A bid by opposition MPs aimed at freezing duty on spirits such as Scotch whisky at the same rate as weaker alcohol drinks was rejected in a Commons vote.
Lib Dem Alistair Carmichael (Shetland and Orkney) urged MPs to back his party’s amendment, which was supported by the SNP, saying it was “right for such an important industry in Scotland”.
He told the Commons: “For some reason we seem now determined to introduce a duty increase which is going to have an inflationary impact, but for some of the most economically vulnerable communities in the country, is going to have the effect of stymieing growth.”
He asked: “If what we are trying to do here is actually something that is going to bring in more money to the Treasury, then surely a duty freeze at the very least should be what is on offer.”
He also appealed directly to Secretary of State for Scotland Alister Jack, who has publicly claimed he lobbied against the duty hike.
Mr Carmichael said: “Our real disappointment though is that having publicly disagreed with the Government in relation to this I have a strong suspicion that when we divide this afternoon he will be in the other lobby.
“It is all very well to wring your hands, but if when the moment comes and the division bell rings you are not prepared to follow and do what you thought was right for such an important industry in Scotland in so many of our communities, then I feel that we are, as politicians, failing in our duty to our constituents and those whom we seek to serve.”
SNP frontbencher Kirsty Blackman said the SNP would back the Lib Dem amendment.
Speaking during scrutiny of the Finance (No 2) Bill, she said: “It is the case that this is incredibly unfair and risks damaging those economically fragile areas that we have got in particularly in rural Scotland, areas that have already suffered as a result of Brexit with the reduction in the ability of people to freely move here.”
Responding, Treasury minister James Cartlidge said: “We’re all proud of Scotch whisky and the role it plays in our economy.”
But he added the proposed amendment “would cost in the range of £1.7 billion to £2 billion”, while an “overall RPI freeze would cost £5 billion across the scorecard”.
He added: “Every single business in the country, every charity, every household, the one thing trumps all of those things, which is they want the Government to run the public finances in a stable way so that businesses have confidence that they believe that the investments they make will be in a growing stable economy.
“So I totally understand where (he) is coming from, but he hasn’t persuaded me that he has an idea on where to find the billions of pounds from.”
The amendment was rejected in a vote by 54 votes to 290.