The constitutional politics of Scotch whisky
When it comes to whisky, crucial policy levers are split between the Westminster and Holyrood. Confused jurisdiction over this most Scottish of products is a symbol of broader problems.
When the fascist-turned-Leninist poet Hugh MacDiarmid set out in the 1920s to write his magnum opus, intended to be a modernist masterpiece that would serve as the Scottish nationalist answer to Ulysses and ‘The Waste Land’, he had (among many other decisions) to choose what topic to open with. Not for him stately, plump Buck Mulligan shaving, nor lilacs breeding in cruel April. No: the first theme MacDiarmid gives an extended treatment to is how much worse whisky1 is nowadays.
Forbye, the stuffie’s no’ the real Mackay.
The sun’s sel’ aince, as sune as ye began it,
Riz in yer vera saul: but what keeks in
Noo is in truth the vilest ‘saxpenny planet.’And as the worth’s gane doun the cost has risen.
Yin canna thow the cockles o’ yin’s hert
Wi’oot ha’en’ cauld feet noo, jalousin’ what
The wife’ll say (I dinna blame her fur’t).It’s robbin’ Peter to pey Paul at least…
And a’ that’s Scotch aboot it is the name,
Like a’ thing else ca’d Scottish nooadays
—A’ destitute o’ speerit juist the same. [Hugh MacDiarmid, ‘A Drunk Man Looks at the Thistle’, ll. 9–20.]2
In the last two lines of this passage, reflections on whisky lead MacDiarmid’s narrator, the titular ‘Drunk Man’, to segue into one of the main themes of the poem: ‘sic transit gloria Scotiae’, the pessimistic Scottish nationalism of which MacDiarmid was always the most extreme exponent (and about which I have written before on this blog). Everything from Burns suppers to Scottish Christianity is accused by the Drunk Man of lacking in true spiritual richness, or (what was for MacDiarmid basically the same thing) lacking in true Scottishness, its spirit sapped by long years of union. But the first complaint, the germ out of which the Drunk Man’s pessimistic nationalism grows, is about whisky.
Some of the ideas that MacDiarmid hinted at were laid out more explicitly (albeit much more crudely) a few decades later by the former spy and alleged-attempted-assassin-of-Lenin, Robert Bruce Lockhart. His Scotch: The Whisky of Scotland in Fact and Story (first published 1959, last edition 1974) is a dated but—in its own way—charming and well-written little book. It tells the story of the drink in a traditional romantic mode, with David Hume’s ‘bare-arsed Highlanders’ playing a key role.
Lockhart ends his romantic story with the Scotch industry come to a relatively stable and economically-prosperous equilibrium. But Lockhart sounds a plaintive note: foreign demand and heavy alcohol taxes have put the price of high-quality malt whisky (the true ‘he-man’s drink’) beyond the reach of the average Scot, who instead turned to blended whisky made ‘for weaker stomachs’.
Hope remained, though:
I do not doubt that the Scottish people will eventually succeed in restoring whisky to its proper place as the national drink. One thing is certain: the remedy for the existing calamity lies in their hands, and their hands only… after years of frustration, decline and neglect, there is now a great and vigorous revival of national sentiment… [M]ost Scots, and I would say all Scots who think seriously of their country’s future, are resolved that Scotland shall have a larger control of her own national affairs, and of these whisky is certainly one. So strong has this sentiment become that to-day only differences of opinion regarding the nature and extent of this control divide the nation.3 [Robert Bruce Lockhart, Scotch, sixth edition, p. 171.]
Reflections on whisky and its place in Scottish society segue seamlessly into a gentle, but unmistakeable, demand for power to be exercised from Scotland by Scots.
This spy-turned-booze-writer was hardly the most subtle or thoughtful advocate of devolution in this period. But Lockhart’s plea for devolution is interesting because he had a specific expectation of how devolved powers would be used: Scotland would cut taxes on whisky.
[T]here have been other changes which are wholly deleterious… The most damaging of these changes is the gradual increase of taxation which has deprived the Scots of their national drink.
As far as whisky is concerned, no one wants to see Scotland a drunken country, but surely it is for Scots themselves to decide how much of it they shall drink and what price they shall pay for it… The English are ripe in political wisdom, but they do not seem to understand that whisky is part of the Scottish heritage and that, if they continue to tamper with it, they will cause trouble for themselves. [pp. 170–172.]
As anyone who’s at all followed recent British budgets probably knows, this is exactly what didn’t happen. Despite a devolved Scottish Parliament being set up in the late 1990s, explicitly given ‘tax-varying powers’, taxes on whisky are still set by the UK Government.
This state of affairs is a product of unspoken assumptions more than explicit policy intentions. Devolved Scottish institutions were created in the shadow of the Thatcher government, which was perceived to have no democratic basis in Scottish society (the Conservatives had almost no seats north of the border) and which cut taxes and privatised many public utilities and services. The general and vague desire for Scottish control over taxation that had been expressed up until the 1970s took specific shape over the course of the 1980s and 1990s: Scots, if they so desired, should have the power to raise tax to protect public services. The power to raise or lower income tax by a few percentage points was therefore given to the Scottish Parliament as a means of guaranteeing funding for the statist ambitions of Scottish politicians; nobody was really thinking of tax as a policy lever in its own right.
But taxes are a policy lever as well as a fundraising tool, and Scottish politicians eventually realised that. But because this has not been built into the structure of devolved institutions, Scottish politicians now have to seek specific amendments to the Scotland Act (essentially the Scottish constitution) every time they want to make more specific changes to tax policy. Currently active ‘tax amendments’ in the Scotland Act include provisions to introduce a ‘tax charged on disposals to landfill’ or a ‘tax on wild fisheries’—absurdly specific provisions to have to spell out by name in a fundamental constitutional document.
These amendments have to be approved by the UK Government. This produces a particular set of incentives: the UK Government won’t often object if the Scottish Government wants to raise taxes in Scotland, since this doesn’t affect public finances; but it will jealously protect its tax revenue if the Scottish Government ever asks for permission to cut taxes. And so, the Scottish Government typically doesn’t ask—more than that, the possibility doesn’t really cross policymakers’ minds. There is no serious consideration in Scottish civil society of the possibility of cutting taxes on whisky from Edinburgh; the focus of discussions (and lobbying efforts) about alcohol taxes is centred around London, with decisions made at a distance from the distilleries they affect. It’s a far cry from Lockhart’s vision.
But taxation is only one aspect of public policy that affects whisky. What about wider regulations on the drink—who has control over those?
Frankly, the answer to this question requires dealing with some absurdly obscure constitutional questions. Whisky used to be regulated by the 1988 Scotch Whisky Act, a very well-designed piece of legislation that should have been handed over to the Scottish Parliament when it was created. But then, the UK Government repealed the 1988 Act and replaced it with the 2009 Scotch Whisky Regulations, which are now under the jurisdiction of—I don’t know?
Normally, the UK and Scottish Governments are not allowed to repeal an Act of Parliament without another Act of Parliament. In this case, though, the UK Government invoked a power under the European Communities Act (‘ECA’) to repeal the Scotch Whisky Act by stroke-of-the-pen regulation. There are a whole load of things that I do not understand about this:
Why was the UK Government allowed to do this in the first place? This ECA power was supposed to be used by the Government to make changes that the EU demanded (hence the name of the Act). But the relevant EU regulations on whisky4 certainly do not seem to have been incompatible with the Scotch Whisky Act, so I don’t know how the power could have been used in this case to repeal the Act. And even if the UK Government were allowed to repeal the Act, I certainly don’t know why they were allowed to introduce a whole new set of rules not demanded by the EU without an additional Act of Parliament.
Did the use of the ECA take whisky rules out of Scottish hands? Food and drink regulations are usually entirely within the scope of Scottish Parliament powers. But EU-related matters are unambiguously outside the scope of those powers: the jargon is that Europe and foreign affairs are ‘reserved’ matters. If whisky regulations were made using reserved powers, does that mean that the Scottish Parliament can’t change them? Or does the fact that food and drink is devolved mean that the Scottish Parliament can change it?
What changes after the UK left the EU, and (in doing so) repealed the ECA? Obviously, not all rules made when Britain was in the EU were immediately repealed once it left. But the status of those rules is often unclear, and different rules are treated differently. Does this affect the jurisdictional question and the status of the Scotch Whisky Regulations?
Why has nobody else asked these questions?5 Well, the dominant industry lobbying body, the SWA, liked the new regulations, which they helped write and which gave them unprecedented legal powers. And the Scottish Government, even thought it was run by a nationalist party in 2009, was nonetheless lobbied to support the regulations by Scotch producers. With lobbyists and nationalist politicians falling into line, there was nobody to kick up a fuss and ask difficult questions. My view is that the Scottish Parliament probably cannot rework the fundamental regulations on whisky? It’s so unclear, though; maybe it can!
As a result of this uncertainty, Scottish politicians have basically just assumed they cannot cut back on or rewrite these regulations. But they are fully aware that they have the power to add additional regulations on top. And this is exactly what they have done, introducing price floors on alcoholic drinks and proposing strict limits on advertising by distillers and blenders.
In short, policy responsibility for Scotch whisky is split between Holyrood and Westminster, and not in any principled or coherent way, but in a mishmash defined by constitutional uncertainty and unexpected consequences. How's that for Caledonian antisyzygy, eh?
This incoherent split is aesthetically offensive to political rationalists who like state rationalisation and uniformity, as well as the national sentiment that wants Scotland to be operationally independent, left to make its own decisions about Scottish affairs. But even ignoring political aesthetics, there are also serious practical consequences and coordination problems created by the current situation. When it comes to whisky, rewriting regulation or reducing taxes demand coordinated action: the UK Government must take action and the Scottish Government must choose not to rush in to ‘fill the gap’ that is created. But additional regulation can be added unilaterally by either government. Additional taxes can also be imposed unilaterally from Westminster; and, while not yet within Scottish Parliament powers, they could plausibly also be ‘devolved’.6 This coordination problem makes some outcomes (namely, high tax and regulation favourable to industry monopolists) much more likely than others, not as a result of democratic political decisions, but just by the weight of procedure. And this creates serious opportunities for rent-seeking, which (at least when it comes to regulation—tax is more complicated) the SWA takes full advantage of.
This is a far cry from the simple set-up envisaged by Lockhart and many other advocates for devolution, dreaming of Scots left to manage their own affairs—including their national drink—so long as the effects of Scottish decisions don’t spill over the border. In reality, the question of who decides the rules governing a product produced entirely within Scotland (by definition! it is called Scotch whisky!) is a matter of complex intergovernmental coordination problems governed by difficult and knotty problems in constitutional law.
In this, Scotch whisky is not alone: it is in the same boat as ‘a’ thing else ca’d Scottish nooadays’. Jurisdictional issues are not clear-cut, but subject to cross-government disputes, political vetoes, and judicial decisions. Opportunities for rent-seeking are, as a result, rife. And these problems do not just arise in hypothetical or extreme cases: lobbyists and campaigners engage in absurd levels of venue-shopping, so jurisdictional questions arise constantly.
If the current constitutional settlement were stable and sustainable, these questions would have clear answers, venue-shopping and rent-seeking would have limited success, and journalists and policymakers could largely ignore the constitution. But the situation we have is almost the exact opposite. A working knowledge of the technical ins and outs of the constitution is an absolute necessity to get by to any degree in Scottish politics nowadays, unless you are happy to base your judgments solely on prejudice. (Which, to be fair, many people are.)
Legal academic–cum–nationalist political commentator Andrew Tickell put it very well, I think:
Now, I am not a Scottish nationalist. I think an independent Scotland would face much worse political challenges that those it currently faces, as well as a whole host of additional economic and social challenges. But many sophisticated unionists (and some unsophisticated unionists) are increasingly agreeing with the nationalists that the Scotland Act is not fit for purpose as it stands. Unionism’s most effective argument has always been that voters should ignore the abstract constitutional demands of nationalism, because they are (at best) irrelevant to or (at worst) harmful for voters’ concrete priorities when it comes to bread-and-butter issues like the economy, healthcare, and education. But this tactic fails if voters can’t just ignore constitutional issues, because they are constantly at play in the same everyday political process that decides all other issues.
The salience of the constitution has decreased in recent years from its post-2014 fever pitch, thanks to the defeat of the Scottish Government’s plans for a second independence referendum and the downfall of major figures in the SNP (leading to a collapse in party unity). But I’m not alone in thinking that this trajectory cannot be taken for granted in the long run. How could it? Unintended consequences of the Scotland Act almost guarantee that fundamental constitutional questions can be raised about ordinary, everyday policy areas—like the regulation of whisky.
Ultimately, no matter how much I care about it, whisky taxation and regulation is very far from the most important policy area in Scotland where these constitutional problems arise. But it’s worth particular attention for two reasons. Firstly, whisky is a very good representative of how these problems work. But just as important (if not more so), whisky is bound up in the romantic idea of Scotland that still has a lot of power in Scottish nationalist circles, no matter how much it’s officially repudiated. As Lockhart digressed into constitutional matters, he warned rather hyperbolically of what might happen if the political future of whisky was not fully devolved to Scotland:
Let the Scottish people therefore raise their voices. Indeed they will be committing suicide if they remain silent, for the choice to-day is between national revival and a continuation of the anaemic apathy which has already sapped the nation of much of its best blood… [p. 171.]
In this passage, Lockhart again echoes MacDiarmid’s estimation of Scottish society under the union, ‘a’ destitute o’ speerit’.
I don’t think Scotland has been ‘sapped of its best blood’, and (frankly) I don’t think Scotch whisky has been either. You couldn’t buy a bottle of Ardnamurchan single malt before 2017, which for me is proof enough that the industry has the potential today and into the future to be as healthy as—indeed, healthier than—it was in its romanticised past.
But so long as whisky remains bound up with the constitution, we can be sure that pessimistic nationalism will retain a foothold in Scottish political thought. The constitutional politics of the future will be the same as the constitutional politics of the past; and by our inaction, we will have brought the reality of Scottish politics into line with the Drunk Man’s vision:
They canna learn, sae canna move,
But stick for aye to their auld groove
—The only race in History who’veBidden in the same category
Frae stert to present o’ their story,
And deem their ignorance their glory.
As the Scottish drink is my focus, I will use the spelling ‘whisky’ rather than ‘whiskey’ throughout.
If you need it, a very literal-minded, unpoetic, one-to-one gloss into standard English might be:
Besides, the stuff’s not the real McCoy.
The sun itself once, as soon as you began it,
Rose in your very soul: but what looks in
Now is in truth the vilest ‘sixpenny planet.’And as the worth’s gone down the cost has risen.
One cannot warm the cockles of one’s heart
Without having cold feet now, wondering what
The wife’ll say (I don’t blame her for it).It’s robbing Peter to pay Paul at least…
And all that’s Scotch about it is the name,
Like everything else called Scottish nowadays
—All destitute of spirit just the same.
This last sentence—not in itself so much as in the fact that it was so casually written, seen as too obvious to be worth dwelling on, in a not-explicitly-political book even before 1979 (never mind 1997)—is proof enough against the idea that it was devolution itself that created the political basis for Scottish nationalism and the demand for further devolution. That’s an ahistorical, neo-Thatcherite nonsense.
That’s Regulation (EC) No 110/2008, if you care.
As far as I can tell—if you have asked these questions before and know the answers, please please please get in touch!
Although the industry would likely lobby the UK Government hard asking them to refuse any request to amend the Scotland Act to allow alcohol taxes to be increased, which slightly complicates my story.