Spirits Tax

Treasury written question – answered on 30th March 2004.

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Photo of Mr David Stewart Mr David Stewart Labour, Inverness East, Nairn and Lochaber

To ask the Chancellor of the Exchequer

(1) if he will estimate the impact of the introduction of strip stamps upon the competitiveness of UK distillers, with particular reference to the Scotch whisky sector;

(2) what estimate he has made of the effect on the cost of packaging for UK distillers of the introduction of strip stamps; and what estimate he has made of a consequent impact upon consumer prices;

(3) what estimate he has made of the impact of the introduction of strip stamps upon the efficiency of the UK distilling sector, with particular reference to Scotch whisky distillers;

(4) how many strip stamps he estimates UK distillers will need to purchase each year; and if he will estimate the impact of this cost upon (a) employment and (b) profitability in the UK;

(5) how many jobs he expects to be (a) eliminated and (b) created by the introduction of strip stamps; and what estimate he has made of possible impact upon consumer prices.

Photo of John Healey John Healey The Economic Secretary to the Treasury

The Government announced in the Budget that, owing to continued high levels of spirits duty fraud, it would legislate to implement the Roques report recommendation to introduce tax stamps for spirits. In doing so, the Government will help the trade financially with compliance costs by deferring payment for tax stamps, assisting firms with capital investment and freezing spirits duty for the remainder of this Parliament. Further announcements will be made once detailed options have been considered in discussion with the trade.

A regulatory impact assessment, to be published alongside the Finance Bill, will set out the anticipated impacts, costs and benefits of the tax stamp regime. The impacts on compliance costs, competitiveness, employment and consumer prices will all depend on the detailed measures taken to implement tax stamps, on the measures the Government will introduce to offset the impact on legitimate business and on business decisions taken by companies involved in the spirits production and supply industry.

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