenging the UK government’s recent hikes to alcohol duty.

The motion had cross-party support during the debate by MPs from across Scotland and Northern Ireland - including Inverness Lib Dem MP for Inverness MacDonald.

Mr Leadbitter, whose constituency includes the highest number of Scotch whisky distilleries in Scotland, said during the debate that the current tax regime for excise duty is “unsustainable”.

He said: “Scotch whisky and other spirits have faced a 14 per cent increase in excise duty in just 18 months.

“Over the past 18 months, the Treasury has lost £255 million - £500,000 per day in spirits revenue, a far cry from the £600 million the OBR forecast and the increase in spirits duty was supposed to have raised.”

He highlighted how higher taxes imposed by the conservative government in 2023 had already had a negative impact on retailers and producers.

“If we want to examine the impact higher taxes have had on retailers on the producers themselves, we can look no closer than right here. Last year a Freedom of Information request revealed that in the first 10 months of 2024 - a year after the conservatives hiked whisky tax - sales of whisky in this place’s gift shops plummeted, with average monthly sales of 5cl bottles down 36 per cent, and 70 CL bottles down 16 per cent by the end of October.

“That means that when Labour MPs approved the Chancellor's plans to further increase taxes on whisky products, they didn't even have to leave the building to pass a shop that was adversely affected by them.”

He concluded: “The Scotch whisky industry is a vital part of both the Scottish and UK economies and is a source of national pride.

“From my own constituency of Murray West near the Strathspey, the sector operates 48 distilleries - soon to be 49, numerous labs, whisky storage sites, offices with engineers, technicians, and architects, and is supported by a vibrant and extensive supply chain and busy logistics sector.

“Over 5,000 of my constituent’s jobs are right to Scotch whisky industry. That's one in every nine jobs as the most concentrated group of distilleries in the world.

“By addressing the issues I've outlined today, trade, excise duty, extended producer responsibility, sustainability, and duty-free sales, the UK government can provide the support needed to ensure that the scotch whisky industry continues to flourish for generations to come.

“We need all parties to champion our great exports like scotch whisky ensuring it has the support it needs at home to deliver growth an investment to see it flourish and deliver on its sustainability objectives.”

He also praised the efforts and investment of the industry as a whole in new practices and technologies to reduce its carbon footprint and become more energy-efficient.

Mr MacDonald added: “The share price of Diageo was down by two-thirds. Perdon Ricard’s has halved. The whisky industry is really in a very difficult place at the moment.

“The duty put on in the last budget was 32p for a normal bottle, taking the duty up to £9.18 of total duty on a bottle of spirits.

“Does the minister not think that we are plucking the golden goose just once too often?”

Minister for Food Security And Rural Affairs Daniel Zeichner, replied: “I hear those concerns. We are addressing a whole range of financial issues across the economy, and we think this is a fair and balanced approach.

“To continue outlining some of the measures that we have taken to support the industry, we have announced measures to reduce business costs and encourage growth.

“We will be doing away with the alcohol duty stamp scheme from 1 May.

“About 3,500 spirits producers, bottlers and labellers will no longer need to comply with the duty stamp requirements, saving an estimated £6.5 million annually.

“We will also simplify the administration of alcohol duty, reducing burdens and supporting growth.

“From March 2025, HMRC’s arrangements for duty returns and payments will be reformed, supported by a new online service. Additionally, reform of the production approvals required by spirits producers means that many will no longer be required to operate separate excise warehousing facilities for the storage, bottling and labelling of their own products.”

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