How scotch instilled a new spirit among MPs: Budget freeze on duty followed a fresh approach to lobbying

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The Independent Online
THE SCOTCH whisky industry has always played a numbers game in its push for fairer tax treatment - and lost. But last Tuesday its run of bad luck ended when Norman Lamont in his Budget handed the industry a dividend - a duty and tax freeze.

The outcome owes much to a change of tack by the industry's trade body, the Scotch Whisky Association. After suffering yet again from increased duties in the 1992 Budget, the association decided to broaden its arguments.

Instead of depending on the specific issue of the tax on a bottle of whisky, the association turned a Scottish issue into one for the whole nation.

The push against the Government began at the political party conferences last autumn. Outside help was used for the first time with the hiring of the Communication Group, a public relations and political lobbying company.

By using outside help, the association's access to MPs of all persuasions widened. David Hughes of the Communication Group added: 'We looked at the situation from a fresh perspective and put a distilled version of the case into MPs' hands.'

The campaign was launched under the slogan 'Don't tax our British spirit'. The use of the word British, instead of Scottish, had a subliminal effect - particularly when set against the welter of statistics collated by the association.

For every person involved directly in the industry in Scotland - about 15,000 - there are four more employed elsewhere in the UK in bottle making, label making, packaging, distribution and sales.

For years the industry has consistently been in the top five of the UK's export earners. More than pounds 2bn of Scotch was shipped from the UK last year. And the amount of tax levied on Scotch and other spirits in the 1991/2 financial year was pounds 1.7bn.

The campaign also used the fact that each nip of whisky sold in a pub delivers 23p to the Government, while each glass of wine provides 12p and a gulp of beer less than 10p.

Only Denmark and Ireland of the EC states impose a more stringent tax regime on spirits than the UK. Spain levies just 11p duty on a standard bottle of Scotch against the UK's pounds 5.55.

While the industry won a battle on Tuesday, the war is far from over. The tax differentials across Europe are a cause for concern, because of the relaxation of customs allowances at the start of this year. Whisky brought into the UK by travellers is bad news for the home market, which saw sales last year fall by 8 million bottles to 118 million.