Alistair Carmichael: ‘The government must rethink its tax hikes on the Scotch whisky industry — not double down’

Scotland’s whisky industry has always had an eye on the long game. When even the shortest-lived product you create has to be aged for at least three years – often far longer – you need a vision that spans not weeks or months, but decades. Small wonder, then, that the Scotch whisky industry has been a by-word for both resilience and innovation in our economy for decades.

It is a far cry from the short-sighted decision-making that has come to mark our political landscape. I suspect that more than a few working in our politics could learn a lesson or two from our distillers’ more long-term approach.

After all, the UK faces significant economic challenges in both the short- and long-term. One of the most pressing is inflation – down from its peak, but still persistently the highest rate among the G7.

In the throes of that inflationary pressure, the government’s decision to impose a double-digit tax hike on Scotch whisky and other spirits from August has been hard to fathom. They have pushed up prices and pushed the burden onto consumers at a time when they can least afford it – and sent ripples through the industry and the economy.

Support for the whisky industry is as good a way as you could wish for to ensure strong tax receipts for years to come. I can speak from experience; when I was in government we worked to deliver a duty cut on spirits. Far from reducing income to the Treasury, we saw tax receipts go up due to increased growth. Recent decisions by the government, however, have taken the golden goose for granted. In a rush to fill short-term coffers, ministers are neglecting long-term economic stability and growth for our flagship industries.

This tax drag is bad for consumers but it also limits industry’s ability to invest in future growth and net-zero goals. Meanwhile distillers have faced soaring energy prices over the last year, while being inexplicably excluded from government business energy relief which was open to brewers and cider makers. If in doubt it is best to assume cock-up over conspiracy, but it would be hard to think of a better way to handicap a keystone sector for our economy than this.

Despite these government-imposed headwinds, however, Scotch whisky continues to thrive. It contributes a remarkable 25% of UK food and drink exports – and a staggering 77% of Scottish food and drink exports. The value of the industry to the UK-wide economy is undeniable.

Just as important as the national picture, however, is the Scotch whisky industry’s role in our rural and island communities. The sector employs over 11,000 people, with 7,000 of these roles in rural areas. These high-quality jobs sustain families, communities, and other small businesses across Scotland.

Those deep roots breed resilience and creativity – something else our government could stand to adopt. From centuries-old establishments to new start-ups, vibrant local distilleries have a drive to evolve, to do better, and to lead. Businesses like these share knowledge locally and globally, helping to ensure that the industry remains at the forefront of change. In an era where competition often stifles collaboration, it is another lesson worth learning for our political leaders.

There is no time to lose to put that lesson into practice. The Chancellor’s Autumn Statement is fast approaching – a chance for a reset for the economy and for the government’s relationship with our whisky industry. It is vital that the government reflects on its approach and rethinks its tax hikes rather than doubling down with more.

The Scotch whisky industry offers a blueprint for success that the government should not ignore but imitate – focusing on long-term goals and investing in the community. The government’s current way of working has been mired in short-rooted short-termism, and it shows. It is past time to take a lesson from our distillers – and look to the long game for our economy. is the UK’s leading digital-only political website, providing comprehensive coverage of UK politics. Subscribe to our daily newsletter here.