One more shot of whisky

Scottish Policy Jan 11, 2013 1 Comment

A £1 tax on a bottle of whisky solves Scotland’s austerity problems and sorts out our universal public services for good. Don’t let the corporate bullies push this idea off the agenda.

Having dashed out yesterday’s comment on whisky with multiple interruptions I wish I’d taken time to include more data sources. I feel it didn’t sufficiently explain the two problems I was trying to highlight. First, the actual economic impact in Scotland of whisky production is massively less that people realise and second that the corporate drinks lobby is so powerful that its PR claims are almost never challenged. Yesterday I provided a link to work by Donald Blair. What I missed was the following excellent report from BiGGAR Economics which calmly works its way through the numbers. Have a look for yourselves (Download it here) – it’s an easy enough read and will prove eye-opening. For example, I didn’t know that the total investment of this ‘£5bn’ industry in Scotland is about £200m a year. That is tiny. I’m also amazed to discover that of all of the industry’s investment in the UK, 70 per cent of the investment is not in Scotland. For every pound it invests in whisky infrastructure in Scotland, almost £3 seems to be invested in whisky infrastructure in London. Or that the industry appears to make an eye-watering 60 per cent profit from its activities in Scotland. Or that the most recent calculation on GVA of the sector in Scotland is £526, mostly in wages.

But most starkly of all is the straightforward and measured assessment of the income that would be generated from a bottle tax on whisky. A tiny 10p tax would raise about £128m, even allowing for drop-off in sales or reduction in production. By the time you get to a straight £1 per bottle tax, Scotland earns a billion pounds. In fact, if the producers pass the cost on to the consumer in fact the income to Scotland would hit £1.222 billion pounds. That is Scotland’s universal public services ‘problem’ solved in one go. It almost looks like the SNP was wrong to focus on an oil fund. A whisky fund would do just fine.

Here’s the point I really wanted to make; neoliberal economics makes the assumption that all things are answerable to the market and never the other way round. If ‘the market’ (a private individual) owns ‘an asset’ (say a fine Scottish water supply for making top quality whisky) then the only possible contract is between the owner and the asset. This is damned nonsense. These are Scotland’s natural resources; our rain is a collective good in which we should all share (never thought I’d write that sentence…). In three areas, Scotland seems to be to be a ragged-kilted philanthropist. We have oil; private corporations get rich from it and we ask for a little bit back from them. We have whisky; private corporations get rich from it but we barely even ask for a little back. We have wind for generating electricity; right now we are giving it over to private corporations more-or-less for free in the hope they’ll give us a few jobs.

This economic model is sheer madness. What kind of a country doesn’t try to get the maximum benefit for its people from its own natural assets? Scotland. We need to nationalise the wind industry as Patrick Harvie has suggested, we need to take from the whisky industry the contribution to the nation whose asset makes it rich which it refuses to make itself, and we need to think about what our relationship to our oil really is.

This is not protectionism in the sense of us protecting our industries from fair competition. This is protectionism as in protecting Scotland and its people from vulture corporations exploiting our assets for private profit. We don’t need another dose of austerity; Diagio does. If only we would stop fearing the Scotch Whisky Association and its propaganda. Tax them; they have nowhere to go and we have everything to gain.

Robin McAlpine

One Response to “One more shot of whisky”

  1. Duncan says:

    I’m not sure that Patrick Harvie actually mentioned nationalisation as an option. I think he is suggesting an alternative form(s) of public or community ownership and control of renewable resources rather than centralised state control. New concepts of public ownership are vital for any vision of radical independence.

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