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Whisky Industry

Volume 572: debated on Wednesday 18 December 2013

1. What discussions he has had with the Chancellor of the Exchequer on the employment interests of workers in the whisky industry in Scotland. (901633)

I have regular discussions with the Chancellor about a wide range of issues, and I can assure the hon. Lady that the whisky industry in Scotland and its employees are a key priority. My Department has long-standing contact with the Scotch Whisky Association, which aids our understanding of the industry.

Scotch whisky is exported to about 200 countries, and the industry directly employs 10,000 people in Scotland. According to a recent White Paper from the Scottish Government, there will be about 90 Scotch whisky embassies if the Scottish Government have their way after independence. Does the Secretary of State agree that trade agreements brokered by a strong and extensive United Kingdom diplomatic and international trade infrastructure are integral to the success of Scotch whisky exports? I—

The right hon. Lady is absolutely right. Given that 90% of the product of the Scotch whisky industry is for the export market, it is of supreme importance that Scotland has the best possible access to that market, and we have that facility through the network of some 270 embassies throughout the world and through United Kingdom Trade & Investment. That is what matters, and that is why the Scotch whisky industry makes such good use of it.

The Scotch whisky industry provides many jobs in my constituency, but I feel that it is very unfair that whisky is taxed at a higher rate per unit of alcohol than beers and wines. Will the Government look again at alcohol taxation with a view to creating a level playing field?

I may be wrong, and if I am I apologise, but I do not think my hon. Friend is right about the relative taxation of whisky and other alcoholic drinks. [Interruption.] I have now been informed that beer duty is 37% and whisky duty is 42%, but in any event it is wrong to play off one part of Scotland’s highly successful food and drinks industry against another. I am sure that the Chancellor will continue to listen to representations from the Scotch whisky industry, which my hon. Friend and I have made jointly over the years.

I declare an interest, as secretary of the all-party parliamentary scotch whisky and spirits group. Nearly every week the group receives representations about the whole question of the duty escalator and the unfair treatment of the spirits industry in relation to the beer industry. The Chancellor gave so much to the beer industry in his most recent Budget. What representations has the Secretary of State made to the Chancellor with the aim of overcoming the problem?

I will continue to make representations on behalf of the whole food and drink industry in Scotland, in which the hon. Gentleman and his all-party group play an important part. I have joined the hon. Gentleman on many occasions over the years as part of such delegations, and I will continue to give him as much support as I can.

Does the Secretary of State not accept that 80% of the price of a bottle of Scotch whisky is duty, which is paid to the United Kingdom Treasury? Duty discrimination by the UK Government is widening the gap between the price of whisky and the price of other beverages. How does that help the industry and employees?

The point to which the hon. Gentleman should respond—although I suspect that he will not—is that the Scotch whisky industry does very well as part of the United Kingdom industry, taking full advantage of the string of embassies and UKTI offices that we have throughout the world, and his policy of independence puts that at risk.

In opposition, the right hon. Gentleman and I, along with others, lobbied the Treasury to end tax discrimination. In fact, the right hon. Gentleman himself tabled an amendment for that purpose, supported by Liberal Democrat Members and the Scottish National party. Since becoming Secretary of State for Scotland, he has taken the Tory shilling, he is letting the industry down, and he is supporting a discriminatory duty. When will he stand up and be Scotland’s man in the Cabinet, rather than the Tories’ man in Scotland?

I do hope that that sounded better when the hon. Gentleman rehearsed it in the mirror earlier this morning, because it sounded pretty poor just now. There is no escaping the fundamental truth that his policy would be the ruination of the Scotch whisky industry, for no good reason.