Scotland’s national drink could be costing more for a dram in Scotland

The SNP Conference in October is proposing a new tax on whisky, to “mitigate the impact of this cost of living crisis”.

The Scottish whisky trade is one of our biggest assets in Scotland, with exports of £4.51bn in 2021. To Moray, whisky is a key part of the barrel in our local economy. You don’t need to look far to see a distillery across our area, with Moray Council listing 16 across the region.

The motion has been penned by the Glasgow Southside branch of the SNP, Nicola Sturgeon’s own local branch! How can a Scottish First Minister not understand how important this trade is to us in Moray? Or has she turned a blind eye?

This new levy on whisky may be reasoned as a consequence of the Tory-led cost of living crisis, but in real terms, a higher cost would mean Moray is hit even harder. Distilleries would suffer the cost, and that could in turn impact jobs in Moray.

And what about one of the biggest events in our calendar? The Spirit of Speyside Whisky Festival. 500 events took place as part of this festival in April and May. If the cost per drink goes up, that could have a knock on effect on the cost to host an event like this and the number of tourists visiting our area could drop.

There are far too many uncertainties and possible impacts for introducing this new Whisky Tax. The proposal should be scrapped before it ferments.

This is surely common-sense economics. If you have something that is a massive export (which already is taxed highly due to Excise Duty), if you tax it higher it will impact your international exports as well as damage the local economies that have a high amount of jobs in the industry.

As Convener of the Moray LibDems, I am totally opposed to this unfair tax on the dram. This hurts Moray and we deserve better. Our local industry, in this case distilleries, deserve better.

* Neil Alexander is a Scottish Liberal Democrat Executive Member. He is a former GCU and University of Greenwich graduate, currently studying part-time for a PhD in Sports Science (Rugby) and Video Game Design - whilst working full time as a Game Designer in Elgin.

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4 Comments

  • Is Mr Alexander aware that the National Records of Scotland published the following press release on Alcohol-specific deaths on 17 August, 2021, and how would he respond to it ?
    “Alcohol-specific deaths in Scotland increase”…….
    The number of alcohol-specific deaths has increased by 17% to 1,190 in 2020, up from 1,020 in 2019, according to statistics on deaths by various causes published today by National Records of Scotland.

    These figures show a return to the recent upward trend in the number of alcohol-specific deaths in Scotland following a decline in the previous year. This is the largest number of deaths due to alcohol recorded since 2008 “.

  • Brad Barrows 28th Jul '22 - 3:09pm

    At a time when Scotland’s finances are under so much pressure and with only the rates of Income Tax being the only major tax under Scottish control, it is not surprising that the Scottish government should be looking for ways to increases the resources at its disposal. Given the choice between raising a tax on whisky, raising income tax rates or having to accept real terms cuts to vital public services or the pay of the public sector workforce…I think the additional whisky tax is the least bad option.

  • As Neil points out “This is surely common-sense economics. If you have something that is a massive export (which already is taxed highly due to Excise Duty), if you tax it higher it will impact your international exports as well as damage the local economies that have a high amount of jobs in the industry”.
    This is the dilemma with taxes on luxury goods. The classic example was in the USA In 1990, when a 10% luxury tax was applied to boats in the U.S. and the results were disastrous. Over 25,000 boating industry jobs were lost and a tax that was supposed to generate millions of additional government revenue actually cost the government revenue. Congress was quick to acknowledge the damage the tax was causing, and the tax was repealed.
    The SNP has highlighted so called sin taxes in its policies for an Independent Scotland SNP release radical plans for independent Scotland. “The report says wealthy people should “carry a bigger share of the load” so that those with the least are not “plunged into deeper depths of poverty and despair.”

    It supports shifting the burden of tax away from “productive” parts of the economy to activities that should be discouraged. Sin taxes are cited as a key feature of a reoriented tax system. Land value tax is favoured over council tax.”
    All good except when it comes to Whiskey distilleries. Here, the impact on exports and employment needs careful consideration. If taxes are to be increased, it needs to be done intelligently. Better replacing business rates and council tax with Land Value Tax. Whiskey distilleries with the higher value land assets will pay more and those on marginal land will pay less.

  • Given 2020 was the first year of CoViD19, so total deaths increased from circa 58,000 to circa 62,000, I think we do need to treat the data with a little caution.

    Interesting report: Alcohol-specific deaths
    2020, National Records of Scotland

    From a quick review of its key findings, increasing the price of whisky or alcohol in general, will do little to address the problems these deaths seem to be flagging.

    Interestingly, there was similar motion at last years SNP conference, perhaps Neil needs to talk with Alex Cole-Hamilton who welcomed the decision of the SNP chiefs to not include the motion in the final conference plans…

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