SCOTCH whisky producers are calling on the Scottish Government to use taxation ”with caution” and invest in infrastructure and connectivity to keep the economy competitive.

“The current slowdown in Scottish economic indicators is troubling,” said Scotch Whisky Association chief executive David Frost at the industry body’s annual members’ day event in Edinburgh.

“To get growth to resume, I call on the Scottish Government to set an explicit policy goal that Scotland should be at least as competitive as the rest of the UK – and ideally more so – and to use its new devolved powers with this in mind.”

Mr Frost said taxation was only one of many economic levers and added: “It needs to be used with caution. If the overall burden on business or individuals is higher in Scotland, or people think that taxes will only go up in the long run, that will inevitably affect decision-making. So other elements of the Scottish policy mix will have to compensate if Scotland is to be kept attractive.”

Key among these must be solving Scotland’s infrastructure problem.

“Scotland’s roads, rail, broadband and mobile signals are still relatively poor,” Mr Frost said. “Ferry connections to Islay, for example, can struggle to meet the demands of local residents and business. Britain famously has a productivity problem. Part of the reason is surely that people in our industry spend too much of their time grappling with slow broadband connections, unresponsive utilities, or simply sitting on trains or behind coaches on the A9 when they could be improving production or reducing costs. That needs to get better.”

Mr Frost said the Scotch whisky industry was ready to work with both the Scottish and UK governments, having successfully partnered on export, skills and environmental projects.

The ongoing debate about the social consequences of alcohol was the industry’s biggest long-term challenge, Mr Frost said, adding that industry was already working with the Scottish government in dealing with harmful drinking.

Although 2015 was a challenging year, with continued slowing in global trade, Scotch whisky exports fell by only 2 per cent, he said, adding: “That is a pretty impressive performance.”

Scotch whisky contributes around £5 billion a year to the UK economy and supports more than 40,000 jobs. Nearly 200 industry representatives attended the SWA members’ day at Edinburgh's Sheraton Hotel yesterday.