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Last Updated: Monday, 26 April, 2004, 16:51 GMT 17:51 UK
Treasury defends whisky tax plan
Tax stamp
The Treasury estimates fraud is worth 600m a year
The Treasury has indicated that it will press ahead with plans for duty stamps on whisky bottles despite criticism from the Scottish Affairs Committee.

In a report, the committee said it was "highly questionable" whether strip stamps were the best way to combat fraud.

It had urged the chancellor to scrap the controversial plan.

However, a Treasury spokesman said there was no "serious alternative" and if there was, "we would take it".

A strongly-worded statement continued: "But the simple fact is that through three years of detailed work with the industry no one has come up with such an alternative and nor has the select committee in this report.

"We are now working closely with the industry on the implementation of tax stamps, and ways to reduce the costs for companies. "

The cross-party group of MPs sitting on the committee had said they were "far from convinced" that the government had fully considered all possible alternatives to tackle fraud.

Whisky warehouse
The industry warned that the stamps will damage competitiveness
The Scotch whisky industry has been campaigning against the chancellor's proposals to introduce strip stamps on bottles of whisky.

Mr Brown wants to combat fraud on duty, which the Treasury estimates is worth 600m a year.

The industry disagrees with the figure, although it says it is willing to work with ministers to tackle the extent of the problem.

The industry had proposed an alternative system of guarantees which it claimed would be more effective.

It has warned that the stamps, which are intended to provide physical proof that duty has been paid on each bottle, will damage competitiveness while doing little to tackle spirits fraud.

However, the chancellor announced in his Budget that he would be pressing ahead with the plans.

The Scottish Affairs Committee's report said there was uncertainty about level of spirits fraud.

It does not counter fraud in the most effective way and it is uncompetitive
Angus Robertson
Scottish National Party MP
However, it added that it was "highly questionable" whether strip stamps were the best way to combat the problem.

The issue is due to be discussed by MPs on Tuesday during the passage of the Finance Bill.

Scottish National Party MP Angus Robertson said the evidence given to the committee had been overwhelmingly against the introduction of strip stamps.

The vice-chairman of the all-party Scotch Whisky Industry group said: "There are a host of convincing reasons why strip stamps are a very bad idea, and any one of them should be reason enough not to be introduced on an industry which employs tens of thousands of people across the length and breadth of the country.

"It does not counter fraud in the most effective way and it is uncompetitive and will undermine the industry."

He said the industry had placed a fully-costed anti-fraud package on the table.


WATCH AND LISTEN
Angus Robertson, Scottish National Party MP
"Nobody has spoken out in favour of strip stamps"



SEE ALSO:
Dram good news for whisky bosses
21 Apr 04  |  Scotland
Distillers' anger over tax plan
17 Mar 04  |  Scotland
Measures aim to beat whisky fraud
03 Mar 04  |  Scotland
Brown vows whisky duty action
11 Dec 03  |  Scotland


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