Could a duty-freeze on Scotch whisky help to stop binge-drinking?

It is one of the most infuriating yet intractable problems in Scottish politics: everyone agrees that something has to be done to tackle Scotland’s booze culture, but nothing has really ever been done.

Yes, there has been tinkering around the edges, but the only real and cogent plan – the SNP’s proposal for minimum pricing – was tossed out by opposition politicians worried that the big retailers would end up as the only winners. Now, though, there may be a solution – and it has come, quite surprisingly, from a part of the drinks industry itself: the Scotch Whisky Association (SWA). The beauty of the SNP’s plan was in its simplicity – enforce a legal statutory minimum price for every unit of alcohol. This, ministers argued, would push up the price of the sorts of cheap booze which cause the most problems and make alcohol so expensive that young people could no longer afford to get plastered whenever they liked.

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But no, said Labour, that will just drive up the profits enjoyed by the big retailers who will charge more for their booze and rake in the money. Far better, they said, to use the tax system to push up the price of alcohol – that way the extra resources can be used to tackle the problems alcohol causes in society. With the two sides deadlocked, the SNP’s plans were defeated and a great chance to at least start to tackle Scotland’s booze culture was missed. The scale of that missed opportunity is only becoming clear as Northern Ireland and England start to examine ways of introducing minimum pricing. Scotland could be left in the embarrassing position of having the most acute problem and nothing in place to tackle it. But this is where the SWA plan comes into play. It has just submitted an appeal to the UK government ahead of the budget, asking for a freeze on duty on whisky. The SWA suggests by implication (it doesn’t quite state it) that duty should be increased substantially on cider, beer and wine to create a level playing-field with the higher-taxed whisky industry. It is obviously in the Scotch whisky industry’s interest for that to happen, and the SWA wouldn’t be doing its job as a lobbying group if it didn’t ask for duty to be lowered on its own product while suggesting it might raised for its competitors instead. But leaving aside the self-interested side of the SWA’s appeal, there is actually something there that the politicians in Scotland could unite over. Whisky is Scotland’s biggest export and everyone agrees that it shouldn’t be penalised by excess taxes in the UK which act as a incentive for other countries to do the same. If duty was frozen on whisky, then this most famous and profitable of British exports could continue to boom, which is exactly what it is doing at the moment. As one senior figure in the industry told me after recent bumper export sales figures were announced: “I don’t know a single person involved in whisky who hasn’t got a smile on their face at the moment.” If whisky was, therefore, protected from further duty hikes and the politicians wanted to do something to tackle binge drinking, then big rises could be imposed on beer, cider and wine instead. This is where the whisky industry's appeal gets interesting, because the figures seem to bear out its argument. According to the SWA, Scotch whisky is taxed 250 per cent more than cider, 37 per cent more than beer and 30 per cent more than wine. Were duty on all these four categories of alcohol standardised, this would achieve four important results: it would raise the price of the standard drinks of choice of many young drinkers; it would protect an important Scottish and British export; would raise much-needed revenue for the Treasury; and it would introduce a level, universal price-per-unit of the sort that both the SNP and its unionist opponents have been striving for. Everyone seems to agree that prices for the most widely available alcoholic products need to rise. Everyone – in Scotland at least – also seems to agree over the need to protect the country’s number-one export. And everyone seems to acknowledge that a level playing-field, with a universal price-per-unit for alcohol, is the most sensible long-term option in tackling our drink problems. The SWA’s plan would achieve all these aims and also provide a way for both the SNP and the Labour Party to agree on a compromise which will result in neither losing face nor stepping back from its ideals. Is it likely to be agreed? Almost certainly not. This is a taxation issue, so it will be decided by the chancellor, George Osborne, who will also be lobbied hard by UK’s beer, wine and cider producers. None of these will relish the huge tax hikes which would come their way if they were taxed as heavily as whisky. Mr Osborne knows he cannot be seen to be favouring one part of the drinks industry over any other, regardless of how important an export Scotch is for the entire UK economy and not just for Scotland. But what this episode shows is that there are ways of tackling these problems, however intractable they may seem, and sometimes they come from the most unlikely of sources.

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