BBC, December 2013:
The Scotch Whisky Association (SWA) has urged the UK government to abolish the automatic annual increase in duty on wines and spirits.
The industry body is fronting a campaign to encourage consumers to raise the issue with their MPs. It said the alcohol duty escalator was damaging the domestic market and punishing consumers when household budgets are tight.
The Treasury said 90% of Scotch whisky was exported and unaffected by UK duty.
Quite correct.
Although UK alcohol duty (and especially spirits duty) is far too high (with VAT on top, of course), it only affects domestic demand as it is not levied on exports; output is fairly fixed in the short term, so all things being equal, higher domestic duty is 'good' for exports. The same logic applies as it does to domestic duty on imports, which is 'bad' for imports.
That economics Wunderkind Osborne has now finally decided to firmly grasp the wrong end of the stick and came up with shit like this in his Budget speech today:
Mr Deputy Speaker, we want to help families with simpler taxes – and with lower taxes too...
And to back one of the UK’s biggest exports, the duty on Scotch whisky and other spirits will be cut by 2% as well.
Quite clearly, all things being equal, this will reduce exports of whisky.
Debate Magazine
