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Budget 2020: Drink, fuel, transport

£1m boost for the Scottish food and drink industry

whisky bottles

Whisky boost

The Scottish food and drink industry will be boosted by a £1 million support package to promote it overseas, chancellor Rishi Sunak revealed in his first Budget.

He outlined the move while announcing that there will be a freeze on fuel and alcohol duties.

It is only the second time in nearly 20 years that the government has decided not to increase the price of alcoholic drinks.

“Scotch whisky is a crucial industry – and our largest food and drink export,” he said. I’m announcing today £1 million of support for promoting Scottish food and drink overseas and £10m of new R&D funding to help distilleries go green.

“And to further support the industry, I can also announce that this year the planned increase in spirits duty will be cancelled.

“I can announce that, exceptionally, for this year, the business rates discount for pubs will not be £1,000 – it will be £5,000. And I’m also pleased to announce that the planned rise in beer duty will also be cancelled.

“And because of decisions I’ve taken elsewhere in the Budget, I am also freezing duties for cider and wine drinkers as well.”

Addressing the fuel tax freeze, he said: “I have heard representations that after nine years of being frozen, at a cost of £110bn to the taxpayer, we can no longer afford to freeze fuel duty.

“I’m certainly mindful of the fiscal cost and the environmental impacts.

“But I’m taking considerable steps in this Budget to incentivise cleaner forms of transport. And many working people still rely on their cars. So I’m pleased to announce today that, for another year, fuel duty will remain frozen.”

Responding to the news, Dayalan Nayager, managing director, Diageo Great Britain, Ireland & France, said: “Drinkers across the country will raise a toast to the chancellor tonight.

“We are delighted he announced his intention to reform the duty system to bring fairness for gin and Scotch whisky, which should ensure that these iconic home grown products no longer face punitive levels of tax.”

Chief executive of the Scotch Whisky Association, Karen Betts, said the move was a positive one by the government but added: “Our industry needs continued support, through the upcoming review of UK alcohol taxation and while our exports remain subject to US tariffs. 

“The fact remains that duty on spirits in the UK is already very high and puts Scotch Whisky at a competitive disadvantage to wine, beer and cider, with £3 in every £4 spent on an average-price bottle of Scotch Whisky going to the government in tax. 

“The review of alcohol taxation is an important opportunity to address that. The Treasury should move quickly to ensure that alcohol taxation is clearer for consumers, fairer for producers and that it supports important domestic products like Scotch Whisky.”

It wasn’t such good news for smokers, with duty rates on all tobacco products increasing by 2% while the rate on hand-rolling tobacco goes up by 6%.

Deborah Arnott, chief executive of Action on Smoking and Health (ASH), said: “Despite successive years of tax increases, the past failure to close the gap in tax on handrolled tobacco has kept smokers smoking who might otherwise quit.

“Thousands of smokers have switched to cheaper hand rolled tobacco in recent years. Reducing the affordability of tobacco is a vital measure to tackle smoking but it must be part of a comprehensive strategy to help smokers quit.”

Budget2020



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