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Last Updated: Thursday, 18 March, 2004, 15:41 GMT
McConnell stays out of whisky row
Whisky bottling plant
Producers say bottling plants would need significant investment
First Minister Jack McConnell has rejected an SNP demand that he campaign against anti-fraud measures being brought in by the Chancellor.

The Nationalists said he should lead resistance to what they called a "hammer blow" to the whisky industry.

The government plans to force producers to attach a tax stamp to every bottle to prove that duty has been paid.

But the industry has warned that the move will significantly increase costs, without being effective against fraud.

The SNP leader John Swinney told Holyrood the decision had been described by the industry as a "catastrophe".

The whisky industry... regardless of what steps are taken to reduce tax fraud, needs to be promoted by this parliament and not involved in some sort of guerrilla action against the government
Jack McConnell
First Minister
He asked: "Will the first minister lead a national campaign to reverse this hammer blow to this flagship industry?"

Mr McConnell agreed that the industry had been disappointed by the Chancellor's decision to press ahead with the tax stamps.

"We continue to have discussions with the Treasury, and have assurances from them that in the implementation of the new scheme they will amend the original proposals to make the implementation easier for the industry," he said.

But he told parliament that the sort of campaign being sought by the Nationalists would be counter-productive.

Mr McConnell said: "I think it would be very dangerous for us in Scotland to lead any kind of campaign, nationally or internationally, that sought to run down the image of the whisky industry which is strong today and will remain strong and which, regardless of what steps are taken to reduce tax fraud, needs to be promoted by this parliament and not involved in some sort of guerrilla action against the government."

'Surprising reaction'

A spokesman for the Scotch Whisky Association said: "By his words... the first minister has shown a lack of concern for jobs in Scotland.

"Tax stamps will harm the Scotch whisky industry and puts the future of jobs and companies at risk.

"This is a surprising reaction given that enterprise and growth of the economy is supposed to the top priority of the Scottish Executive."




SEE ALSO:
Distillers' anger over tax plan
17 Mar 04  |  Scotland
Measures aim to beat whisky fraud
03 Mar 04  |  Scotland
Brown vows whisky duty action
11 Dec 03  |  Scotland


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