§ Motion made, and Question proposed. That this House do now adjourn.—[Mr. Lawson.]
§ 10.42 p.m.
§ Mr. J. A. Stodart (Edinburgh, West)
I am certain that every hon. Member will agree on one point, that after the turbulence which rocked the House some few minutes ago it is most suitable that we should before we go to bed turn our attention to that miracle of beverages which can operate either as a sedative or as a stimulant depending on what mood one is in.
During the last five years I have been a persistent questioner on the subject of exports of whisky which is immature. For the benefit of anyone who is not aware what immature whisky is, I ought to state that whisky, like rum and brandy, may not be sold in this country under three years old, and any whisky sold elsewhere under three years old is classified as immature. This restriction dates from the Immature Spirits Act, 1915, and if any hon. Member wishes to know what the effects of drinking immature whisky are, I recommend him to read the words of the Attorney-General in April, 1915, when he gave a somewhat horrific account 1037 of the effects on those who drink too much immature or young whisky.
Despite objections to its sale here, which were, according to the 1915 Act, largely on health grounds, we seem to have no scruples about causing possible ill health to people abroad, and also causing harm—more than possible harm, I think—to the reputation of what is perhaps in its true form the most remarkable drink in the world. It is remarkable because of the incredible number of distinctive flavours with which Nature alone has endowed it. It is remarkable too, if I may say so, because of the way in which it is winning more and more favour all over the world. In many countries in Europe and in Africa today one is not, if I may use the phrase. "with it" unless one drinks whisky and soda.
§ Mr. Stodart
We shall get into the realm of discussion about malt whisky and blended whisky if we get into argument about soda versus water.
This general response to whisky in the rest of the world is, of course, quite wonderful for British exports. In 1963, a total of £85 million was earned by the export of Scotch whisky. Last year, it was £93 million and this year the total is expected, not over-optimistically, to be over £100 million.
But I find it somewhat ironical that it is this outstanding success of a high-quality article which has been quoted by successive Ministers at the Board of Trade—and I pray that the Minister of State will not follow in their wake—as an argument against refusing to allow into the export markets immature whisky, which is not allowed into our own market, and which those who sell the genuine article have always maintained makes their task less easy, successful though the result has been, even if it does not do them actual harm.
It is true that, in contrast to the quite astronomical figures I have quoted of the export of Scotch whisky, immature material amounts to a trivial quantity of about 1 million proof gallons in a year and that this brings in less than £1 million, representing about only 1 per cent. in value of the total sales overseas and about 3 per cent. in volume.
1038 When Ministers at the Board of Trade refer to the tremendous success of Scotch whisky despite the competition of immature whisky and say that, therefore, there is no need to clamp down upon immature exports, it is not unfair to retort that surely a trifling amount of £1 million worth—1 million proof gallons—is really not worth upsetting a thoroughly hardworking export industry with.
It would be quite wrong if I did not refer to the exports of immature whisky that go to Sweden, because two-thirds of our exports of immature spirit go there. I believe that the figure last year was 618,000 proof gallons. It is bought by a Swedish Government monopoly, which blends and sells it under its own label and guarantees it to have been kept three years in Sweden before sale. One can have no complaint about this particular trade in view of the fact that the maturing in Sweden is guaranteed by the Swedish Government. All the same, it would be reasonable and right to say that it would be preferable to blend and mature that whisky in this country, because we can do it better here than it can be done elsewhere.
Surely it would not be difficult to discriminate, if need be, between the export of this spirit to Sweden and that quantity which goes elsewhere. This need not require what was described to me by one Minister at the Board of Trade as an apparatus of controls. The export of whisky was banned, except under licence, for a period in the early part of the 1950s. Why do the Government even risk damaging a reputation and why do they go out of their way to irritate a dollar earner of £100 million for the sake of less than £1 million, or, excluding Sweden, very much less than £1 million?
It may well be asked whether, if a ban were placed on the export of immature whisky, it would stop liquid being sold abroad under the name "whisky". That is a different aspect of the subject on which I shall not dwell long tonight. Combating false descriptions of this or any other commodity is the responsibility of, in this case, the Scotch Whisky Association, a responsibility fully accepted by the Association which spends a considerable sum of money in litigation in other countries every year. There is no doubt that if young whisky were banned from the export 1039 markets, that would help to stop the selling of "whisky" under a false label by drying up at the source what forms the main part of the contents of this so-called whisky.
The great advantage about immature whisky for those who deal in it is that it can be bought in this country for less than £1 a gallon as against about 48s. a gallon for the genuine article. It may be that the Government have a soft spot for those who trade in immature whisky merely because they do not wish to interfere with the right of people to trade, but if this is the case they are misguided. I am convinced that most of the trade is done on the basis that the immature whisky is the genuine article.
I have with me the photostat of a letter, which I shall be glad to give to the hon. Gentleman, from a firm with a London address which offers to sell to an agent in Germany barrels of young whisky at 14s. a gallon for a consignment of more than 150 barrels—there are 40 gallons in a barrel.
The letter goes on to say that labels will be posted from this country to the German agent for putting on the bottles there. The photostat copy of the label which is offered in the letter and which is named "William the Conqueror" reads like this—and let it be remembered that this whisky has been offered as young whisky:William the Conqueror Scotch Whisky. 100% Scotch Whiskies perfectly blended. Distilled, blended and aged in Scotland.
§ Mr. A. Woodburn (Clackmannan and East Stirlingshire)
I am interested in the hon. Member's problem, and it is a serious one. He said, however, that there was a softness on the part of the Government for these whisky sellers. Has this arisen simply within the last three months?
§ Mr. Stodart
If the right hon. Gentleman had been here, he would have heard me say that I have been a persistent questioner on the subject for the last five years. I am not by any means attributing this to the recent change of Government.
The reputation which Scotch whisky enjoys took years to create. It could be very much more quickly destroyed. What could easily be responsible for a 1040 decline in a long-term export asset which is based fundamentally upon a quality article is the continued export of an inferior immature product. I hope, therefore, that the Minister of State will express more than sympathy for the banning of this commodity.
§ 10.57 p.m.
§ The Minister of State, Board of Trade (Mr. Edward Redhead)
The hon. Member for Edinburgh, West (Mr. Stodart) and I might regard ourselves as enjoying a mutual nightcap on a subject of this character at this late hour. I have considerable sympathy—I mean this sincerely, notwithstanding the hon. Member's last remarks—with the purpose which, I believe, underlies his remarks tonight. I know that he is concerned to ensure that the exports of Scotch whisky are given every opportunity to continue to expand, as I acknowledge they have been doing significantly in recent years.
The record of exports of Scotch is a fine one and I join the hon. Member in paying tribute to the enterprise and efficiency of this trade, which is one of our largest and most profitable forms of exchange earner. Scotch is now one of the most popular drinks in the world, as the hon. Member has rightly said—a compliment to the increasing discrimination of consumers in all countries. Indeed, the greater the reputation which the genuine article achieves, the less and less do I think there is any risk of immature spirits being mistaken for the genuine article.
It is true that against this background of steady increase in the exports of the genuine Scotch whisky there have been spasmodic calls for the Government to intervene and prohibit exports of immature whisky. As the hon. Member has said, each year for the past four or five years he has asked the Government to produce figures of the extent of these exports. I appreciate that he is indeed a persistent advocate of banning the export of the immature spirit. It is true that during this period trade in the immature spirit has increased. The hon. Member has quoted the statistics which my Department has provided and these indicate that the increase has been from 360,000 proof gallons in 1959 to an annual rate of about 1 million proof gallons in 1964.
1041 The hon. Member has, in fairness, acknowledged that this does not tell the whole story, because these totals include a high proportion, varying between 65 and 85 per cent., which is exported to Sweden to be matured locally. This trade is on all-fours with that of mature whisky, differing from it only in the local practices of our Swedish customers, and, as I understand the hon. Gentleman, he does not regard this as an aspect of substantial complaint. Indeed, he goes so far as to suggest that if his main contention were admitted, it would be easily possible to differentiate and to make an exception in the case of exports of this commodity to Sweden.
But if the figures of exports of mature whisky to Sweden are excluded from the totals which have been quoted, I think it will be seen—and we ought to appreciate this fact—that we are talking about quantities of immature spirit which, as percentages of mature exports, are very small indeed, and even in their absolute are hardly significant. In 1964 exports of immature whisky to destinations other than Sweden amounted to only 179,000 proof gallons, or about 0.5 per cent. of mature exports in the same period.
If it is true that substantial quantities of immature spirit are being passed off abroad as whisky, then quite clearly the ingredients must come from countries other than the United Kingdom, and if there are sources of supply outside the United Kingdom, banning exports of immature whisky from this country would not of itself relieve the apprehensions which the hon. Gentleman has of such immature whisky, or admixtures of it, being passed off in other countries as the genuine article.
The concern felt in this matter has, I think, largely been directed to the position in France and Western Germany, and it is upon the latter than the hon. Gentleman has relied for examples tonight. In most of our other principal markets there are satisfactory methods of control imposed by the countries concerned, mainly for their own domestic reasons. In these countries Scotch whisky can be imported only if it has been matured for more than three years, and Her Majesty's Customs and Excise facilitate exports of whisky to those markets 1042 by providing, as necessary, certificates of age and origin at the request of any exporter.
The countries which have such regulations include the United States of America—our most important export market—most of the Commonwealth countries, and a number of Latin American and West European countries such as Switzerland and Italy. The Government consider that this is generally the most satisfactory way to control the trade in immature spirits and to prevent, or limit, the possibilities of these immature spirits being passed off as genuine Scotch whisky in other countries, and every opportunity is taken to make this point to those countries which have not so far adopted legislation on these lines.
The hon. Gentleman referred to the alleged harm to health from drinking immature spirits. I gather that that is sometimes disputed. I do not think that I need go into an argument about that, even if I were competent to advance one, for I think he rests most substantially on the harm which he feels is done to the reputation of genuine Scotch by crude imitations sold abroad at cut prices to undiscerning customers.
I appreciate the hon. Gentleman's concern. I need hardly say that that sort of abuse is utterly objectionable, and I share the feelings that he expressed in that regard. Hon. Members will have seen the counterfeit products which can be bought abroad; bottles which are labelled with tartan designs and aristocratic titles, careful, of course, to avoid the word "Scotch", to suggest that the contents of the bottle are just that.
The remedy against these practices, however, lies in the courts, like those of the particular instances which the hon. Gentleman quoted tonight, though I acknowledge that it is often difficult to institute successful proceedings in the courts of other countries where such cases of abuse come to light. However, my Department's overseas commercial officers give every assistance to the British exporter in prosecuting actions against fraudulent and misleading appellations.
Export control—and this I must emphasise—would do nothing to prevent these abuses. Moreover, for some years now we have been participating in the work of the Council of Europe Com- 1043 mittee on Exports in connection with the production and marketing of vine products and spirits, with the aim of securing, among other things, international protection for the descriptions "Scotch Whisky" and "Whisky". For a number of reasons progress in the Committee is very slow, and I cannot predict the final outcome.
The question of export control would not materially affect the position. The basic trouble lies not in any exports of immature spirit from this country, which, as I have pointed out, are relatively small, but in the immature spirits produced abroad, which are either misleadingly described as whisky or are blended and mixed with other—often genuine—Scotch spirits to produce an inferior brand. Placing a degree of control upon British exports of this immature whisky would not, therefore, make any real contribution to the solution of the problem to which the hon. Member has referred.
I know that it is sometimes suggested—as the hon. Member has suggested tonight—that it is illogical for the Government to prevent the sale of immature whisky in the United Kingdom but to allow its export. At first sight this is a plausible-sounding argument, but with respect I suggest that it does not stand up to examination. What is prevented in this way—the control is affected by the Customs—is the release for consumption of whisky that has not been matured for at least three years. Of course, only whisky which has been distilled in Scotland and then matured for at least three years may be described as Scotch whisky. Our domestic regulations do not, however, prevent the sale of immature spirit altogether. Under Customs control it is released for compounding and mixing. It is a respectable raw material, regularly bought and sold. After compounding or mixing so as to produce gin, vodka or liqueurs it may be sold for consumption as such.
It is a general rule that we do not seek to subject goods that are exported to the regulations which apply to those goods when sold on the home market. Each country has its own domestic regulations, and exporters have to comply with these and not with the domestic requirements 1044 in their own countries. I agree that in this instance it is particularly in our interest to try to bring other countries into line with our own practice. This we have been seeking to do through the Council of Europe and in other ways to which I have referred. But the banning of the export of immature whisky in itself would achieve little and, indeed, might deprive us of quite valuable exports, even though the hon. Member has sought to minimise the significance they represent.
Certainly it would deprive us—unless there was a discriminatory form of control, which he suggests—of the exports of immature spirits to Sweden. It should not be assumed, however, that exports of immature whisky are necessarily used for other than respectable purposes. Export licensing is a mechanism which should be—and, I submit, is—used sparingly. Of course, we control the exports of arms and military equipment and, in the case of some destinations, also of strategic goods, but outside this it is the well-recognised view that there is only a handful of controls for strictly limited purposes—for example, for humanitarian purposes, such as safeguarding the welfare of horses and live cattle exported from this country, for safeguarding national treasures, for the purpose of safeguarding supplies of essential raw materials such as ferrous and non-ferrous scrap, and other similar purposes.
The hon. Member has made reference to the fact that immature whisky exports were banned for a period in the 1950s. But it was for entirely different reasons from those which he urges in this instance. In the Government's view it would not be proper to use their wide emergency powers, which were originally taken for defence purposes, to stop exports except for reasons that were explicitly in the national interest and which unquestionably commanded widespread support. In our view there must be a general bias against any measure which stops exports. The onus of proving a case to the contrary must lie with those who propose it. In this instance my impression is that there is by no means unanimity in the trade. It is the Government's view, therefore, that most of the trade in immature whisky is useful, and that banning it would not stop the abuses 1045 which we all deplore. We rely rather on the alternative method of approach which I have indicated, for we feel that the instrument of export control would be inappropriate and ineffective in this instance.
§ Mr. Gordon Campbell (Moray and Nairn)
Before the Minister sits down, may I put one point to him? He has dealt with simulated Scotch whisky, but the point which my hon. Friend was putting, and which he explained very well, was confined to exports of immature whisky. The Minister's argument is that the amounts exported are insignificant. If in future exports of immature whisky were to increase to countries where there was not the legislation which he has mentioned as guaranteeing maturity, and if it then looked as if exports were suffering as a whole because of damage to the reputation of this very important export, Scotch whisky, would he and his Depart- 1046 ment look at the matter seriously to see if something ought to be done?
§ Mr. Redhead
That is a hypothetical question. I can only answer it in these terms—it would require, as I indicated before, a much more substantial case than we feel has so far been advanced to persuade us to take a different course than that which we feel is appropriate in this case.
§ Mr. John Hall
Would the Minister agree that the legislation originally introduced to prohibit the sale of immature whisky in this country consumed as whisky—
§ The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY- SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
§ Adjourned at twelve minutes past Eleven o'clock.