Scotch lobby in plea to protect distilleries

Budget countdown: Threatened by closures, the whisky producers of the Highlands and islands call for easing of tax burden
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Chief Political Correspondent

John Major's commitment to listen to Scottish opinion is being challenged ahead of the Budget by the Scotch Whisky Association, which is lobbying hard to protect the distilleries from further closure.

A total of four distilleries producing malt whisky closed in the past year - Bruichladdich on Islay; Tullibardine in Perthshire; Tamnavulin in Speyside; and Glen Garioch in Aberdeen.

But it is not only the loss of the amber nectar that the Scots mourn. It is the loss of communities that the distilleries support.

"There may be only a handful of jobs in each distillery but the position of the distillery in the community is very important. Quite often, they keep the local school going, the district nurse, the hotel and the shop. The whisky lorries going to and fro keep the ferries open to the islands," said Campbell Evans, a spokesman for the Scotch Whisky Association.

The four distilleries which closed brought the total number of working distilleries down to 87 in Scotland.

The SWA lobbies the Treasury every year for a freeze in duty on whisky, but in recent days, its leaders have met Kenneth Clarke, the Chancellor, to demand a cut of 8 per cent which would take 50p off a bottle of whisky, with 4 per cent cuts ever year for the next 14 years.

The Treasury's revenue from whisky fell by pounds 80m when the duty was increased by 25p on a bottle in 1992. Mr Clarke avoided any increase in his Budget last year, but reversed the decision, and increased it by 26p a bottle in his mini-budget after the defeat over VAT on fuel. The SWA say that revenue has fallen by pounds 54m as a result.

"More duty means less for the Treasury," said the SWA spokesman. The association's aim is to reduce the tax on Scotch to the level of beer or wine. They complain that the duty on a glass of whisky is 29p, compared to only 17p for a glass of wine or 15p for a half pint of beer.

They have hired a top-flight Westminster lobby organisation, the Communications Group, and have been behind two delegations to see Mr Clarke at the Treasury to press their case.

The campaign is being handled by Jonathan Caine, who was until a month ago the special adviser to Sir Patrick Mayhew, the Secretary of State for Northern Ireland.

Dame Jill Knight, the veteran Tory backbencher, led a delegation of Conservative MPs to the Chancellor a week ago. Mr Clarke met a group of senior SWA executives, including Hugh Morison, the director general, and John McGrath, chief executive, to hear their demands.

Mr Clarke, a beer drinker, refused to give anything away.