Why, then, do our governments take such a smallminded approach to these flagship businesses? Salami-slicing by the Treasury with tax hikes risks killing the goose that lays the golden eggs, while the myopic approach of the SNP and Greens risks making the problem even worse.
Today the House of Commons debates the Finance Bill. My amendment, backed by the Scotch Whisky Association, would cancel the increase and freeze the rate of duty on spirits. A balanced approach to taxation on our flagship products is the best way to grow both the business and the Treasury’s take for the long term – and protect jobs in our communities.
Spirits are big business for the UK – and yet they are also intensely local businesses. Distillers are hubs for economic activity in the Highlands and Islands. They provide stable, quality jobs in places where these can be hard to maintain. We undermine these community supports at our peril.
The Tories are never slow to talk up concerns when it is the SNP causing a mess for our spirits producers. The mishandling of the deposit return scheme over the past few months and the proposed advertising ban from the Scottish Government (both now delayed once again, a win for businesses and a humiliation for the SNP-Green coalition) gave everyone reason to critique the nationalists’ cackhanded attitude towards drinks producers.
It is rank hypocrisy, however, for Alister Jack and Douglas Ross to stay mute while the Chancellor hikes spirits duty. The last thing our distillers need now is another tax rise, but Scottish Conservatives are too weak to do the right thing.
Meanwhile, the SNP’s response to this tax mess is to focus solely on reversing the rise on whisky producers. Perhaps they have forgotten how many spirits producers make more than one product – or that Scotland supplies around 70 per cent of UK gin.
There are over 90 gin distilleries across Scotland. All would be left taxed to the hilt by the SNP’s amendment. The City of Aberdeen Distillery and the Langstane Liquor Company are in SNP Westminster leader Stephen Flynn’s constituency, and yet he did not see fit to allow them a fair tax settlement. The two MPs leading this exclusionary amendment do not have a single gin distiller in their constituencies. That may tell you all you need to know about the thought involved, or lack thereof.
Narrowmindedness and parochialism does not have to be the way forward. When I was in government, we delivered not just a freeze but a cut in spirits duty. It was a massive boost for the industry – and it increased the money coming into Treasury. That is what you can achieve when you have the political will.
There is a better path. Scottish Tories could – improbably – be part of taking it. The Conservatives have a bare cupboard in their choices for Scottish Secretary. Alister Jack knows this better than anyone. He has the chance to turn that weakness to the advantage of Scottish businesses. He could back us against the tax hike – and dare the Prime Minister to sack him.
Does our Scottish Secretary have the guts and the vision to act? We shall find out this afternoon. Distillers – and the communities that they support across Scotland – will be watching.
Alistair Carmichael is Scottish Liberal Democrat MP for Orkney and Shetland