We come now to the next urgent question. At the risk of embarrassing him, the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) tells me that this is the first time he has asked a question from the Back Benches in 14 years, but I am sure it will not show.
(Urgent Question): I know that you always indulge a novice in these proceedings, Mr Speaker.
To ask the Secretary of State for International Trade to make a statement on what discussions Her Majesty’s Government have had with the US and EU, following the announcement by the United States trade representative of their intention to impose tariffs of 25% on single malt Scotch whisky and other UK products on 18 October.
Thank you, Mr Speaker. I am grateful to my right hon. Friend for his question.
The United Kingdom continues to be a champion of the international rules-based order of which the World Trade Organisation is the cornerstone. However, the United Kingdom is clear that resorting to tariffs is in no one’s interests. Low tariffs and free trade underpin prosperity and jobs in the UK and globally, which is why we are pursuing an ambitious free trade agenda, lowering tariffs and quotas where possible and working on an ambitious package of bilateral free trade agreements.
The Government are disappointed by the United States Administration’s announcement that they intend to impose tariffs on the UK and our European partners following the most recent ruling. My right hon. Friend asks what communications there have been between the Government and the United States. We have continued to raise this issue at the highest levels; my right hon. Friend the Secretary of State has spoken to US Trade Representative Lighthizer, Commerce Secretary Ross and Vice-President Pence; my right hon. Friend the Chancellor has raised the issue of Airbus tariffs with the US Secretary of the Treasury; and the issue was raised by my right hon. Friend the Member for Maidenhead (Mrs May) with President Trump during his state visit to the United Kingdom in June this year.
The dispute has a long history; indeed, it goes back to 2004. I will not detain the House by setting out that history, but it is long and complex and has led to the WTO judgment. Although the UK, France, Germany and Spain took steps to bring their support into compliance with the WTO, the WTO ruled last year that further steps were required to bring that support fully into compliance. Following that ruling, the UK and other Airbus nations have now taken steps to bring their support fully into line. The Airbus nations are seeking confirmation from the WTO in the ongoing proceedings that those steps are sufficient to achieve compliance. A ruling is expected in the coming months.
However, WTO procedure allows for the US to seek authorisation to retaliate against the EU in parallel to the ongoing proceedings and before the WTO has confirmed whether the Airbus nations have now complied with their WTO obligations. On 2 October, the WTO announced that the US can be authorised to impose up to approximately $7.5 billion in tariffs annually. Following that, the US published a list of tariffs on the EU, targeting products produced by the Airbus nations and the wider EU. These measures are not in the interests of the UK, the European Union or the United States. Tariffs will only inflict damage on businesses and citizens on both sides of the Atlantic and harm global trade and the broader aviation industry at a sensitive time.
We are working closely with the US, the EU and our European partners to support a negotiated settlement to the Airbus dispute, along with the separate Boeing disputes. I reassure the House that we will continue to press the issue at the highest levels and urge the United States to withhold tariffs until the WTO has confirmed that we have complied in the compliance proceedings—something that we expect to happen within the next couple of months.
Single malt Scotch whisky has been tariff free with the United States for more than 25 years now, and whisky exports to the US are worth more than £1 billion annually. Single malt producers are often small and medium-sized companies, and the tariffs will hit those who can afford them least. We will continue to talk to the US at the highest levels to press for a settlement and for the US to hold off from applying the tariffs until we have had time for a ruling.
I welcome the Minister to the Dispatch Box and thank him for his answer. I welcome the fact that this urgent question was chosen to be discussed, because the matter is urgent. There are 10 days left until the US proposes to introduce tariffs of 25% on Scotch malt whisky, which represents 60% of the UK-origin goods included on the list and 10% of the non-aviation goods from across Europe that are on the list. Curiously, products such as brandy and cognac from France are not included on the list.
As the Minister said, the US market is vital for the Scotch whisky industry, with a turnover of more than £1 billion. The distilleries involved in exporting malt to the United States are often small. They are often craft distilleries, whose establishment in recent years we particularly welcomed in Scotland. If tariffs are imposed, those industries will have to scale back their efforts in the United States. The industry estimates that there could be a loss of £228 million in revenue, and that 3,000 jobs, mainly in rural Scotland, could be affected by the proposals.
I want the Government to show even more urgency than they have done to date. There are two things that can be done immediately. First, the industry has made it clear that if the Government announces that when the UK leaves the EU on 31 October this year that it will not impose tariffs on bourbon or American whiskies that would greatly help the dialogue with the United States.
Secondly, I know that the Minister has the close ear of the Prime Minister, and it is important that he urge him to intervene directly with President Trump. It was my duty to welcome President Trump to Scotland last year. During that event, he told me that he loved Scotland. If the Prime Minister could convey directly to President Trump the damage that the proposals would do to Scotland, particularly rural Scotland, that could have an impact. I would be pleased if the Minister confirmed that he would indeed urge the Prime Minister to make those representations.
I am grateful to my right hon. Friend for those questions. He represents a powerful voice on behalf of the industry and the people of Scotland, along with my hon. Friends around him. It is not just whisky—but I will return to whisky in a second—it is pork, cheese and cashmere. There are a number of areas that will be harmed by the tariffs. Earlier this afternoon, I spoke to Karen Betts, chief executive of the Scottish Whisky Association, who is in South Africa. It is a measure of her concern that she took time out of her schedule to talk to me. The Government are enormously sympathetic, and as I said in my answer, we would urge the United States—tariffs are not in place, and there are 10 days before they are introduced, as my right hon. Friend said—to think again. These tariffs are in no one’s interest. The President of the United States prides himself on being the champion of the little guy, the little business. Well, it is the little business and the little guy who will be harmed most directly if the tariffs come into play.
I can entirely understand my right hon. Friend urging the Government to adjust section 232 countermeasures by removing the tariff on bourbon. We believe in the international rules-based order. It would be the easiest thing in the world simply to say to him, “Yes, we are going to do that.” However, while we remain a member of the European Union, we have to comply with the rules of the European Union. What I would say to him is that when we leave the European Union, nothing is off the table.
I welcome the urgent question asked by the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell). I welcome, too, the measured tone of the Minister’s response, the factual information that he provided at the Dispatch Box and his support for the international rules-based order.
It is no secret that the American President has sought to define his Administration as one of trade warfare, seeking to put the interests of America first and to repatriate jobs and industry to the USA. He believes that a trade war is one that the US can win. Does the Minister agree that no one wins in a trade war? That much is clear from the spurious Boeing case against the importation of C Series aircraft and the use of section 232 national security measures to prevent steel and aluminium exports to the US, and now again in respect of automotive imports.
The concern for British exporters is that the recent findings of the WTO in relation to aircraft subsidies will be used to secure an advantage for American producers and for American interests in any future trade agreement between our nations. The US trade representative has been clear that the US will impose countermeasures in the first instance and will seek to discuss how to resolve this dispute with the EU thereafter
“in a way that will benefit American workers”.
Other European leaders have been clear in their condemnation of the measures, but our Government have been decidedly more reserved, perhaps for fear of jeopardising any future trade talks. I note in the Government’s response published last week that the UK was seeking clarification from the WTO that the UK was compliant with measures regarding subsidies to Airbus, so I ask the Minister when he expects that such confirmation will be given and whether this indicates a divergence from the EU response.
Many products that these tariffs are being imposed on are subject to geographical indications, which are awarded under trade agreements to protect products of cultural heritage. It is no surprise that these products have been targeted first, as American producers of rival products have made no secret of their desire to destroy such protections. Does the Minister agree that this is not just about responding to the subsidies ruling, but about undermining and eliminating competition in favour of US producers who have long sought to do away with product labelling requirements, restrictive geographical indicators, and even sanitary and phytosanitary standards? Does he agree that going after some of our most iconic products is part of that strategy?
The Scotch whisky exports from this country amount to £6 billion a year—21% of all our food and drink exports, and 41 bottles a second. That is faster than I can drink it! Scotch whisky is so important to our exports. In fact, I think it is our third largest export, so the Government need to do all they can to protect it. These measures come at a time when the UK Prime Minister still insists that we could have a no-deal Brexit in a matter of days—a scenario under which substantial tariffs could be imposed on our exports to the EU. That would be a double whammy for British producers.
The impact of these tariffs on our biggest markets would be enormous, particularly for products such as Scotch whisky. No amount of new trade agreements overseas could mitigate that imminent threat. The EU is understood to be exploring what position to take in respect of these new tariffs. What role will the Minister’s officials be taking in those discussions, given our pending withdrawal?
I am grateful to the shadow Secretary of State for his support; I think this is a relatively rare but very welcome moment where there will be an outbreak of consensus across the House.
The hon. Gentleman is absolutely right to highlight the importance of the Scotch whisky industry to the UK. Whisky is the UK’s biggest single agrifood export, accounting for more than 21% of all UK food and drink exports. In 2018, exports of all whisky from the UK totalled £4.8 billion, of which the Scotch Whisky Association claims £4.7 billion is Scotch whisky. Scotch whisky is the biggest single contributor to the UK balance of trade in goods, and the largest single market for UK exports of all whisky—not just Scotch whisky—by value is the United States, which imported more than £1 billion-worth in 2018 or a volume of 84,791 tonnes.
Beyond that, a further £268 million is injected into the economy through the supply chain, leading to a UK-wide impact of just under £5 billion. Some 40,000 jobs are directly supported by the Scotch whisky industry, 7,000 of which are in rural areas of Scotland. This is an absolutely vital sector to the United Kingdom and one that we are determined to do everything we can to protect.
The shadow Secretary of State will have heard me say to Mr Speaker earlier that the dispute that has led to these threatened tariffs in 10 days’ time is a very long and complex one and is being governed by the investigations at the WTO. It is regrettable, although we accept it, that we were found not to be in compliance and the WTO has given the United States permission to go down this route.
The hon. Gentleman asked me about our belief that we are now completely compliant and have taken the remedial measures necessary to bring ourselves into compliance in this dispute. We hope that that will happen within the next couple of months. We are pressing the WTO for an early decision on that, because the evidence base on this stuff is incredibly important, particularly in our conversations with the United States.
I am anxious this afternoon to dial down the atmosphere and not engage in deep personal attacks on people in other countries. The hon. Gentleman was very restrained, and rightly so, in what he said. We want to keep it on the issues. We think that the proposed tariff is unfair, wrong and unjust, and if we can demonstrate that we are now in compliance in this very long-running dispute and have taken the necessary measures, I hope that we can engage calmly with the United States.
I hope the hon. Gentleman will agree that one of the reasons why the United Kingdom is so internationally necessary, and why our taking up our position again in the WTO when we leave the EU is a good thing and is widely welcomed internationally, is that we believe in the international rules-based order. We believe that any fair, reasoned, rational observer who looks at this will conclude that these tariffs are unjust, unfair and wrong and are targeting people who have done absolutely nothing in terms of the dispute that has given birth to these retaliatory measures. I hope that, with constructive engagement and calm dialogue, we may persuade the United States to think again.
Mr Speaker, as you know from my application for an urgent question on this subject today, my constituency is severely affected by the announcements from the US last week. Moray is home to 40% of all Scotch whisky distilleries, as well as a sector that has not been mentioned so far: the biscuit industry. Some 50% of biscuits exported to the US are Scottish shortbread. Moray is home to Walkers of Aberlour, and when I spoke to Jim Walker earlier this afternoon, he wanted me to stress that figure. I met Lewis Maclean of Maclean’s Highland bakery in Forres on Friday, who expressed his concerns for his sector as well.
Can the Minister update the House on what steps the Government will take over the next 10 days to try to stop these tariffs taking effect from 18 October, which feeds into the important Christmas market? I also reiterate the point that a zero tariff on bourbon and American whiskey when we leave the European Union would send the strongest possible message to the US that the UK is on its side, and it should take away these tariffs?
I am grateful to my hon. Friend, who is a doughty champion for his constituents and the commercial interests in his constituency. I was aware of the presence of Walkers Shortbread in his constituency and the fact that it exports more than £29 million a year and is a significant local employer. Before coming to the House, I asked for a list of all Members who represent Scottish constituencies and how many distilleries they have in their constituency. I was more than surprised to find that my hon. Friend has a significant number—I think more than 40—in his constituency, which makes the following offer very easy to make: I would be delighted to visit him in his constituency and see some of those distilleries, and perhaps also Walkers Shortbread.
As for what we can do to get this message across, the United States ambassador to the UK, Ambassador Johnson, is known to many of us, and he is known to be very close to President Trump. I encourage all Members across the House to contact the American ambassador and make him aware of the strength of feeling on this subject in this House and across the country.
As the Minister will find out, it is quality rather than quantity that counts when it comes to Scotch whisky. As the chair of the all-party parliamentary group on Scotch whisky, I have no doubt that these tariffs will have a hugely negative impact on one of our most important, successful and growing industries. The Scotch whisky industry employs 11,000 people directly. I encourage UK Ministers to do everything they can to resolve this as quickly as possible, because it is in no one’s interests to have a trade war like this, where everybody will almost inevitably end up on the losing side and jobs, confidence and future investment will be affected. I fear that these tariffs will disproportionately impact on the small independent distilleries, of which there are many in my Argyll and Bute constituency and, indeed, across the economically fragile, rural parts of Scotland.
The Minister listed a number of conversations that have been had, but I would like him to clarify what conversations have taken place since Thursday with both the EU and the United States? Is it not the case that a post-Brexit, isolated UK would have much less negotiating power than it currently has as part of one of the world’s largest trade blocs when it comes to fending off someone like Donald Trump?
I am going to resist the temptation to launch on the last point. I would rather try to keep a degree of consensus on the issue, tempting as it is, but I would say this to the hon. Gentleman. He opened by saying that it is quality, not quantity, that counts. I think that has been the cry of many down the generations. A trade war would be in no one’s interests: there will be no winners in a trade war. The thing that I think agitates and upsets us most about this, as I said earlier, is that those who have done absolutely nothing in the Airbus-Boeing dispute, with the rights and wrongs on both sides, and people who have had absolutely nothing to do with that, going back so many years, will now be hurt and harmed if these tariffs come into play. We will continue to use every opportunity to convey to our friends in the United States that this is—
I am not sure that it is helpful to have a running commentary on everything that is being said. I think those who are employed in distilleries in the hon. Gentleman’s constituency would be much more interested in what the Government are trying to do to get a successful outcome. I have told the hon. Gentleman and the House the exchanges and the conversations there have been, and those will continue. We are determined to use the next 10 days to try to persuade our friends in the United States that this is the wrong way to go.
The decision by the US affects other iconic Scottish industries, such as cashmere and textiles. We have a long tradition in my constituency in the borders, and both Hawico and Johnstons in Hawick have been in touch with me in recent days, expressing severe concerns about the impact that these tariffs are going to have on their American business. Can the Minister assure me that textiles and cashmere are on his radar, and that he will be trying to find a solution for those sectors too? If no solution can be found by 18 October, will the Government consider compensating those businesses for the duties and tariffs they are going to have to pay out?
I am very grateful to my hon. Friend, and I am happy to reassure him by reiterating the comments I made to our right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) about cashmere and other product lines. This is not confined to Scotch whisky, although Scotch whisky will obviously dominate the coverage of this because it is such an iconic Scottish, and indeed British, brand. It is known everywhere, and only two days ago in Vietnam we were having conversations about the labelling of imports of Scotch whisky through third countries and how that was leading to an increase in illicit sales of Scotch whisky products. Diageo has been very vigorous in lobbying the Government on that and other related issues. We are absolutely determined to support this sector, and indeed the other sectors that my hon. Friend quite rightly highlighted.
Knitwear is something that defines Shetland in the eyes of many across the world. Just in the last week, we have seen visitors coming to the isles from right around the globe as part of an enormously successful Shetland Wool Week—especially coming from the United States of America. Does the Minister understand that the damage that will be caused by tariffs of this sort is not just about manufacturing and exports, but about tourism? The communities that rely on our defining products, such as Scotch whisky and knitwear, are some of the smallest and most economically fragile to be found anywhere, and jobs that are lost there will not be easily replaced.
I could not agree more with the right hon. Gentleman. Knitwear from his part of Scotland is a small but very well-known British-Scottish-UK brand. He is absolutely correct to suggest that if the tariffs did come in and those sole traders, partnerships or companies with two or three people working together folded, it would be unlikely that they would come back. They are a very precious part of our heritage and this microeconomy would be lost, which is why we will do everything we can to persuade the US to think again.
As you know, Mr Speaker, not all whisky is Scotch. I happen to have with me a bottle of Filey Bay, Yorkshire’s first whisky. It was released on Saturday after the requisite three years and a day. It is from the Spirit of Yorkshire distillery in Hunmanby in my constituency. Will the Minister confirm that he will provide support for whisky producers wherever they are, whether from the great nation of Scotland or God’s own county of Yorkshire?
I am very grateful to my hon. Friend. Sparking a debate on what constitutes whisky is something I would not wish to do on my first outing at the Dispatch Box, Mr Speaker. I see some friends from Northern Ireland, although I am sure it has never touched the lips of the hon. Member for North Antrim (Ian Paisley). Coming from Northern Ireland as I do, I know that some very fine whiskey is made there. I make this undertaking to my hon. Friend the Member for Thirsk and Malton (Kevin Hollinrake): the Government will protect and promote whisky that is produced in all parts of the United Kingdom.
Bushmills is, of course, the only Irish whiskey made in the United Kingdom, and therefore the only British whiskey with an “e” in it, making it the most excellent whiskey in the whole of the United Kingdom. No doubt when the Minister was in his boyhood in Ballycastle he would have sampled the angel’s share of that product. Can he confirm the proportion of product sold by the Bushmills distillery that are blends with other whiskey products from the Republic of Ireland? Can he confirm that they will therefore be zero-rated for all future sales? Given that that will then create an unlevel playing field, will he ensure that the same advantage rests with single malt whiskey made in Bushmills?
As the hon. Gentleman knows, these tariffs relate to single malt whisky products. I can say to him that I have visited Bushmills many times and that I am a fan of Bushmills whiskey. The old inn at Bushmills is among the finest places to stay anywhere in the United Kingdom. His father and my grandfather shared something in common: they never drank at all. I did not follow my grandfather’s example. I am sure he followed his father’s.
As my right hon. Friend knows, we are determined to take full advantage of the opportunities of leaving the European Union. We believe, as a Government and as a party, that low tariffs, preferably no tariffs, are mutually beneficial to ourselves and to countries with whom we do business. Free trade creates jobs, prosperity and wealth. We have to continue to articulate that case, particularly to our friends in the United States who are normally free market in outlook and light touch in regulation, and who mirror our basic political philosophy. A trade war benefits nobody, not least those we are elected to serve.
Many years ago, Mr Speaker, when Mr Speaker Weatherill sat in your Chair, I was taking part in a filibuster and I mentioned Penderyn whisky at length. As a result, Mr Speaker Weatherill said that he would very much like to sample it, and I believe that he was sent several bottles. Earlier, the Minister asked me to return to the question of what will happen to Penderyn whisky—obviously, he wants to give me more information than he was able to during the previous urgent question. I repeat: Penderyn whisky is from a small distillery in my constituency on the edge of the Brecon Beacons. It is an important employer in an area of still high unemployment and it is very important that it is protected.
The right hon. Lady makes a very powerful case. As I have said a number of times at this Dispatch Box in answer to several hon. and right hon. Members, we believe that it is terribly unfair that the small producer will be caught in the crossfire of a dispute in which they had no part and no part in making. I am very happy to meet her to talk particularly about her local employer and hear its local arguments, and she must feel under absolutely no obligation to come to that meeting with any whisky from her local producer.
I welcome the Minister’s commitment to trying to protect the industries that could be affected if these tariffs come into place. I also welcome the UK Government’s commitment—specifically, when there are an additional 12 Scottish Conservative MPs—on support for the spirits industry across Scotland and in Angus. I ask him for reassurances that in an upcoming Budget, he will look carefully at the spirits industry as a whole and other industries that would be affected were these tariffs to come into play on 18 October.
I congratulate my hon. Friend on yet another demonstration of what a powerful advocate she is for those who put their trust in her to serve as their Member of Parliament. I said earlier that the tweets of the President of the United States were slightly beyond my remit. I am afraid that the Chancellor’s next Budget falls into a similar but not distinct category, but I am sure that she will make that point very powerfully to our right hon. Friend, and that it will receive a warm welcome.
Airbus Industries will be heavily impacted by the decision last week. Has the Minister raised this issue with Airbus since Thursday, and has he raised with the United States ambassador the 275,000 jobs that are provided by Airbus in 40 states in America, as well as the thousands in my constituency and across the whole north-west?
I have not yet had the opportunity to raise this issue directly with Airbus, but I have put out a call to the American ambassador. As I hope the right hon. Gentleman will understand, the reason that I have not yet had the opportunity to talk directly to Airbus is that I returned to the UK only late last night after a visit last week to Vietnam. When I came into the office, I spoke to the chief executive of the Scotch Whisky Association and I reached out to our counterparts in Scotland and Wales. Such conversations will be happening urgently in the course of this week.
I welcome my hon. Friend’s respect for the rules-based international order, but does he share my concern that the US, under this President, has by contrast ridden roughshod over multilateral institutions and agreements? This President has made it abundantly clear that he views trade negotiations simply as a means of reducing US trade deficits, subverting the rules of the WTO whenever they get in his way.
I am very keen that we do not try to personalise this as a dispute between the United Kingdom and the person of the President of the United States. The relationship between the UK and the US is one between two great nations and two historic allies. It is the case that the United Kingdom continues to take strongly the view that we should uphold the international rules-based order. We see the WTO as a very important part of regulating and acting as a fair and impartial arbiter in international trade disputes. We have already said publicly that we do not think that the WTO is perfect and that we would welcome some reform—in particular, to increase the speed at which dispute resolution takes place. We will continue to engage with our counterparts in the United States, and we hope that we can persuade them that these are damaging measures that should not happen. There was chuntering when I said that I would continue to reach out during the course of this week—I mean by tomorrow, but I cannot guarantee that people will answer the phone.
Every bottle of Bowmore, Laphroaig, Ardmore, Glen Garioch and Auchentoshan malts are vatted, bottled and packaged by 200 skilled workers in Springburn in my constituency, so the impact of this could be devastating for that workforce. However, what was clear to me from a recent visit there was the symbiotic relationship between the Scotch whisky industry and the American bourbon industry, not least, brands such as Maker’s Mark and Jim Beam, because the casks are used to mature those Scotch whiskies. Will the Minister impress upon his counterparts in America that this is a mutually destructive measure by the American Government and that they ought to consider the impact that it will have on not just British industry, but American industry?
The hon. Gentleman, if I may say so—[Interruption.] I am sure that Scottish National party Members would like to listen to the reply, because the hon. Gentleman made an excellent point that I had not thought of before. I welcome what he said and I would be very interested in talking to him more about that because that could be a very fruitful line of discussion between ourselves and the United States. Perhaps we could have a conversation about that this week.
Will my hon. Friend advise me what steps the UK Government are taking to help to broker a negotiated settlement between the EU and the United States on what is essentially a long-standing issue regarding airplane manufacture between Boeing and Airbus, thus avoiding damaging tariffs for companies such as William Grant & Sons in Girvan, in close proximity to Trump Turnberry, and on cashmere produced by Begg & Co. of Ayr?
My hon. Friend asks an excellent question. I have articulated what we are trying to do: first, to persuade the United States not to act in the timeframe that they have set out; and secondly, to work with our friends and colleagues in the European Union to press the WTO to come to judgment on the Airbus/Boeing case and our compliance with the judgment as quickly as possible, so that we can move on from this and get back to proper free trade. In terms of the textile and whisky companies that my hon. Friend mentioned, we are acutely aware of that and they have our support.
As my hon. Friend the Member for North Antrim (Ian Paisley) outlined, Bushmills whiskey is defined internationally as Irish whiskey. Is the Minister aware that the Republic of Ireland seems to have negotiated an opt-out for its single malt Irish whiskey? Did he or the Department engage in renegotiations to try to get an opt-out for whiskies from the UK, and how does he intend to catch up with the Republic of Ireland on this issue?
We want to deal with the macro on this issue. These are very bad tariffs that we believe have no foundation. We believe that they are wrong and profoundly unhelpful, and we believe that they undermine the whole concept of free trade and will damage people who are producing and employing. I would rather go down the route of trying to persuade our American friends to abandon this entire series of tariff attacks and look at the issue calmly and reasonably based on the current facts, not ancient dispute, rather than seeking to try to get an opt-out in some way, which in a sense, would legitimise the underpinning of something that we consider to be wrong.
Whisky is an enormous employer in Ochil and South Perthshire, from Glenturret to Tullibardine to Diageo. They employ thousands of people across the constituency. What is my hon. Friend doing to limit the impact on the broader supply chain that will affect not only my constituency, but Scottish and northern English farmers? Will he join me and the rest of the Scottish Conservatives’ campaign for the Treasury to continue to freeze spirit duty in the next Budget to ensure that there is not a double hit for our producers in Scotland?
I congratulate and salute my colleagues representing Scottish constituencies. To weave into this, my debut performance at the Dispatch Box, the writing of the Chancellor’s Budget shows a degree of ingenuity I welcome. I will certainly make representations on behalf of my hon. Friends, who serve the people of Scotland so well, about what the Chancellor can do in his Budget to help protect this sector.
As my right hon. Friend the Member for Delyn (David Hanson) said, Airbus is a huge employer on both sides of the north Wales border, so when the Minister has his conversations will he emphasise that point and the point that the United States employs a significant number of people in the same industry?
I warmly welcome my good friend to the Dispatch Box—he is doing a great job—and if he wants to visit Aberdeen on his way up to Moray, he will be more than welcome. Can he give a commitment that in future trade talks with the US his Department will prioritise the export market for the great iconic Scottish whisky industry, and does he agree that as we leave the EU we have the opportunity to open up new and growing markets, such as India and Taiwan?
I entirely agree with my hon. Friend, who serves his constituents in Aberdeen so effectively. Absolutely, that will be the case when we start our discussions and negotiations with the United States. I chaired a trade discussion with the Taiwanese last week, before I went to Vietnam, and I was struck by how incredibly interested they were in growing the sector. Asia is a massive growth market for Scottish whisky. We are also determined to seek to remove some of the tariff and non-tariff barriers to other markets in the Asian region.
The Minister said he did not want to personalise this, but even with a small urban constituency I have a maturation warehouse, a bottling plant and three cooperages. If the UK has such a special relationship with the US, why does the Prime Minister not just pick up the phone to Donald Trump and tell him to drop these ridiculous tariffs?
I have no doubt that the Prime Minister, the next time he speaks to the President of the United States, will want to express his disappointment and concern at these measures and will urge the President to invite his Administration to think again. I say to all right hon. and hon. Members, however, that if our shared goal is not seeing these tariffs implemented in 10 days’ time, I am far from convinced that the best way of achieving that outcome is to personally attack the President of the United States.
It is not often I say this, but I completely agree with the hon. Member for Argyll and Bute (Brendan O'Hara): it is about quality, not quantity. I represent Scotland’s two finest distilleries, Royal Lochnagar and Fettercairn, and I think the Minister hit the nail on the head. My Scottish Conservative colleagues have mentioned the possible quid pro quo of removing the bourbon tariff in exchange for removing the 25% Scotch malt whisky tariff being imposed by President Trump. Can he confirm whether that suggestion has been made to the United States, and if it has, how did it go down?
I can confirm to yet another powerful advocate for the Scottish interest on the Conservative Benches that I am not aware that that has been put to the United States. As I said to my right hon. Friend the Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell), we are either a believer in the rules-based international order or we are not. We are still currently a member of the EU, and we have to comply with the rules of that institution as long as we are in it. I do not think that to do something unilaterally on bourbon at this time would be right. However, as I made clear to my right hon. Friend, when we have left the EU, if we have not resolved this, the Government do not take any option off the table.
The Glenkinchie distillery, in my constituency, has been around since 1837 and is the finest lowland distillery in Scotland. Can the Minister confirm that, if we were to leave the EU, the US tariffs would not automatically fall but would indeed continue? To quote the advice of a former President to a former Prime Minister during the banana trade wars, politicians in America do not seem to have a lot of control over this. Who is the Minister reaching out to in the US beyond the immediate politicians to secure a revocation of the tariffs, hopefully before they are imposed?
Ultimately, these are decisions for the United States Administration, which is why my right hon. Friend the Secretary of State has reached out to her counterpart, why the Chancellor has reached out to his, and why my right hon. Friend the Member for Maidenhead (Mrs May) raised these points when President Trump was here over the summer. As I said in answer to a previous question, I am sure my right hon. Friend the Prime Minister will want to make this point directly to the President the next time they speak. I say to all right hon. and hon. Members, however, that we are not bystanders in this process; we are participants, and everyone in the House has a perfect right—indeed, an obligation, if they have an interest in this—to make their views known to the United States ambassador in the United Kingdom, who will then be able to convey them back to his Administration at home.
As well as the many distillers across Scotland, including the two wonderful distilleries in my constituency, Macduff and Glenglassaugh, the news of these tariff proposals will concern the many thousands of people involved in the Scotch whisky supply chain, including the farmers in my constituency who produce the finest malting barley for the Scotch whisky sector. Can my hon. Friend assure me that the UK Government will safeguard the interests of barley growers and all those who may be indirectly affected by these tariffs, in addition to the distillers?
I pointed out in a previous answer—to the shadow Minister, I think—the degree of reliance on the Scots whisky sector within the supply chain. That supply chain adds enormous value to the UK economy, and hundreds if not thousands of jobs depend on it, so I am very happy to give my hon. Friend that undertaking.
I cannot boast any of the fine distilleries that other hon. Members have mentioned, but I do have a bottling plant with American connections and the global headquarters of Diageo, one of the world’s largest producers of spirits—indeed, the producer of the single biggest selling spirit in the world—and they will not be immune to this tariff. Does the Minister share our concern that this latest dispute with the United States simply illustrates the position we might be in if we leave the EU and depend entirely on the WTO—the very organisation that okayed these tariffs today?
We should be under no illusion: in this respect, the WTO was doing its job. We were found not to have abided by the rules. In a sense, the WTO is obliged to allow the sanctions. As I have said repeatedly, the great sadness—the great sense of unfairness and foul play—is that the people who will be targeted, some of whom could be destroyed commercially, if the tariffs are implemented in 10 days’ time had nothing to do with the dispute where we were found not to have done the right thing. The best way to guarantee free trade is proper bilateral free trade agreements between us and other countries, and that is why we want a comprehensive free trade agreement with the EU and a deal that allows us to leave in an orderly way on 31 October.
I congratulate my hon. Friend on his debut at the Dispatch Box. If he goes on like this, it will not be long before he is presenting the Budget, and he will have a chance to sip the devil’s buttermilk as he does so.
My hon. Friend is absolutely right to say that America is the largest market for Scotch whisky. What other levers can he pull to promote whisky in the emerging markets of Asia and further afield—for instance by using the efforts of the GREAT campaign? This is a real opportunity to push our whiskies into other markets.
Perhaps you should lead by example, Mr Speaker. Mr Speaker’s 10-year-old single malt sells for £29 a bottle, which is a remarkable increase on what it retailed for 10 years ago. Perhaps as your parting shot, Sir, you should immediately commission, as a gesture of confidence in the Scotch whisky business, a new bottle of Speaker Bercow’s brew?
I am incredibly grateful to my right hon. Friend. Indeed, having served as his Parliamentary Private Secretary from August 2010 for, I think, a couple of years, I now model myself on him, having watched his deft performances at the Dispatch Box from a position behind him.
My right hon. Friend is absolutely right about the growing interest in Scotch whisky around the world. As I have said, the Taiwanese market has been discussed several times in Vietnam in the last few days. I wonder whether my right hon. Friend might be on to something. Perhaps we should tie it to the GREAT campaign, and perhaps we should invite our new prime ministerial trade envoys in the beefed-up programme to make this a priority.
Scotch whisky is genuinely one of those international iconic brands. It is up there with Rolls-Royce, and all the other brands that are instinctively recognised as British. It is as well known as Buckingham Palace or, indeed, this very building, and it is integral to our promotion of ourselves as global Britain.
Although Stoke-on-Trent does not make Scotch whisky, Wade Ceramics makes the ceramic bottles in which whisky is sold all over the world. In a similar vein to the hon. Member for Ochil and South Perthshire (Luke Graham), may I impress on the Minister that the supply chain for this product may be deeply impacted, and may I ask what conversations he or the Government are having with the representatives of that supply chain to pass on in the negotiations, which I know they will welcome protecting their interests?
As this session evolves, I am becoming ever more impressed by the ingenuity of colleagues who want us to write Budgets and also to raise the position of other sectors. I mentioned the supply chain a couple of times earlier, and we talked about the ceramics sector during the urgent question on the day one tariffs policy. We absolutely recognise the importance of that, and I am always willing to meet the hon. Gentleman and other representatives of the sector to discuss what more the Government can do to support it.
My hon. Friend is absolutely right—we should not engage in personal attacks on the President, but is it not nevertheless a strategic concern for us that we are seeing an Administration who appear to have a remarkable proclivity for protectionism? Does that not underline the fact that we as a nation need to be a champion of free trade, and that as we negotiate our exit from the EU we will have to have practical powers and instruments at our disposal, so that we can be that champion of free trade in practice?
The answer to the second part of my hon. Friend’s question is yes, absolutely, we must remain a champion of free trade, and that we will do. The answer to the first part of his question is that we have to deal with the world as it is. The greatest strategic interest that we have—that the House has, that the Government have—is to try to persuade the United States not to implement these tariffs in 10 days’ time, and thereby to protect the Scotch whisky industry.
I must say that it is wonderful to hear a UK Government Minister recognise the enormous value that Scotch adds to the UK economy. I hope he will remember that next time his colleagues try to suggest that the Scottish economy is some kind of basket case.
The North British Distillery, which is in my constituency, is one of Scotland’s oldest and largest grain whisky producers, and is a very important employer in Edinburgh South West. While this tariff is of course aimed at single malts, it is a worrying indication of how the US Government may treat iconic Scottish food and drink products in any trade negotiation. As my hon. Friend the Member for Glasgow East (David Linden) suggested, if the Prime Minister’s alleged good offices with President Trump cannot resolve this problem, what hope is there for future trade negotiations outside the EU?
After—how long has it been?—quite a long time during which we have enjoyed such wonderful consensus, I fear that we have now entered the press release-writing section of this urgent question.
No Conservative Member would ever speak of the Scottish economy in such denigrating terms. It is, in fact, because of our respect for the people of Scotland and the Scottish economy that Government Members passionately believe in Scotland’s integral place as a part of the United Kingdom. It is we who passionately believe that we are better together, and it is we who passionately believe that the best interests of the Scottish people are served by membership of this United Kingdom. It is this Government, serving every part of the United Kingdom, who will do all that we can to protect that sector, and to protect whisky producers in every part of this country. But if the hon. and learned Lady, who has taken some time off from her court cases to come here today, genuinely believes that the best way of resolving this dispute is to attack and denigrate personally the President of the United States, I think that shows how naive she is.
Let me confirm to the Minister that no Scottish Conservative considers Scotland’s economy to be a basket case. What an insult that was from the hon. and learned Member for Edinburgh South West (Joanna Cherry). However, I am concerned about the single malt distillers in Stirling, namely Deanston and Glengoyne: I am anxious that they should be able to continue to prosper. Is one of the options that the Government might pursue in their representations to the United States that this date of 18 October might be postponed a little, to allow us some time in which to continue negotiations?
As I have indicated on a couple of occasions, the Government think that the way in which to move forward is to ask our friends and allies in the United States not to implement these tariffs within the timeline that they are proposing, to work with the EU and the other countries within it which are affected by the Airbus-Boeing dispute and are therefore subject to these tariffs, to secure a judgment from the WTO that confirms that we are now compliant, and to talk to the United States about how we can withdraw the tariffs and allow a sector that is vital to us and to the United States to proceed unimpeded.
This announcement has put the hard reality of trade disputes into sharp relief, but may I ask the Minister whether the tariff also applies to Welsh single malt whisky, such as that produced by Dà Mhìle Distillery in my constituency? In the harmonised tariff schedule published by the United States Government, the relevant subheading and description refer only to Irish and Scotch whisky.
There is a huge sense of frustration in the Scotch whisky industry and, indeed, among other spirits manufacturers about the fact that several European spirits were not included in the list, and that they are being treated as collateral damage in a trade dispute that has nothing to do with them. As we move forward, what steps will the Government take to try to de-escalate trade disputes more generally, so that situations such as this do not continue to arise?
As I have said several times, one of the great frustrations about this particular case is the fact that the Boeing-Airbus dispute goes back a long way. It was found that we had not behaved appropriately, hence the judgment. We would like to see reform of the World Trade Organisation to accelerate the dispute resolution process through the WTO so that the situation does not arise again, but we would also like to try to decouple that dispute and those judgments from this sector and other sectors that will be affected. We do not think that these tariffs are just; we think that they are wrong, and we want to work with our friends in the United States to try to persuade them not to implement them.
I am surprised at the Minister’s tetchy and defensive response to the gentle questioning from my hon. Friend the Member for Argyll and Bute (Brendan O’Hara). All he was asking was how many meetings the Minister had had in the past five days since this was announced. His ill-mannered friend the Under-Secretary of State for International Trade, the hon. Member for Beverley and Holderness (Graham Stuart), suggested that there would be meetings tomorrow. The Minister himself has hinted that his phone calls will not be received or secured. He is a Minister of the Crown, for goodness’ sake! Get on with it! Make sure you are speaking to them! Get this sorted!
I am incredibly grateful for that question.
The hon. Gentleman says that I should have had these meetings last week, but I was in Vietnam last week. I arrived back in the UK today, and my officials and I have been working today and reaching out. I am actually quite fond of the hon. Gentleman, but I think that he is deliberately teasing me and misrepresenting what I said. I hope to have those conversations tomorrow, but what I said was that I could not guarantee that people would pick up the phone.
The funny thing about being a Minister is that it does not necessarily mean that everyone talks to you, and it certainly does not mean that they talk to you—[Interruption.] I did say to all colleagues in the House that we all have a role to play in this. It is not a matter of, as the hon. Gentleman says, “Give it to us”. We are all in this together, and the people who work in the sector will not care whether it is the SNP, the Tories or Labour. What they will want to see is this entire House of Commons coming together to support the industry.
My hon. Friend the Member for Havant (Alan Mak) asked the question, and we speak through the Speaker, so I am looking directly at the Speaker. I say to the hon. Lady that I observe the conventions of this House.
My hon. Friend makes a powerful point. If we are going to advance our international trade objectives, that is done not just Government-to-Government, bilaterally; it is done trade organisation-to-trade organisation. To coin a phrase, we are all in it together.
Clearly these punitive tariffs on Scotch whisky will be extremely damaging for distilleries such as those in my constituency in Lochranza and Lagg on the beautiful island of Arran. Despite the Minister’s words, it is clear that this damaging trade war we face does not sit well with our so-called special relationship with the US. A number of people have asked this, and I also want to press him on whether he shares the concern that this trade war is happening just as we are at the point of preparing to lose our collective trading strength as part of the EU.
I share the concern of the hon. Lady, and of Members from every part of the House who have spoken this afternoon, that this is happening at all. It is the objective of the Government to try to persuade the United States to think again and not impose these damaging tariffs in 10 days’ time.
Mr Speaker, when you think about it, the most remote UK mainland jobs associated with Scotch whisky distilling are in my constituency by definition. I think of Old Pulteney in Wick and Glenmorangie in Tain, which are two examples providing vital jobs in places where jobs do not grow on trees. In all fairness, I wish the Government well in trying to get the United States to see sense, but the European Union is the biggest market for Scottish whisky—30% by value and 36% by volume—so surely the present trade deal we have in the EU is best for Scottish whisky.
We want to try to persuade our friends in the US—I can go on repeating that; I will doubtless get into trouble with the Chair if I do so. He is no longer in his place, but as I said to the current hon. Member for Streatham (Chuka Umunna)—and, to judge from a leaflet that came through the door of my flat in London last week, the aspirant Member for Westminster —he has consistently taken the view that the membership of the EU on current terms was the best deal for the UK. That is a consistent, logical and admirable view to take. It is his view and I respect it. It was not the view of the British people in 2016 when they voted to leave the European Union. They knew what they were voting for because we sent a leaflet telling them what it meant, and we have to deal with that reality. Many of us on the Government Benches, and indeed in other parts of the House, think there are great opportunities for the United Kingdom outside the European Union. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) is right that we should absolutely have an ongoing trade agreement with the EU, which is why I would urge him and others from across the House to get behind the Prime Minister in his moderate, sensible, flexible offer to the EU. Let us get a deal across the line. That would be much more constructive than his party’s position of arguing for the revocation of article 50.
As well as having Edrington headquartered in my constituency, I have the Glasgow Clydeside distillery, which opened in 2017, and Douglas Laing & Co, whose plans for the Clutha distillery at Pacific Quay are moving on apace. However, all that is now plagued by uncertainty because of this trade dispute. What assurance and support can the Minister give to businesses in the Scotch whisky industry, particularly fledging businesses, to ensure that that investment is sound?
These tariffs will cause concern not just in my constituency but across Scotland. Can the Minister confirm that since last Thursday there has been no direct contact between him or any other UK Minister and the US Administration over this issue?
Because I was in Vietnam. I went to the office today, and we have been reaching out and having those conversations. I say to Opposition Members that the absolute determination that we must all share is to try to protect the Scotch whisky sector and persuade the United States not to implement these tariffs in 10 days’ time. That will be my focus for the rest of this week.
Like many Members, I have a constituency interest. One of the largest employers in my constituency is the Edrington bottling plant, which bottles brands such as Macallan single malt. I am amazed to hear the Minister say that we should be straining every sinew to get this sorted, when he cannot pick up a phone from Vietnam. That is incredible. This was a decision backed by the World Trade Organisation. Can he confirm that, post Brexit, we will simply be swapping one set of EU trade rules for a different set of WTO rules and that, as such, things such as Scotch whisky will continue to be bound by decisions made elsewhere?
The hon. Lady talks about the WTO and decisions being taken elsewhere. The WTO is the international body that does dispute resolution between countries and endeavours to work for an international level playing field in trade. I am not particularly fond of the word, but I thought there was great consensus across the House on wanting to follow an international rules-based order.
By the way, on this point of who has spoken to whom, I outlined the representations made by this Government to our counterparts in the United States, which have been made at the level of the Chancellor and of the Secretary of State to Vice-President Pence and to her counterpart US trade negotiator. We have made incredibly high-level representations on this subject and will continue to do so, because we have a determination to try not to point-score, but to come to a successful resolution on behalf of the Scotch whisky sector.
May I first congratulate—I think I might be the first Member to do so—the right hon. Member for Dumfriesshire, Clydesdale and Tweeddale (David Mundell) on securing this urgent question? It is an important question for the entire House, not just for those of us whose constituencies are home to Auchentoshan, which—I will chide some Members—actually finds its heart and its spirit in the Kilpatrick hills. I should know: I illegally played in its distillery as a child and first represented it in 1992 as a councillor in Clydebank. Indeed, this very House’s house whisky—or hoose whisky—is Loch Lomond, found in the beautiful vale of Leven, and our largest export to Europe is Ballantine’s from Chivas, found of course in Dumbarton.
The Minister will know that this White House is the most transactional in history and will have seen from developments in, for example, Ukraine that it has thought nothing of ratchetting up leverage in as many ways as possible, as a precursor to securing concessions at a later date. Can he therefore say what the Government are doing to limit those 25% tariffs, or whether we are going to become another Ukraine?
We are doing everything we can to try to persuade the United States not to do this. That has to be the overriding ambition of us all, across the House. I have said this a couple of times already, and will do it again very briefly: we all have the ability to contact people in the United States on behalf of the UK Government. The party the hon. Gentleman represents—
I was going to say to the hon. Gentleman —[Interruption.] If he wants to chunter, I can sit down—[Interruption.] Asking questions and then listening to the answer is how it sort of works, but if the hon. Gentleman wants to carry on chuntering rather than listening I can sit down and he can explain to his constituents why he did not get an answer.
There are currently more Scottish whisky industry jobs based in my constituency than in any other, and the very nature of these jobs leaves my constituency and those workers extremely vulnerable to a whisky downturn. Will the Minister reassure them that no stone will be left unturned by this Government, including that of an urgent intervention from the Prime Minister to the President of the United States, in ensuring that this deeply damaging tariff is not applied?
I am very happy to give the hon. Gentleman the assurance that we will continue to make representations. As I have said, the Prime Minister follows proceedings in this House very closely, and I will make sure that he is aware of the strength of feeling across the House on this issue and of how important the House feels it will be for the Prime Minister to convey this message very strongly to the President on the next occasion on which they speak. I am sure that will be soon. I was going to say this to the hon. Member for West Dunbartonshire (Martin Docherty-Hughes), but as the hon. Member for Paisley and Renfrewshire North (Gavin Newlands) is listening very politely, I will say it to him: we should all be doing everything we can. The party in which the hon. Gentleman serves serves in government in Scotland, and the First Minister of Scotland herself will have a role to play in this. We must all pull on the rope together to deliver the result we want—that is, no imposition of these tariffs, which would be so damaging to the sector, in 10 days’ time.
We know US trade groups have been pressing for any future trade deals with the UK to drop current EU requirements on the ageing of whisky so that their younger products can be labelled and sold as some sort of equivalent. How concerned is the Minister that this is just the opening shot in what will be a determined effort by the US to destroy the protections around this iconic Scottish product?
As I said before, we view this round of tariffs as wrong, ungrounded and without foundation. I do not share the hon. Lady’s overall concern. It is very important to remember that this goes beyond Scottish whisky—there are other sectors, such as cheese, clothing and so on that are caught in the crossfire of an almost ancient dispute, which goes back to 2004. They should not be and we will do everything we can to try to persuade the United States that this is the wrong course of action and of the damage it will do to small producers, who are exactly the sort of people for whom the President says he wants to stand up in the United States. I hope that we can persuade him to protect those people here in the United Kingdom.
Given that I do not actually have a distillery in my constituency, I am in the unusual position of having more workers in my constituency employed in the neighbouring aerospace sector, at Prestwick airport, and in the Airbus supply chain. It is important for both sectors that this trade dispute is resolved as soon as possible. It is also quite obvious that, although whisky is a by-trade of this, unilaterally taking tariffs off American whiskey will not solve this, given the amount of trade we send to America. These negotiations are therefore important. Given that the Minister did not pick up the phone to the US ambassador while he was in Vietnam, did he contact the EU to see what it was doing about this?
Until the hon. Gentleman reached the very end of his question, I was going to say that I found myself in the very unusual position of agreeing with absolutely everything he had said. He is absolutely right that we need to decouple these tariffs and this dispute from the sector. We need to persuade the US that this is the wrong thing to do and that it is deeply harmful to people who had no role to play in the old dispute that has now finally reached judgment.
I am genuinely touched at the belief that my picking up the phone from Vietnam or anywhere else would have resolved this when people much higher up in the Government—at Cabinet level and at a very senior Cabinet level—have quite rightly been making these representations. I will now join in and support them in making these representations.
How many times do we say these things? The Secretary of State for Business, Energy and Industrial Strategy spoke to the Vice-President of the United States when he was here very recently. She spoke to her counterpart, and the Chancellor made representations to the US Treasury Secretary. I will endeavour to make sure that the Prime Minister, when he understands the strength of feeling here, raises these matters with President Trump. I will say it again: those who are watching this, those who have returned home and been foolish enough to put the Parliament channel on, will not want us to score points against each other. They will want us to deliver for the Scotch whisky sector.
In the interests of brevity, I do not intend to reel off all the world-leading brands produced in my wonderful constituency, although I should make an exception out of deference to and respect for my hon. Friend the Member for Kilmarnock and Loudoun (Alan Brown). Killie will always be the home of Johnnie Walker, even though it is now produced and bottled in my constituency.
The world-leading brands that are produced and bottled by Diageo in Fife are almost exclusively blended whiskies, so on the face of it we are okay, but I am uncomfortable, partly because so many others are not okay and partly because something that damages part of our whisky industry damages all of it. Does it worry the Minister at all that without the UK Government being able to do anything about it we have been put into a position where it will be seen as a massive success just to get back to where we were before? Is that a precursor of what trade deals will be like in the brave new world of the WTO?
I think that the House is grateful to the Minister both for dealing with this urgent question and the exchanges on it the last 77 minutes, and for his efforts on the previous such question. He mentioned to the House that he was making his debut at the Dispatch Box. I cannot readily call to mind an example of a Minister who on making a debut at the Box has had to answer successive urgent questions, and the hon. Gentleman has done so with considerable commitment and élan. We are grateful to him.