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Why the Scottish Government must tax ‘big whisky’ amid cost-of-living crisis

THE cost-of-living crisis demands that the multi-billion profits of Big Whisky contribute to the Scottish public purse argues Bill Ramsay, convener of the SNP Trade Union Group.

THE resolution to the current Scottish local government pay dispute has been reported to cost taxpayers an additional £200 million. As such, the First Minister has said, this will have a negative knock-on effect on our public services. This is a financial sting in the tail that, in the view of the SNP Trade Union Group, need not be as venomous as is being suggested.

The cost-of-living crisis has transformed the current political paradigm of the UK and therefore Scotland. These new circumstances demand that the Scottish Government develop fresh mitigation strategies to provide some economic shock absorption, as far as is practicable under limited devolved powers.

READ MORE: Tax ‘Big Whisky’ to raise up to £1bn for public services, SNP government told

The days of claiming, or aspiring to claim, that the Scottish Government can significantly improve Scottish public services this side of independence, are over. From now on, until Scotland regains all the economic levers of a sovereign state, the name of the game is to mitigate and defend our public services within the restricted means devolution allows.

Crucially, there are further measures that the Scottish Government can still take right now. These cannot be sidestepped or ignored any longer. Partial mitigation through the raising of additional taxation and levies is possible – ones which need not be an additional financial burden on the many, or even the moderately comfortable.

One example is a whisky levy, which could potentially raise up to £1 billion. Put bluntly, it’s time Scotland’s Big Party takes on Big Whisky. Not the wee craft and niche distilleries, but the giants who run the Scotch Whisky Association and its extensive and hugely effective lobbying arm.

To see how effective the political lobbying arm of Big Whisky is, one need look no further than the carefully curated dozen “recommended” motions proffered by the Policy Development Committee to delegates at the SNP’s Annual Conference in October. You will not find the Trade Union Group motion on a whisky levy there, just as our motion on the creative use of taxation was omitted from the draft agenda.

READ MORE: Six things the Scottish Parliament CAN do to tackle the cost of living crisis

Yet this is precisely the sort of imaginative initiative that speaks directly to seeing off a great deal of the future hard choices the Scottish Government may need to make as a consequence of the recent local government pay settlement, and potentially other settlements coming down the line.

Two points are crucial here.

The Scotch Whisky Association’s own website claims that, in 2021, Scotch whisky exports were worth £4.5 billion. It also claims that the number of bottles exported was 1.3 billion. Do the maths – that means that the average export price of a single bottle of Scotch is £3.46. Even the price of a standard 70cl bottle of Scotch in Duty Free is rarely under £20.00. So where does the difference between £20 and £3.46 go? Quite simply, mostly into the coffers of wholly-owned overseas subsidiaries of – guess who – Big Whisky.

The proud boast of an export value of £4.5 billion is a massive underestimate of the true ultimate sales value of Scotch exports. 1.3 billion bottles at £20 each amounts to £26 billion. And that is only calculated on the bottom end of the market for the most basic standard Scotch. If you’ve got a bit of spare change you could lash out on a bottle of The Macallan Oscuro at just under £850 per bottle in South Korean duty-free. The real value of Scotch exports may well be closer to £34 billion.

In addition, only 8% of whisky production remains in the UK, and it is only that tiny part of Scotch production that is subject to taxation in the UK. HMRC (customs and excise) gets nothing of the near the multiple billions-worth exported.

However, if what amounts to a special industrial water rate, and some other measures, are within the competence of current devolved powers, then sums between £250 million and £1 billion could be raised. Such a levy would not touch the sides of the multi-billion-pound global profitability of Scotch. If the SWA and its lobbyists feel otherwise, then let’s have an open debate about that. The cost-of-living crisis demands that all such options be considered.

Closing down the possibility of a Scottish Government-sponsored, transparent public debate on this proposal and others will not be a good look today or tomorrow, particularly as winter bites and tens of thousands of Scots go hungry, cold, or both.

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Below is the full text of the motion submitted for consideration by the SNP conference in October. The SNP Trade Union Group is urging party members to support it in their choice ballot which will be sent out before the event. 

WHISKY LEVY FEASIBILITY STUDY

Conference recognises that Scotland is facing a cost-of-living crisis due to the lack of appropriate action by the Treasury of the United Kingdom, and that consequently the decisions made by the Treasury of the United Kingdom will be a key argument in the case for an Independent Scotland.

Conference also recognises that a primary role of the current SNP devolved administration will be as far as is practicable, under its limited powers, to mitigate the impact of this cost-of-living crisis on all in Scotland who are affected by it.

Conference therefore calls upon the Scottish Government to engage with all stakeholders, but in particular the Scottish Trade Union Congress, to examine the feasibility, of using all of the existing limited devolved powers, to maximise sources of revenue including the feasibility of a domestic levy on the production of whisky.

SNP Trade Union Group, Southside SNP branch

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