In today’s Daily Record, SNP MSP and Parliamentary Liaison Officer to the First Minister of Scotland Joan McAlpine wrote a small column entitled French get a taste of our exports. It was a short piece of just a few paragraphs, filling out space beside her main article decrying big businesses influence on UK tax policy… perhaps more on that later.
The column could have been a nice puff piece giving a positive message of the success of Scottish food and drink exports. This being an SNP politician, however, there was of course a grievance to be had. In Ms McAlpine’s case, there is a curious moan about tax revenues which don’t accrue to Scotland. Anyone who has read my blog previously may know where this is going…
…But it’s the whisky that makes the most money.
Scotch whisky exports [to France] were valued at £445 million.
But that’s just a drop in the ocean when you consider that Scottish whisky exports as a whole came to almost £4 billion last year.
What a pity that not a single penny of the tax on that whisky will come to Scotland.
I asked Ms McAlpine on Twitter to clarify which tax(es) she meant by this. I have yet to receive a response. I then decided to write to the Daily Record letter’s page in response:
Dear Sir / Madam,
On p17 of today’s Daily Record (Wed 21.10.15), Joan McAlpine’s column “French get a taste for our exports” states that Scotland receives “not a single penny of the tax” on £4bn of Scotch Whisky exports. I would like to ask Ms McAlpine to what tax she refers?
As Ms McAlpine should well know, the Scottish Government’s GERS figures identify the value of all taxes raised in and by Scotland including income tax, NI, VAT, Corporation Tax and excise duty. In the last available figures (2013-14), this revenue came to £54bn, including oil and gas, whilst expenditure was £66.4bn; or £12.4bn more than we raised. These are her own government’s figures. Quite clearly we receive all the tax we raise and then some.
I would hope that Ms McAlpine is not referring to the nationalists’ mythical “whisky export duty”, which she should know fine well does not exist.
I’d like to give Ms McAlpine the opportunity to clarify what her statement intended; but while we are waiting I decided to have a quick search of the internet to see if any previous articles or interviews would throw some clarity on the situation. The results infuriated me, to say the least.
Ms McAlpine writes a regular column for the Daily Record and many of the results were to be found there.
This article, for example, gives us the following:
London governments will continue to rake in all of Scotland’s lucrative oil and whisky revenue.
The way which this sentence, and indeed the article, is written suggests that the revenue from oil and whisky goes to London and stays there. Anyone with even a passing knowledge of Scotland’s public finances knows that, like the UK as a whole, we run a deficit which means that we spend more than we earn – to the tune of £12.4bn in the latest available figures (2013-14). This includes a geographical share of oil and gas revenue and all the revenue from the whisky industry.
So the money doesn’t go to London and stay there. The tax is collected by the Treasury and then comes back in full and then some.
It seems Ms McAlpine is either unaware of this, in which case you’d question her competence for public office, or is trying to mislead readers with carefully selected language to project an impression of lost revenue.
The same suggestion is given in this article:
Use Scotland’s vast wealth to invest in infrastructure
With access to our own tax, including oil and whisky revenues, we could invest in roads and railways or affordable housing.
“With access to” suggests that we don’t currently “have access to” these revenues. This is clearly wrong. It is possible that Ms McAlpine is simply referring to complete control over these taxes, which would be a different argument, but the second half of the quote, suggesting that with access we could invest, lends the inference that the revenues are withheld from Scotland. Again, clearly wrong – not to mention the fact that roads, railways and housing are all devolved powers for which Holyrood already has the capability to invest.
After the referendum, the same suggestions were made. In this article, there’s another moan about missing benefit from exports:
Scotch whisky accounts for a quarter of all UK food and drink exports. It’s only right we get direct benefit from that.
Again, I’d be interested to know what “direct benefit” Ms McAlpine thinks we don’t currently get from exports that we would gain with an unspecified additional power or independence. It’s a continuation of the frankly disgraceful and widespread myth that the UK is somehow denying Scotland access to our natural resources.
Yes, Scotland was a net contributor to UK public finances during the 1980s oil boom and we will no doubt be a net contributor at various points again in the future. But at this point in time we are not. We are a net beneficiary from the union, with a higher per capita and percentage-of-GDP deficit than the rest of the UK. The Scottish Government’s own figures tell us this and to deny, or worse contradict, them is both factually incorrect and, for an MSP, morally reprehensible.
Unfortunately, Ms McAlpine has a history of using “questionable” figures. As far back as 2010, there was this article in The Scotsman:
Scotland is a rich country. The Government Expenditure and Revenue Figures, compiled by civil servants not politicians, showed Scotland with a £1.3bn surplus in 2008/9 while the UK as a whole had a deficit of £48.9bn. This included Scotland’s share of the UK banking bail out. We were in surplus for the four years up until 2009. The statistics include our geographical share of North Sea oil revenues, but oil is only part of the picture. Scotch whisky is one of Scotland’s top five exports and generates £1.6bn for the exchequer. There’s our first year budget cut sorted right away
There is one kernel of truth in there. In 2008-09 we did run a surplus of £1.3 billion. A current budget balance. This excludes capital expenditure. When capital expenditure is included, there was a deficit of £3 billion in 2008-09. Why would you exclude capital expenditure except to mislead people?
Similarly, the four years up to 2009 were not surpluses – with £6bn, £2.7bn and £3.8bn deficits in 2005, 2007 and 2008 (for some reason the 2005-06 GERS figures aren’t on the ScotGov website so I can’t quote them. If you find them please let me know).
And then Ms McAlpine again references whisky exports. Whisky exports do not generate £1.6bn for the exchequer. This is the Scotch Whisky Association’s website:
The whisky industry as a whole contributes ~£1bn to the exchequer through regular taxation and excise duty. And Scotland already receives our rightful share of this £1 billion. Unless a wholesale change in tax regime, with the resulting risk of protectionism, was proposed there would be no automatic fiscal windfall from independence via the whisky industry. This is an absolute fallacy and one which Ms McAlpine, as a senior figure in the Scottish Government, should not be propagating in such a way.
The intent is clear – generate grievance against Westminster and the union by insinuating that we are being financially penalised, that the UK Treasury is siphoning off our money for themselves. There is no such thing as a whisky export duty and Ms McAlpine, SNP MSP for South of Scotland, should be ashamed of herself whether she is spreading this myth for her own political ends or simply ignorant of the facts.
And this is not the first, or last, time that SNP politicians have exercised a tenuous grasp with the facts. Just on this blog there are examples of Stuart Stevenson, Margaret Ferrier and John Swinney being “liberal” with the truth. Yes, I know that all politicians will spin and obfuscate and misdirect but the problem is that the SNP seem to be doing it on an industrial scale and going more or less unchallenged by the press in Scotland – even, in Ms McAlpine’s case, being the vehicle for said misdirection.
I’m all for robust political debate and allowing opinions to be heard but we should at least start from the same basic facts. Pretending Scotland pays for English investment, fabricating some fantasy surpluses and inventing an entirely non-existent tax are not matters of opinion. They’re just plain wrong and they should be exposed as such.