Scottish business leaders have called for fair taxation for the whisky industry and new incentives to “reinvigorate” declining oil and gas exploration.
In a letter to George Osborne setting out its wish list for the chancellor’s next Budget, the Scottish Council for Development and Industry (SCDI), demanded an end to the “penalisation” of firms making Scotland’s national drink.
It wants to see the whisky duty escalator, which increases the tax by 2% above inflation each year, scrapped.
SCDI also asked for the UK Government to consider further changes to the fiscal environment for oil and gas, and a rethink of its decision not to include Scottish offshore wind projects in a recent list of projects earmarked for support.
In addition, the business group called for action on high levels of air passenger duty that were “a barrier to improving Scotland’s connectivity” and increased spending on transport infrastructure.
In the letter to Mr Osborne, SCDI chairman Bill Drummond said whisky excise duty was now 44% higher than in 2008.
He added: “The UK is the fourth highest taxed spirits market in the European Union.
“The UK is still the third largest market by volume for Scotch whisky, but volumes have declined by 12% over the last five years.
“Overseas markets often use large tax increases on Scotch whisky in the UK to justify their own protectionist tax rises, harming UK exports.
On energy, Mr Drummond said: “Incentives introduced in recent Budgets to the fiscal regime for North Sea oil and gas and greater certainty about decommissioning costs are supporting record capital investment and new fields being brought into production. However, exploration and appraisal drilling has fallen to its lowest level since 2003 due to smaller discoveries, increasing costs, and a lack of finance and available rigs.
“There is an urgent need to consider further changes to the fiscal regime, to support the recommendations on regulatory changes which are expected in the forthcoming (Sir Ian) Wood Review.”
Mr Drummond said the absence of any Scottish wind projects on the government’s initial list of schemes deemed provisionally affordable under the government’s “final investment decision enabling process” for renewables was a serious setback for green energy north of the border.
The chancellor will deliver his next Budget on Wednesday, March 19.
SCDI chief executive Ross Martin, said: “It is positive to see increasing output, falling unemployment and growing confidence as businesses regain ground.
“But a truly balanced recovery, with higher business investment and exports, would increase its resilience and long-term sustainability.
“SCDI welcomes steps already taken to stimulate growth but believes there remains room for action to be taken to support our key exports, harness our energy potential and deliver infrastructure.”
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