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MPs call on Treasury to scrap duty escalator on scotch whisky

The Treasury should scrap a duty escalator on scotch whisky, MPs said today, claiming "if it's good enough for beer, it's good enough for whisky".

A Westminster Hall debate heard pleas from MPs to protect scotch whisky as a vital industry in Scotland, which would match a move made by Chancellor George Osborne on beer in last year's budget.

Treasury Minister Nicky Morgan pledged to listen to representations on the issue but warned she could not make any promises ahead of the Budget this year.

During the debate, Liberal Democrat Sir Malcolm Bruce (Gordon) called for the duty escalator to be scrapped.

He said: "The Government are arguing the increase in duty on whisky has gone up by 37%, compared with beer at 42%. The trouble with that of course is having abolished the beer escalator, that division is going to be eliminated very quickly.

"The point we have to maintain in export terms is this is a home-based industry - if it's good enough for beer, it's good enough for whisky. The escalator should go and we should make sure our most successful industry is supported competitively at home and abroad."

Labour MP Brian Donohoe (Central Ayrshire), who brought forward the debate, said: "Can the Treasury provide reassurance for the scotch whisky industry that the annual attack on Scotch whisky will come to an end in the Budget in 2014?

"Does the Treasury acknowledge that the whole market for scotch whisky... is diminishing due to excessive tax rises each year? Sales of scotch whisky in the UK have dropped by 12% since the duty escalator came into being.

"I want to hear what today is likely to be in the mind of the Chancellor."

Ms Morgan told the MPs the Government was committed to the Scotch whisky industry, adding it was a "protected spirit drink" to ensure its high reputation was protected at home and abroad.

But she warned she could not announce Budget moves and added: "I shall listen, I have listened, to the debate we have had today and the wider representations that have been made to me.

"I am aware of the industry's views on the pre-announced alcohol duty rises for 2014.

"This Government made changes to beer duty in 2013 to support pubs... while spirits and wine account for 41% of sales by value in the off trade, they only account for 23% of sales in pubs by alcohol volume.

"Given the Government's commitment to ensuring sustainable public finances it was not possible to end the escalator on all alcoholic products.

"Instead, the Government made a targeted reduction on beer duty... I have heard the view of MPs today and I will most definitely consider these as part of the Budget process."

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