§ Order for Second Reading read.9.36 am
§ Mr. Bill Walker (Tayside, North)
As a non-alcohol drinking Scot, I beg to move, That the Bill be now read a Second time.
At this stage, I wish to declare that I have no interest other than that of a constituency Member with a number of Scotch whisky firms in his constituency. The provisions in the Bill are sought by the Scotch Whisky Association, trade unions, management and workers employed by the Scotch whisky associations. I understand from my conversation this morning that they are also sought by the low strength producers. The provisions are judged to be essential and deemed to be in the best long-term interests of the industry.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
The hon. Gentleman would be misleading the House if he said that the Bill, in its present form, is sought by the Association of Low Strength Whisky Producers. That body still objects to one clause, and if the hon. Gentleman thinks otherwise, he has been misled.
§ Mr. Walker
I have no wish to mislead the House. I am only telling the House what I was advised of earlier this morning. Any hon. Member who was up early enough to see the television programme will have seen me appear with a spokesperson for the association; it was on his advice that I made my comments. The last thing that I would wish to do is mislead the House.
The provisions are judged to be essential and deemed to be in the best long-term interests of the industry and of its customers, some of whom, I believe, are Members of this House. [HON. MEMBERS: "Hear, hear."] Equally, the provisions are judged to be in the interests of "UK Ltd." which will benefit, first, from the huge amount of tax collected from the Scotch whisky industry; secondly, from the thousands of jobs and stable employment that the industry provides; and thirdly, from the massive contribution that the industry makes each year to the United Kingdom export market.
It is important to note that the Bill will provide a legislative framework and that the implementation of the provisions will be triggered by orders before Parliament. We are talking about an enabling Bill. Before Ministers introduce orders, the practice is that they consult fully and widely with all interested parties. It is at that time and not before that deep and detailed arguments about such matters as the alcoholic spirit level take place. I shall return to that point when I deal with clause 2.
The first provision, clause 1, deals with the prohibition of the production in Scotland of whisky other than Scotch 682 whisky. The Scotch whisky industry supports that provision. I hope that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) will confirm that.
The background is that, in June 1982, the European Commission submitted to the European Council of Ministers proposals for a Council regulation which, inter alia, would contain a definition of whisky. As no recognised definition applied throughout the Community, the Scotch Whisky Association and the Department of Agriculture, Fisheries and Food supported the proposals.
On that point, I thank my right hon. and hon. Friends on the Government Front Bench who kindly gave me advice and assistance in the preparation of the Bill.
§ Mr. Harry Greenway (Ealing, North)
Will my hon. Friend reassure me in relation to one worry about clause 1? In future, we may have a certain uniformity about whiskies. The present strength of whiskies is their diversity. Some of us like to drink Teachers and some like to drink Glenfiddich. Is there any danger that individuality will be lost because of clause 1?
§ Mr. Walker
I am pleased to tell my hon. Friend that there is no danger of that happening. The blending of the different brands gives them their uniqueness. Also, the different distilleries that produce different quality whiskies, particularly malt whiskies, give them their distinction. The unique qualities of Scotland's highland water, barley, and the people who produce the whisky, produce many different varieties of quality to suit individual palates. My remarks are based on theory, because I am not a whisky drinker. All the evidence clearly is that that is what happens.
As I said, the Scotch Whisky Association and the Department of Agriculture, Fisheries and Food supported the proposals. Other major spirits such as gin, brandy, rum and so on were also to be covered by the Commission's proposals. The plan was that the EEC definition of whisky should be no less stringent in its terms than the current United Kingdom definition, on which the definition of Scotch whisky is based. However, as matters developed, it became clear that it would probably not be possible to achieve that objective. I shall try to explain why that is so later. In addition, it had been acknowledged and recognised for some time that the present United Kingdom definition of Scotch whisky is laid out in general terms and that it would be prudent and wise to have a revised definition.
So we had a European and United Kingdom definition problem. There was a need to remedy that by having a revised definition that would more precisely reflect the current practice within the industry on which the worldwide reputation of Scotch whisky as a quality product is based. It was also understood that the developments would result in a material difference between the anticipated Euro-definition of whisky, which is reflected in clause 3(1) of the Bill, and the revised definition of Scotch whisky which the industry seeks.
I should like the House to note that it is fully accepted within the EEC that the United Kingdom is entitled to have a definition of Scotch whisky that is more detailed than the broad Euro-definition of whisky, but that, per se, would not prevent the production of Euro-whisky in Scotland. So we would be faced with the concurrent 683 production in Scotland of Scotch whisky and Eurowhisky. The latter product could be described as whisky, a product of Scotland. At best, that could create confusion and, at worst, could damage the worldwide sales prospects of the Scotch whisky industry.
§ Mr. Tom Clarke (Monklands, West)
The hon. Gentleman is making a carefully thought out, admirable speech. On the matter of sales, does he recall that, less than a year ago, Buchanan's in my constituency, who made Black and White, was closed as a result of the Guinness takeover? That meant that the whisky that was supplied to this very House was no longer available. I am pleased to support the Bill. The only remaining whisky producing employer in my constituency, Lawsons, have asked me to do so.
§ Mr. Walker
I thank the hon. Gentleman for his useful intervention and his support. Of course I fully understand the heartache that followed the decisions that were taken. The hon. Gentleman would not expect me to make comments about Guinness at this stage. He will agree that I have probably made more than my fair share in the past. I agree with the hon. Gentleman: the industry is much too important for one to allow a single narrow issue to affect one's judgment about whether to support the Bill.
There was a danger that the worldwide prospects of Scotch whisky would be damaged. The reason is clear. Throughout the world, the description "Scotch whisky", whether expressed directly or indirectly, is taken to relate to whisky from Scotland. All who seek to pass off their whiskies as Scotch whiskies habitually do so by marketing them in a manner that suggests that they were produced in Scotland. In such circumstances, it is highly improbable that customers would be able to recognise the difference between a product that is described as Scotch whisky and a whisky that is said to be produced in Scotland but which is not described as Scotch whisky.
The existence of lawfully produced whiskies in Scotland that are not entitled to fit the description "Scotch whisky" would weaken the essentially geographical meaning of the description "Scotch whisky". That would make the worldwide defence of Scotch whisky much more difficult, if not impossible. That is why all Scots—there is no division between us on the matter—consider that the issue must be determined. We are determined to ensure that there will be no way in which Scotch whisky can become a type of whisky that can be produced anywhere. Otherwise, a product such as Scotch-type of whisky or Albanian or Afghan Scotch whisky could be produced in countries other than Scotland. That is why the Scotch whisky industry wishes to have this marvellous product, which has exports worth over £1,000 million a year, which directly provides employment for 16,000 people and many more indirectly, and which contributes £1,000 million in taxes and revenues to the Exchequer, is given the protection that a quality product of that kind merits.
The concept of protecting indigenous quality products is not new. Champagne has enjoyed such protection under French law since 1934. That is why we in the United Kingdom should legislate to protect Scotch. The provisions in clause 1 of the Bill should be in place before the EEC regulations open up the possibility of Euro-whisky production in Scotland.
684 Clause 2 relates to the sale of Scotch whisky. It prohibits the sale as Scotch whisky of any spirits that do not conform to any definition of Scotch whisky. It also provides for the setting of a minimum alcoholic strength below which Scotch whisky shall not be sold. It is important for the House to recognise that there will be differing views as to the limit at which the minimum alcoholic strength should be set. It is also important to note that nowhere in the Bill is a minimum strength laid down. The clause gives Ministers the power to table orders. That will happen only when Ministers judge it right to do so, and then only after the full and proper consultations with interested parties have taken place.
The Scotch Whisky Association, which represents a substantial majority of whisky producers in Scotland, definitely wants the provision. As I said earlier, I was told this morning — I believe that in substance that information was fairly accurate—that the association which represents low-strength producers is also in favour of setting a minimum standard. The difference between the two associations or groups is the level at which the standard should be set. I understand that there may be good technical and marketing reasons why a particular level may be used or preferred. Although I am no expert in such matters, I have been told that that has something to do with the quality of colour and taste, which may be affected by extremes of temperature — something that must be considered properly when one realises that the product is sold everywhere, from the Arctic to the Equator and on to the Antarctic. However, the difference between the two groups is not at this time large. As I understand it, it is less than 3 per cent. proof.
As I have said, I have no direct knowledge or expertise, have no view and make no recommendation on this point. I advise right hon. and hon. Members that this matter should be left to a later date when Ministers can decide. It is important that we should not limit Ministers' room for manoeuvre in their negotiations in Europe by attempting to obtain pledges on any specific level of alcoholic strength today, nor should the House decide to allow the Bill to go into Committee, should we ask for such pledges during the later stages of the Bill's passage through this House or in another place.
Clause 3 deals with the definition of Scotch whisky. Hon. Members should note that the present United Kingdom definition of Scotch whisky will remain in force until superseded by a revised definition. Under the present arrangements, the process at the distillery results in a distillate of spirits being produced which is stored, in oak casks of a capacity not exceeding 700 litres, for at least three years. Anyone who knows anything about Scotch whisky will be aware that many Scotch whiskies are matured for periods much in excess of the minimum three years.
On distillation, I should also draw hon. Members' attention to the significant difference between the current proposed requirements for Euro-whisky and the present requirements for Scotch whisky. That concerns the use of added enzymes during the distillation process — a practice that at present is not carried out in Scotland. The revised definition that the industry seeks would exclude the use of added enzymes, thus reflecting present industry practice. However, as I understand it, the definition of Euro-whisky is likely to permit the use of enzymes.
On maturation, I understand that there have been moves in Europe that may be attempts to have the period 685 reduced below three years. Distillers in the Scotch whisky industry regard three years as the absolute minimum period. That could become another area in which substantial differences between Euro-whisky and Scotch whisky develop.
Following maturation, the alcoholic strength of Scotch whisky is reduced to the required bottling strength by the addition of good Scottish water. Water and spirit caramel, which is used to standardise colour, are the only substances to be added after maturation in the Scotch whisky industry. The industry, and especially the distillers, believe in the continued uniqueness and "naturalness" of Scotch whisky as a product and wish to see the process that contributes to that set out in a revised definition of Scotch whisky. They also believe that the definition of Scotch whisky must reflect current practices and be capable of enforcement by the authorities. That is why the clause is in the Bill. Hon. Members should also note that any offence under the provisions of the Bill will be the subject of civil law proceedings. There is no provision in the Bill for criminal law proceedings.
Clause 4 deals with the provisions as they affect Northern Ireland, as covered by the Northern Ireland Act 1974. Clause 4 is necessary because of the unique legislative situation that exists between this House and Northern Ireland. Clause 5 deals with the commencement and extent of the Bill.
There has been much misleading comment in the press and elsewhere about the Bill. Some may have been designed to highlight fears, real or imagined. I hope that my remarks thus far will have set at present most, if not all, of those fears.
The Scotch whisky industry is much too important to Scotland for anyone to treat it in a cavalier or flippant manner. Unlike coal and oil—other industries that are important in Scotland — whisky as it is presently manufactured and sold world wide by the Scotch whisky industry can go on for ever. I repeat that it can go on for ever, because it is not a finite resource — it is a renewable resource.
The pure Highland water, the barley of Scotland and the skills and experience of the work force are as Scottish as sporrans, Hogmanay, the bagpipe or the kilt. However, if we do not protect it, we may one day find that, echoing the words of Robert Burns, Scotch whisky has been acquired by others. After all, it is no secret that for some time the Soviets have laid claim to some of Burns's poetry and songs. Does anyone doubt that in future we may find Moscow Scotch whisky being sold or that this famous product, which has built a worldwide reputation and sales on its quality and brand name, may somewhere, some time, be piled high and sold cheap?
I remind the House that 85 per cent. of all Scotch sold is sold outside the United Kingdom. What other United Kingdom product can lay claim to sales on that scale? [HON. MEMBERS: "None."] Yes, none. What other product manufactured in Scotland can claim that over 90 per cent. of everything produced is sold outside Scotland? [HON. MEMBERS: "None.") No other Scottish product can lay claim to that. What other product employs 16,000 people directly and generates £1 billion in revenue and taxes for the Chancellor of the Exchequer? No other product can make those claims.
The importance of the Scotch whisky industry to Scotland and to the United Kingdom cannot be overstated. That is why the Scotch Whisky Association, 686 trade unions, management and employees, as well as hon. Members representing all the political parties in Scotland, and one from England, support and are sponsors of the Bill. I understand that other hon. Members from England support the Bill, but we have only one such sponsor.
Scotch whisky is more than a whisky. It is part of Scotland's heritage and folklore. It is used as a medicine to cure many ills. As a toddy, it can dispel colds and 'flu. In porridge, it can drive out the freezing cold of Scotland's winters. It lubricates the larynx and helps parties go with a swing.
It takes something extremely important to unite the Scots. It takes something very important to bring so many Scots to this Chamber on a Friday morning and to make Scottish Members travel overnight on the sleeper from their constituencies to be present this morning. I thank those Members who have made that sacrifice and who have come down especially for this debate today.
The Scotch Whisky Bill is too important to be caught up in any parliamentary manoeuvres that may be designed to frustrate other legislation or to promote narrow sectional interests. That is why other Scottish and English supporters and I are today asking the House to allow the Bill to proceed into Committee.
§ Mr. Martin O'Neill (Clackmannan)
I have taken an interest in this subject for some years, because, in common with many other hon. Members who represent Scottish constituencies, I have a number of constituents—about 2,000 — employed in the whisky industry. They are anxious that, for their long-term future, a proper definition should be established for the product that they are proud to manufacture. They are also anxious that that product should maintain a quality that is recognised throughout the world.
One of the major problems faced by the whisky industry is created by what can only be called adulterated whisky. One does not have to travel far to appreciate that problem. If one travels to France and visits the supermarkets at the Channel ports that are designed, in many respects, to attract trade from Britain, one can find products purporting to be whisky. That whisky can have as low a strength as 28 per cent. proof. That creates problems for the whisky industry and it is important that those problems are considered today.
Whisky is categorised as one of the luxury products. Whisky distillation represents a tremendous investment because we all know that, under the existing excise regime, the maturation of the more expensive brands is an extremely costly business for firms. Those companies seek to produce high-quality products, attractively packaged and aimed at the upper end of the market. It is extremely frustrating for those companies, which incur massive expense in the promotion of their products, to find that they have been undercut by stuff that can only be called "hooch" by those who like a dram or two.
There are already whiskies of a variety of strengths on the home market that are allowed to be sold in this country because of the absence of an adequate definition of strength. We need to have that adequate definition to protect the consumer. Some of the so-called whiskies sold in Britain are sold at a strength that attracts lower excise duty. In many instances, that whisky is sold in bottles that are smaller than the standard size. Consequently, when a consumer goes into a supermarket in Britain seeking to 687 buy what he would consider to be a low-cost Scotch whisky, he is not getting a bargain. If he goes home and gets out a calculator—one needs a calculator because the arithmetic is not simple—he will realise that he has paid proportionately more for a smaller bottle of a lower strength whisky than he would for a standard bottle of Bells or whatever.
The inferior product is undermining the integrity of Scotch whisky at home and abroad. I welcome the Bill, but if I were to be so bold as to seek an amendment, I should quibble about two matters. One is that the Bill does not take the opportunity—it may not be appropriate to do so—to outlaw the bulk export of malt. That is one of the great problems faced by the whisky industry and many of my constituents are concerned about that. Indeed, in Alloa the United Glass plant makes the bottles for the whisky industry and for a large section of the country's drinks industry. My people would be very pleased if we not only outlawed the export of malt, but insisted that every drop of Scotch whisky that left this country was in a bottle made in Scotland. We would be hard pressed to find a bottle of Cognac that had not been bottled in France. Indeed, that bottle would be made in France.
The Bill provides us with the opportunity to set in motion the means whereby we can assure the definition of Scotch whisky and the integrity of the product. By such measures we can secure its export opportunities in countries such as Japan. Some three weeks ago I visited that country with a parliamentary deputation. As a result of a GATT directive we are looking to the Japanese Government to open up their considerable market to the free and fair import of Scotch whisky. The present high tax regime in Japan means that whisky costs in excess of £80. Inferior Scotch is exported to that country and it attracts less tax. Therefore, it undermines the high-quality brands that seek a market there.
I look forward to the Bill coming into effect as soon as possible. I am aware of the problems that will be encountered within the European Community regarding such a definition, but I hope that it will be speedily agreed upon. Indeed, I hope that the figure of 40 per cent. proof can be established because that is the figure used for all respectable Scotch whiskies.
A variety of figures have been bandied about, and it is up to the Commission, in conjunction with our Ministers, to negotiate that matter. Although the Parliamentary Under-Secretary is a Yorkshireman, I know that he is concerned about the best interests of Scotch whisky. Indeed, I imagine that he would declare a consumer's interest in that product. I hope that he will recognise that we in Scotland would seek a 40 per cent. proof definition. However, it is not appropriate for us to insist today on that or on the other measures that I have described.
I know that there are divisions within the Scotch whisky industry about the bulk export of malt. However, distilleries that export malt are now achieving pariah status in the industry. They are undermining the integrity of the product by their actions. Indeed, in many ways they are similar to people who seek, for the basest reason, to adulterate the product, and they are going against many of the basic principles of the consumer movement.
It is ironic that one of the blending houses linked with the production of lower-strength Scotch has associations with the co-operative movement. I am happy to be a 688 member and supporter of that movement. I was always led to believe that one of the fundamental principles of the cooperative movement was the protection of the consumers' interests. Indeed, in their early documents, the Rochdale Pioneers emphasised that they were against the adulterations of products. I find it difficult to understand why that movement should be associated with the retailing of an inferior product. In the home market that inferior product is helping to undermine a product which is endeavouring to move up market and to attract the highest profit that can be obtained in the world's drinks market. That market is large, and Scotland and the United Kingdom generally are entitled to claim a share of it.
I know that a number of my hon. Friends wish to participate in the debate and I should like to think that we shall all support the Bill. I hope that we can get it through Committee and leave it to Ministers to get the EEC to resolve the remaining problems. If that happens, whisky will have the footing that it deserves.
I shall not talk at any great length about the Guinness saga, but we all know that the industry has been through a traumatic time, from which it is now recovering. We need the foundation of a clear and adequate definition of the product to enable the industry to continue and to secure the employment prospects and the revenue that the country needs and our people deserve.
§ 10.9 am
§ Sir Hector Monro (Dumfries)
I want briefly to give warm support to the Bill introduced by my hon. Friend the Member for Tayside, North (Mr. Walker). I am glad to follow the hon. Member for Clackmannan (Mr. O'Neill), who I know has taken a great personal interest in the whole subject, and who recently had helpful discussions in Japan.
The hon. Member for Clackmannan was right to say that we should not go into the difficulties of the past couple of years that have affected the structure of the industry, because we want to look forward to future development from the current base line, which seems much more favourable than it was a little while ago. I am glad, too, to see the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) in the Chamber. He and I seem to be running campaigns, week by week, on every subject under the sun—yesterday the railways, today whisky. As joint chairman of the all-party Scotch whisky group, I am glad to see that the treasurer and secretary of that group are also here. That shows how much all-party support there is for the Bill.
Sadly, I have no constituency interest to declare. I must be one of the few hon. Members representing a Scottish constituency without a distillery or bottling plant. However, I am included among those who enjoy their dram from time to time. All of us in Scotland and in the United Kingdom have a clear responsibility to see that this most important product from Scotland continues to develop in the most favourable possible way.
We can discuss the issue under the title of the three Es —employment, exports and the Exchequer. As regards employment, all of us, particularly those who have pressed for rural development over many years, appreciate the great importance of the distilleries throughout Scotland, especially in the north and the islands where alternative employment is scarce. The distilleries have been the focal point, and we must do everything possible to ensure that they have every opportunity to develop and increase 689 employment, which we know in recent years has been falling, because the distilleries have had to close. I am glad that my hon. Friend the Member for Tayside, North was able to highlight the important fact that, whatever the Bill does, it certainly will not affect the distinctive taste of the different blends and malts that come from Scotland, because that is one of the most attractive aspects of whisky.
The second E—exports—has an importance that is clear to all of us. Without the export of Scotch whisky, our balance of payments would have a sad look to it.
The third E—the Exchequer—concerns the important issue of the duty that is payable and all the complicated formulae that accompany it. I am glad that the Chancellor did not increase the duty or even deal with an ad valorem increase last year. That was certainly of great value to the Scotch whisky industry, but it is in no way to underestimate the other aspects in which the industry is interested, such as stock relief, and so on. The Scotch Whisky Association has effectively made the case each year to successive Chancellors, and my right hon. Friend the Chancellor has a good case for continuing his decision of last year not to increase duty. Such an increase would be counter-productive if it reduced exports, which are so vital to this country. Duty must be seen in the light of exports, because home consumption is very important, too.
The Bill, which my hon. Friend presented so excellently to the House, does not require a great deal of additional explanation from those of us who are privileged to be its sponsors. It is right that the Ministry of Agriculture, Fisheries and Food should make regulations defining Scotch whisky generally and regulating the methods of distilling and sale, always with the important proviso that we have already mentioned today—that the distinctive blends and malts that come from Scotland must be in no way affected.
It is right that we should be able to strengthen our position in world markets. I have already mentioned the importance of resolving the Japanese question, which is now looking much more favourable in terms of import duties. The Bill will also enable Ministers, with the advice of the Scotch Whisky Association — one of the most effective trade associations in this country — to make regulations and definitions for this country and to standards that will help our position in the EEC.
Part of the Bill covers the issue of the strength of whisky, which will be regulated after full discussions. It is important to have a minimum standard. When a person buys a whisky, he expects it to be of a certain strength. We have already discussed taste. If he wants to dilute his whisky with water, so be it. That should not be done for him in the bottle beforehand. That matter should be clarified, and the approach of my hon. Friend the Member for Tayside, North will, I hope, be accepted by my hon. Friend the Minister later, because it will be beneficial to the future production and sale of whisky in this country.
As with so many other foods and drinks, it is absolutely right that we should examine carefully what we are putting on sale in the shops. In no way must we ever allow the quality and standard of Scotch whisky to deteriorate. My hon. Friend was wise to bring in the Bill. I know that it is welcomed by the Scotch Whisky Association and many companies and distilleries thoughout Scotland, and I join many other hon. Members in wishing it well and a speedy passage into law.
§ Mrs. Margaret Ewing (Moray)
My hon. Friend the Member for Banff and Buchan (Mr. Salmond), who is a sponsor of the Bill, renders his apologies to the hon. Member for Tayside, North (Mr. Walker) for his absence due to other commitments, and I am here to speak on his behalf.
It is not often that the hon. Member for Tayside. North and I agree on something, but today there is cross-party agreement on this major issue. As the hon. Gentleman quoted our national bard in his opening remarks, he will forgive me one brief nationalist point. Regularly, at Burns' suppers and on St. Andrew's day, we use the toast:Freedom and Whisky gan thegither!We are discussing an industry which is vital to Scotland and the United Kingdom economy, as has already been said by several hon. Members. This is not an occasion for raising some of the other issues that affect the industry, but are not touched on in the Bill, such as what has happened to the revenue assistance for distilleries, or the taxation system in general. We must examine the Bill and what it can do for a vital industry.
We see the Scotch whisky industry not only as a source of wealth creation, but as a symbolic part of our heritage in Scotland. Many people immediately associate Scotland with whisky, and we want the product to he preserved and to keep its quality and standards in high esteem throughout the world.
I plead a special constituency interest. I am glad that I am speaking before what the hon. Member for Cunninghame, North (Mr. Wilson) has called the "liquid dungeons" open, because I wish to refer to the distilleries in my constituency of Moray and after I have read out the names of the distilleries hon. Members might be tempted to go and taste this golden product. It is worth remembering that 60 of Scotland's 110 malt whiskies come from the Grampian region, and many of them are used for blending with grain whiskies from elsewhere in Scotland.
The distilleries in the Moray constituency are the Aberlour-Glenlivet, Miltonduff-Glenlivet, Dufftown-Glenlivet, Inchgower, Pittyvaich-Glenlivet, Strathisla, which produces "100 Pipers", The Glenlivet, Benriach, Caperdonich, Glen Grant, Longmorn, Glen Moray-Glenlivet, Glen Spey, Glenfarclas, Glenfiddich, Balvenie, Glenrothes, Tamdhu-Glenlivet, Auchroisk, Knockando, Strathmill, Mulben and Macallan.
Scottish Malt Distillers Ltd. is based in Elgin in my constituency and has overall responsibility for Aultmore, Benrinnes, Cardhu, Cragganmore, Craigellachie, Dailuaine, Glendullan, Glen Elgin, Glenlossie, Linkwood, Mortlach, Glenburgie-Glenlivet, Tamnavulin-Glenlivet and the Tomintoul-Glenlivet distilleries. From that list hon. Members will see that I have a very special interest in the Bill.
Not all those distilleries are currently in production. Some have been mothballed over the years and it is our firm hope in Moray that all our Speyside malts will again go into production in the next few years. It is fair to emphasise that the industry is not a major direct employer in the area, because the distilling process is not labour-intensive. That is because of the developments that have taken place in the industry. However, it is a major indirect employer in my constituency. We have grain production for the maltings and, of course, for the whisky itself. There 691 is also employment in the transportation, bottling, packaging and marketing of the product and it is vital to our tourist industry in Speyside.
I hope that many hon. Members will take the opportunity to visit Speyside and follow the whisky trails. Perhaps in each distillery they will be offered a sample of our wonderful product. The industry is vital to all the ancillary industries that I have mentioned and is, therefore, of great significance in my area. It would be helpful to the House if I read out one or two comments that have been sent to me about the Bill by some members of the industry in my constituency. A letter from Scottish Malt Distillers Ltd. says:I hope that you will give this your full support as the introduction of the proposed E.C. legislation would lead to a more lax Definition of Scotch Whisky, therefore damaging our industry.A letter from Chivas Brothers Ltd., says:The premium aspect of Scotch Whisky is quietly being eroded and this must be stopped.The director of the company says that he is also its technical director and has 25 years' experience in the industry and is involved in the various stages of the technical definition of whisky. He says that it is important to support the definition of 40 per cent. v/v. A letter from the Grant distillery at Glenfarclas, Ballindalloch, says:As an independent distilling company we believe that this Bill is most important to protect the good name of Scotch Whisky, not just in the U.K. but also overseas, where unfortunately there seems to be more and more bottles of `Scotch Whisky' appearing at ridiculously low strengths, and of dubious quality which are giving the industry a bad image.Those few comments from some of the producers in my area emphasise the importance of the Bill which I hope will have the full support of the House.
It does not seem long ago that we had a dispute with the EC about the definition of the water that we were using in Scotch whisky. There was a long wrangle in the European Parliament and the Commission about whether the purity of Scottish water was suitable for including in this product. Fortunately, we won that battle, because the burns and the streams of the Speyside valley and the other valleys in the Scottish highlands and islands give this wonderful product its distinctive nature. We must constantly safeguard our industry against legislation emanating from other places which could destroy its image and purity.
The Bill is important to an industry which has gone through a traumatic phase. There is no doubt that the takeover bids by Guinness, the insider dealing and Department of Trade and Industry inquiries have undermined the general confidence of Scotland's whisky industry. Although the Bill deals only with smaller aspects of the industry, it will give the industry a foothold to start rebuilding the confidence that is essential to ensure progress in revitalising the industry and eradicating the slightly tarnished image that it has had in the past few years. I am happy to give my full support to the Bill.
§ Sir John Farr (Harborough)
I congratulate my hon. Friend the Member for Tayside, North (Mr. Walker) on being successful in the ballot and on his acumen in choosing this subject for debate. I can think of no better 692 purpose than the one that he is pursuing, because it will put right many things that are wrong in the important product of Scotch whisky.
I hope that the hon. Member for Moray (Mrs. Ewing) will forgive me if I do not follow her because she has great expertise and I should be lost in trying to emulate her speech. The hon. Member for Clackmannan (Mr. O'Neill) spoke about what are called low-strength whiskies which have on the label the words "low strength". I think he said that anything below 40 per cent. should be marked as low strength. The words he used were a bit strong, because he said that a product below 40 per cent. proof was adulterated. It is surely strange to say that whisky that is marked as 40 per cent. alcohol and 60 per cent. water is satisfactory, while ruling out as adulterated a product of which the water content is 61 per cent. and the alcohol content 39 per cent. I have received representations from the Co-operative Society in Leicester about some successful brands that the hon. Member for Clackmannan would call adulterated.
All hon. Members recognise the importance of Scotch whisky to our export trade. I think that it exceeds the export value of any other single manufactured product in Britain. It is vital not just to Scotland, but to Scotland's well-being. Sometimes Scotland is thought by many people to be a burdensome responsibility for the rest of the United Kingdom. However, I can assure hon. Members that the Chancellor of the Exchequer greatly welcomes the fantastic contributon that the duty on Scotch whisky makes to his Budget. As I say, it plays an important part in our export trade.
Clause 3 enters into certain details. In line 35 it refers to the need for wooden casks. Details of that sort, the length of time for which whisky should be matured—three years in wooden casks—and the exact capacity of the casks are writing into stone factors that can change fairly rapidly. I mention that because for some years I worked in a brewery. Only 30 years ago the use of anything other than wooden casks in a brewery was unthinkable. I am not a beer connoisseur, although I know that many hon. Members are, but 30 years ago such a connoisseur would have said that beer could not be produced unless it was fermented in wood.
I shall not mention the brewery in which I used to work, but only a year or so ago in that brewery there was not a wooden cask in sight. The whole process is now entirely mechanised and no manpower is visible. However, the brewery's sales have increased substantially, with no loss of quality.
§ Mr. O'Neill
I think that the hon. Gentleman is confusing two different products. The point of modern brewing is for the beer to be in the casks for as short a time as possible; therefore, it does not matter what kind of cask is used. It is more a matter of convenience. Whisky, however, matures in the cask, and there is an interaction between the spirit and the wood. The casks are sherry casks, which are treated so that they give Scotch its particular flavour. In this instance, beer and whisky are incompatible. The definition is necessary to give the product the consistency that lies at the heart of the Bill's purpose.
§ Sir John Farr
I bow to the superior knowledge of the hon. Member for Clackmannan, who earlier made such an interesting and informative speech. All I can say is that 693 such matters change. In some continental countries, such as France, it used to he thought that the best brandies and wines could not be produced in anything other than an ancient, well-matured wooden cask. However, vineyards are now producing wines in containers that would have been unthinkable a few years ago.
Often, the ancient casks to which the hon. Gentleman referred, which are imported for the purpose, impart a favourable flavour to the final product. On the other hand, many modern materials are available that provide the same sort of restful quality, but impart no flavour whatever. I dare say that some parts of the Continent are already changing to such methods.
It seems a bit risky to write the following three requirements into the Bill. Besides the requirement for wooden casks, clause 3(1)(b) stipulates a maturing period of at least three years. Surely that period could change well within our lifetime. It also requires a capacity not exceeding 700 litres a day. That capacity has customarily been used—I suppose that it is about 150 gallons—but, again, it could change in time.
Clause 2(1)(b) refers to an order which is to be made concerning consultation on the alcoholic strength of Scotch whisky. Before I can support the Bill, I should like an assurance that such consultations will be meaningful. I received a deputation from the Leicester Co-operative Wholesale Society a few days ago. Its members are concerned about what will happen to their excellent low-strength whiskies—that is, whiskies containing less than 40 per cent. alcohol—if an order is made that rules that any whisky whose alcoholic strength is below 40 per cent. is not Scotch whisky. The House will, I think, require an assurance from my hon. Friend that proper consultation will take place among all the interested parties — not simply the ancient Scotch distilleries described by the hon. Member for Moray, but some of the distilleries that produce low-strength whisky. I should like their views to be taken into account.
§ Mrs. Margaret Ewing
It may be helpful if I make it clear to the hon. Gentleman that the distilleries themselves do not produce whisky with a low alcohol content; they produce at the same volume all the time. Low-strength whisky is whisky that has been watered down in a later process.
§ Sir John Farr
The hon. Lady's intervention shows again how valuable it is to have an expert in the House. I accept her explanation, and apologise to the House for my mistake. My point, however, is that those who produce and sell whisky regarded as below strength today should not be put out of business by an order that makes 40 per cent. the final figure.
I know that my hon. Friend the Member for Tayside, North has been concerned about Euro-whisky. He explained very clearly that he intends to try to introduce legislation that will give a proper definition of Scotch whisky before an attempt is made in the EEC. I understand that the EEC is trying to define what it calls "spirituous beverages". The EEC's definition of whisky provides for the generic production of something called whisky which would permit the use of substances such as synthetic enzymes in the preparation of the spirit. Scotch whisky, as produced in Scotland, is not produced by such processes, and one of the main objects of clause I is to ensure that Euro-whisky cannot be produced in Scotland. No doubt the whole House will approve of that attempt.
694 I would not be so arrogant as to say that we have won over the EEC, but we are directing it on what the proper definition of Scotch whisky should be, and once the Bill goes into Committee, which it will do shortly, that will be the end of it. Nevertheless, I do not know how effective the Bill will be in a court in relation to European law.
§ Mr. Bill Walker
It will be much more effective to have legislation in place than not to have any legislation.
§ Sir John Farr
As I have said, there is no doubt that my hon. Friend's Bill will go through today. I cannot imagine that anyone will object to it. However, it is useless for us to consider that, simply because we give a proper definition of Scotch whisky, that will be the end of the matter.
As my hon. Friend the Minister will know, there is a drug called carbadox, which was banned in Britain because it could cause cancer in the rearing of pigs. On 17 June this year, The Guardian reported that the EEC had ruled that the drug must be put back on to the market:There will be no appeal and the Ministry of Agriculture admitted yesterday that it is powerless to prevent UK pig farmers from feeding the drug, known as carbadox, to their animals.The drug was the subject of a study by United Kingdom Government scientists, who advised as long ago as 1985 that it should be banned because it was a "genotoxic carcinogen". The Guardian explained:Feed-mill and farm workers were most at risk because they handled large quantities of the drug and even minute amounts of cancer-causing agents present health risks.The United Kingdom Government were taken to the European Court of Justice in March this year, where it was ruled that the drug must be used in Britain. Dr. Tim Lang, director of the London Food Commission—quoted in The Guardian—said:It is outrageous that a drug company can use its muscle in the EEC to overturn the British ban.I am merely saying that with this background there is an interesting parallel to be drawn between the definitions of Scotch whisky and Euro-whisky.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson)
Much of what my hon. Friend says is correct, but much is a muddle. Carbadox has nothing to do with Scotch whisky. Scotch whisky is one of the purest of products and carbadox is a drug.
We have legislated to ensure that carbadox will be handled by workers in agriculture in a way that will be safer than hitherto. More especially, the containers that hold the product will be clearly, if not fiercely, labelled. I shall be surprised if anyone goes within 10 ft of such a container when he sees the labelling on it. Labelling is important also when dealing with Scotch whisky. That is why part of the debate has been directed to the strength of whisky. To muddle the two issues is mischievous.
§ Sir John Farr
I cannot describe my hon. Friend's contribution as being particularly helpful. I am not seeking to muddle the debate. My purpose is to make it clear that when we legislate in this place we often find that our legislation is overruled by the European Community. No one can argue with that. Indeed, the Community has recently overruled the Ministry of Agriculture, Fisheries and Food on the use of carbadox, a dangerous product, which we shall now have to use. The Community may well overrule what we decide this morning by introducing to 695 member states its definition of Euro-whisky. I consider that to be a reasonable parallel, but I note that my hon. Friend the Minister shakes his head.
Another example is firearms legislation. A Bill is shortly to be presented to the House on firearms, and the Community is producing a ruling that will enable all EEC member countries to transmit weapons and ammunition freely around the Community. Our firearms legislation could be in the same position as our definition of Scotch whisky.
As I have told the House, I received a letter from Mr. Harvey of the Leicester Co-operative Society Ltd. It is dated 7 December. He states in his letter that he regards the Bill as a threat to lower-strength whisky, and refers to a recent article in The Sunday Times, in which reference was made to Highland Abbey. He writes:It is important to remember that the SWA"—the Scotch Whisky Associaton—exclusively represents the interests of Scotch whisky producers, which are not necessarily the interests of our customers, the Scotch whisky drinkers.Mr. Harvey is of the opinion—I believe it to be correct —that the SWA wants to outlaw whisky brands that are under 40 per cent. by volume. He claims that the SWAconsiders that anything less will undermine its members' businesses.I support the view of the Leicester Co-operative Society Ltd. that the outlawing of lower-strength whisky would be damaging to its trade. Hon. Members may have seen an article in an issue of Which? on the examination of a number of various whiskies by independent analysts and customers. It is interesting to note that of the whiskies tasted, customer preference placed three Co-op brands in first, second and third positions. The whisky that took first position is called Heatherdale. Second place was taken by the Co-op's Arden House, a brand that the hon. Member for Clackmannan would describe as adulterated whisky as its strength is below 40 per cent. by volume. Third position was taken by the Co-op brand that is known as Majority. The brand that achieved fourth place was Safeway's fiveyear-old. It is apparent from the analysis in Which? and from The Sunday Times report that appeared not so long ago that there is a good deal of customer preference for Scotch whisky that has a lower alcoholic content than full-strength whisky.
§ Mr. Bill Walker
I understand my hon. Friend's concern about United Kingdom customers. If our only concern was for them, I think that his remarks would be pertinent and extremely relevant. However, I remind my hon. Friend that I have made it clear that over 85 per cent. of all Scotch is sold outside the United Kingdom. It is the protection of that export trade and what it contributes to "United Kingdom Ltd." that lies behind the Bill.
§ Sir John Farr
I agree with my hon. Friend. On the other hand, there is a school of thought that it would be helpful, as the hon. Member for Clackmannan has said, if low-quality whisky were not exported in bulk. If more bottling were done on site in Scotland, we might get rid of the problem of low-quality whisky being exported.
The Sunday Times article bore the heading,Weak whisky cuts no ice with Scots".It referred to Highland Abbey, which has been well reviewed and received by a number of connoisseurs. Another article that appeared in The Times referred to an 696 increase recently in what it described as "low-strength whisky sales". As Mr. Harvey wrote, there is no doubt that it isincreasingly important in today's health-conscious society, where the emphasis is on lower alcohol drinks and healthy eating.That is the background to his argument that the Co-op should be able to retail a lower-strength whisky. The letter continues:It also means we can offer a range of products at prices to meet the budgets of the majority of our customers.The increase in the sales of lower-strength whiskies in recent months has been about 8 per cent., and there is no doubt that lower-strength whiskies have a corner of the market. My hon. Friend the Minister should take cognisance of that when the Bill is considered in Committee. There is no way in which lower-strength whiskies can be frozen out, as it were.
It has been said that if there is lower-strength whisky on the market, there will be those who will sell it as full-strength whisky. It is argued that it will he difficult for consumers to know whether it is low or full-strength. This may not be the appropriate time to talk about possible alterations to the Bill, but that problem could be overcome if all Scotch whisky, whether low-strength or not, were to bear a label containing the alcohol content under the brand name with the letters and figures of the alcohol content being at least I in high. With such labelling, customers could see for themselves the alcohol content of Highland Abbey or any other whisky. I understand that there is a requirement now for the label to contain the information that the brand is a lower-strength whisky. This information often appears in print of an insignificant size and type, however, and does not really catch the customer's eye, especially in a crowded bar where perhaps the staff are in a hurry. In these circumstances, the customer can be taken for a ride.
Once again, I wish to congratulate my hon. Friend the Member for Tayside, North on what he seeks to do. I think that the Bill will be extremely helpful. The Scotch whisky industry is essential to Britain. We in England often say that we could get along without Scotland, but England certainly could not get along without Scotch whisky. I congratulate my hon. Friend on his initiative and on the ability that he has demonstrated in introducing the Bill.
§ Mr. William McKelvey (Kilmarnock and Loudoun)
I offer my congratulations to the hon. Member for Tayside, North (Mr. Walker) on introducing the Bill. There is considerable pressure on hon. Members who draw a high place in the ballot to take up various matters in a private Member's Bill that are currently of concern. The hon. Gentleman has done the United Kingdom a favour by introducing his Bill, and in doing so has advanced a strong argument for the preservation of part of Scotland's heritage. I am slightly worried that the hon. Gentleman is a non-drinker, but only because I am now his next-door neighbour in London. I was hoping that during the festivities we would extend our Scottish neighbourly custom of having a dram. I am sure—indeed, I know—that he keeps whisky in the house
§ Mr. Bill Walker
I thank my hon. Friend for giving way —he is my hon. Friend, in many different ways. May I 697 assure him that I always have a stock of whisky at home and in my flat and that he is welcome to come any time and have some?
§ Mr. McKelvey
It is comforting to know that in sheer desperation I just have to knock down the bathroom wall to get to the necessary supply in an emergency.
We must consider the facts about Scotch whisky. It has been said that it is Scotland's most enduring natural asset, and long may it be so. I happen to think that it is also one of Scotland's most endearing natural assets. We should do everything in our power to protect both its reputation and the thousands of jobs which provide employment for our fellow Scots. Some 16,000 people are involved directly in manufacturing, distilling, blending and bottling of whisky and we can at least double that figure with all those involved indirectly in the whisky trade, whether in transport, selling or the other ancilliary aspects of distribution.
We cannot deny the tremendous achievements of Scotch whisky. It is with some sadness that I tell the House that I was terribly disappointed that only two weeks ago when the Chancellor of the Exchequer was in Scotland he described the Scots as uninventive. One of our famous inventions makes the Chancellor of the Exchequer more than £900 million a year in excise duty and VAT. As has already been said, Scotch whisky is Great Britain's greatest export earner. Despite recent claims that the computer industry has overtaken us, it was quickly pointed out that many of the computer parts were foreign-made. Our whisky is made in Scotland with Scottish products.
I do not want to reflect on some of the difficulties of the whisky industry, but in the early 1970s and certainly up to 1979 there was a serious hiccough in the sales of Scottish whisky. Because some whisky distillers and companies had not done sufficient market research on sales, they had excess whisky on their hands, so the prices had to be lowered. Many jobs were lost because distilleries had to be mothballed to deal with the problem of overproduction. I am glad to say that since 1979 the trend has been reversed, and again we are taking our share of the world markets. The achievement of £1 billion in export earnings every year is, indeed, tremendous.
I must declare an interest because my constituency includes the Johnny Walker bottling and blending shop, which happens to be the biggest in Europe, if not in the world It is our single biggest employer. Nine hundred people are involved in the bottling and blending shop and there is the further advantage that visitors who come to Kilmarnock are always made welcome. They are shown round and never depart without tasting or receiving a small gift of the product. If anybody wishes, for whatever reason, to visit Kilmarnock, he should not leave without visiting Johnny Walker's blending and bottling shop.
Because of the tremendous progress in mechanised blending, even if we were to increase our output, it would not necessarily mean more jobs. We are worried that, if there were a threat to the Scotch whisky industry, we could lose jobs, but if we underpin this legislation we shall at least establish these jobs for many years to come. Therefore, I strongly support the Bill.
Many things have been said about Scotch whisky. On St. Andrew's night I had the privilege to propose a toast to Scotland at the Kilmaurs bowling club. As there is little to he said about St. Andrew's, I spoke about our famous national spirit. In my research I found a small piece which 698 is attributed to James Hogg, who was a hit of a poet and certainly a philosopher in the mid-eighteenth century, by Christopher North, whoever he was. It is entitled — I have taken some licence with the title — "The Real Scotch Whisky". If I lapse into the vernacular, the Hansard writers should not worry because I shall send them a copy. James Hogg said of the real Scotch whisky:Gie me the real Scotch, and I weel believe I could mak' drinking toddy oot o' sea-water. The human mind never tires o' this fine spirit any mair than o' caller air. If a body could just find oot the exac' proper proportion and quantity that ought to be drunk every day, and keep to that, I verily trow that he might leeve for ever, without dying at a', and that doctors and kirkyards would go oot o' fashion.As I said in Kilmaurs two weeks ago, often those from outside Scotland think that we Scots indulge ourselves in the consumption of our famous golden spirit, without considering that we are patriots for mankind. We are trying to find the exact formula which will give w; life for ever. Therefore, we should not look down on those patriots, either those who have passed into another world because they never found the exact formula or those great Scotsmen and women who at present are trying hard to find the secret formula.
One only has to look at this diagram of a bottle of Scotch whisky to see how important the issue is to the Exchequer. An ordinary bottle of whisky costs about £7.75, of which £5.74, or 74 per cent., is returned directly in VAT and excise duty to the coffers of the Chancellor of the Exchequer. That is an enormous tax on the consumer and one which I am sure the Exchequer finds valuable. The Chancellor has squeezed tax to the limit from the Scotch whisky industry. I plead with him in future, if possible, not only to hold tax at the present level, but to reduce at so that we can sell more.
Obviously, there is confusion about the strength of Scotch whisky. I am not saying what the minimum strength should be, but everyone in the industry should realise that, if we do not have a minimum level, the whole Scotch whisky industry is in danger. Even whisky producers that have a corner of the market— the group of people who sell what they call low-strength Scotch whisky—would be eliminated. That would happen if in future no minimum level was set, which would protect the production of Scotch whisky throughout.
That is not the major point of the Bill, although the low-strength producers claim it is. The strength of the Bill lies in the fact that we shall be able to arm our Ministers with enabling legislation, which will strengthen their hands—
§ 11 am
§ Mr. Frank Dobson (Holborn and St. Pancras)
On a point of order, Madam Deputy Speaker. I am reluctant to interrupt private Members' time, particularly the witty speech by my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) — all the more appropriately, as it is exactly opening time.
I should like to know, Madam Deputy Speaker, whether you have received any representations from the Secretary of State for Social Services or any of his junior Ministers in response to the representations by my hon. Friend the Member for Livingston (Mr. Cook), seeking a statement from the Department on the news today that, on the instructions of the Prime Minister, messengers are being sent all around the country—all three countries— 699 to tell health authorities that they must become bad payers for the rest of the financial year, to eke out the meagre supply of funds that they have received.
It is a most important and indeed sickening development when the Prime Minister refuses to answer questions in the House on the Health Service, recites a lot of statistics and then furtively sends her officials round the country to tell health authorities that they must stop paying up and make themselves an even worse proposition for many small suppliers. We all know that the Health Service is a bad payer to most of its staff. Hitherto, it has never been a bad payer to its contractors—
§ Madam Deputy Speaker (Miss Betty Boothroyd)
Order. I can answer the hon. Gentleman in one word—no. No application has been received from any Minister for a statement today.
§ Mr. Robert N. Wareing (Liverpool, West Derby)
Further to that point of order, Madam Deputy Speaker. Can you guide us on how we can bring about a statement, perhaps at 2 pm today, in view of the fact that the House gave the Prime Minister an opportunity yesterday to make her feelings known on how the National Health Service might deal with its financial problems? In view of the inevitable widespread concern when people read in the newspapers today that the Prime Minister is telling the NHS to renege on its contractual agreements with its suppliers, instead of allowing the Government to do what most people would think right—to provide more—
§ Madam Deputy Speaker
Order. I am afraid that hon. Members are tending to use points of order to make political points, which is strictly out of order. I shall be strict on that. I have made the situation known. No application has been received. I refer the Opposition Front Bench to the usual channels in relation to any statements in the House.
§ 11.2 am
§ Mr. McKelvey
I was talking about the minimum strength of whisky and the need for future legislation to establish exactly what that minimum should be. It is evident from the Scotch Whisky Association literature that it would prefer the level to be set at 40 per cent., as it has been established in Scotland for many years by custom and practice. We shall have to see how that argument develops.
We must protect not only the reputation of Scotch whisky but the magic and mystery that we attach to its flavour and strength. One matter continues to concern me, and I have been quoted on it for many years. I deplore the transportation of bulk whisky into foreign parts. It is not simply our transporting bulk whisky that can be adulterated by adding water that concerns me, but when it is adulterated by some countries which add their own whisky blend they are giving that blend the respectability of Scotch whisky, which it does not deserve.
I recognise the argument of those who indulge in that practice, that jobs could be lost if it were ended. They may lose jobs in the short term, but in the long term we risk losing not only the reputation of our whisky but the jobs of all those who are now involved in that precious industry for Scotland.
I think that the whole House will congratulate the hon. Member for Tayside, North on his Bill. I honestly believe 700 that no one who has the interests of either Scotland or the Scotch whisky industry at heart could contemplate any form of blockage on the Bill. To do so would be to play games with the livelihood of countless thousands of people in Scotland. Jobs are scarce enough in Scotland, and we should not want to jeopardise them in any way.
The modest cottage in which I live lies two miles downwind of the Johnny Walker distillery. The wind carries the marvellous scent of the whisky there when the blending process is taking place. I say this seriously, because some people would say that we should consider the health aspect, particularly in relation to the consumption of alcohol. The people in my village of Kilmaurs are rosy-cheeked. They are famous for the fact that they live for a long time. I think that that is partly due to the fact that they are breathing that marvellous additive that comes along the air tunnels from the whisky blending shop at Johnny Walker. Kilmaurs is considered locally as a health resort. The fact that the small village contains three pubs probably adds to that.
I congratulate the hon. Member for Tayside, North and am delighted to be a sponsor of his Bill. I, and I am sure the whole House, wish it every success.
§ 11.8 am
§ Mr. Roger Sims (Chislehurst)
I am sure that the whole House will have enjoyed the speech that we have just heard by the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey), will admire the way in which the hon. Gentleman was able to put in a few commercials for a certain not unknown brand, and will envy his living circumstances.
I hope that the House will tolerate another contribution to the debate from England. My qualifications for taking part are, first, that before I entered the House I was very much involved in the export trade, selling whisky overseas, especially to Japan and Hong Kong. Secondly, I am parliamentary adviser to the Scotch Whisky Association, and I declare an interest accordingly.
The Scotch Whisky Association represents the vast bulk of the Scottish whisky industry which, as we have heard, sustains some 16,000 jobs directly, and many more indirectly. It produces over £1 billion annually in export earnings, a figure that is steadily increasing, and exports to some 190 overseas markets, despite various trade barriers erected in a number of countries, not least Japan. The industry very much welcomes the recent GATT decision about Japanese trade barriers and looks to Japan to implement the GATT ruling rapidly.
The industry produces some £900 million for the Treasury in duty and VAT. The hon. Member for Kilmarnock and Loudoun drew attention to the fact that some 74 per cent. of the retail price of a bottle of Scotch whisky goes straight to the Treasury. This is a very discriminatory imposition. About an ounce of whisky contributes nearly 18p in duty to Her Majesty's Government. There is a similar amount of alcohol in 2 oz of sherry, which contributes only 12p. The alcoholic equivalent in wine bears a burden of 10p duty. Half a pint of beer, which is another alcoholic equivalent, carries a duty of 9.5p — as against 18p for whisky. This is a grossly unfair burden for the whisky industry to carry. It has one of the highest rates of duty throughout the Common Market.
I hope that my hon. Friend the Minister, to whose contribution we look forward later in the debate, will 701 convey to the Chancellor of the Exchequer the industry's feeling of injustice about the duty that it pays. It also feels that corporation tax bears unfairly upon it because the industry does not enjoy any stock relief, although the law requires that the product must be matured for at least three years.
This is the background to the Bill introduced by my hon. Friend the Member for Tayside, North (Mr. Walker). I wonder whether nobility can go higher than for a tea-totaller to introduce a Bill of this character, and all credit is due to my hon. Friend for doing so. I can confirm that the Scotch Whisky Association warmly welcomes the Bill and hopes that it can help to secure its passage through both Houses, as it will benefit the industry and the consumer.
Whisky is particularly in our minds at this time of year. There are few people with a harder task in this House than you, Madam Deputy Speaker, and your colleagues. We are looking forward to this time next week when we go into recess. I hope that you will have the opportunity, Madam Deputy Speaker, during the recess to put your feet up, relax and enjoy a glass or two of whisky. To do that, and perhaps to give one or two presents, you may be purchasing whisky in the next week or two. I do not know whether you buy it here in London or at home. You may care to go to a shop less than a half a mile away, where you will find that the standard brands are being sold at about £8.89 a bottle. You may do better in the suburbs or the provinces, but that does not alter the argument that I wish to produce from the figures.
The unsuspecting shopper may notice that, as against the standard brands at £8.89, there are on another shelf perhaps less well known labels offered at £7.99. A careful examination of the labels on those bottles will reveal that they contain only 70 cl of whisky, as against the standard brands which contain 75 cl. The sum of £7.99 for 70 cl is equivalent to £8.56 for 75 cl, which makes it rather less of a bargain than one might have thought at first. That problem will be met by the EEC regulations which were discussed in the House a few weeks ago in an attempt to obtain a standard size for whisky bottles.
That still leaves us with the problem of the difference in strengths. Everyone who has spoken in the debate—and, I suspect, everyone in the Chamber—is familiar with the process by which whisky is produced, but some of those people who take an interest in our proceedings may be less familiar. My hon. Friend the Member for Harborough (Sir J. Farr), who has temporarily left the Chamber, has shown that he does not perhaps have the fullest knowledge of the process.
I warmly endorse the invitations extended by a couple of Opposition Members who have distilleries and bottling plants in their constituencies. Anybody who has the opportunity to do so should visit a distillery or a blending and bottling plant because it is important to understand that the blended whiskies which we are accustomed to drinking are the product of matured malt whiskies from various distilleries throughout Scotland—some of which have been listed this morning—and grain whiskies. It is the technique by which these whiskies are blended and the different types and proportion of malt used which produce the final product and account for the fact that there are so many different whiskies.
As my hon. Friend the Member for Tayside, North said in his opening speech, there is not the slightest danger of uniformity. It is the delight of the industry that there are 702 so many different whiskies. It is fascinating to go around a blending plant, to see the huge vats into which both malt and grain whiskies have been poured and to see them being mixed by mechanical means or by compressed air. If one climbs to the top of one of these vats, opens the little porthole and takes a sniff or two, I guarantee that it will clear any cold or other ailment from which one may suffer.
The product is put into casks, where it matures for three years. That is an important part of the blending and maturing process. After three years, and perhaps a good deal longer, the bottling process starts. However. I would never recommend anybody to take a glass of whisky straight from the cask because, if one tried to drink it, it would take the roof off the top of one's mouth, as it is almost pure alcohol. The next stage is to add water to reduce the alcohol content. It should be good Scottish water, not the London stuff which has been through umpteen kidneys beforehand. One does not need to be an expert to appreciate that the quantity of water added will determine the final alcohol content.
By tradition, content has been described in volume terms. The usual expression used nowadays is 40 per cent. alcohol by volume. That is the usual strength or most of the so-called standard brands. As the Scotch Whisky Association represents virtually all whiskies, I must be careful not to mention one whisky and omit another. The standard labels, marked as 40 per cent. alcohol, will be known to hon. Members. Some products on the market have been watered down rather more to give a lower alcohol figure.
The product which I mentioned earlier which is contained in a 70 cl bottle is not such good value if one works out what it would cost if it were a 75 cl bottle. If one studies the label carefully, one will see that it is a 30 per cent. whisky. If we take out our calculators, as the hon. Member for Clackmannan (Mr. O'Neill) suggested, we find that the 75 cl bottle of 30 per cent. whisky costs £8.56, yet if it were 40 per cent. whisky it would cost about £11 a bottle; so the 30 per cent. whisky is not quite the good value which it appeared at first.
We do not propose a standard strength, but it is important to have a minimum strength, and that is precisely what the Bill would allow. It does not specify the strength, but is an enabling Bill which will allow the Minister to specify a minimum strength that will be agreed by the industry. The consumer will know exactly where he stands and people will not be misled about what they are buying. I cannot underrate the importance of the strength aspect. On the continent, whisky is sold at 30 per cent. or even 25 per cent. by volume, which must lower the standing of Scotch whisky in the market and harm it nationally and internationally. Whatever minimum strength is agreed, it does not follow that all producers will conform to that figure. Some will, but others may prefer to promote a prestige product that is above the minimum strength.
It should be made clear — my hon. Friend the Member for Harborough has misunderstood this—that almost anyone can produce whisky. Any of us could go out and buy grain whisky and some fillings from a malt distillery and produce our own Scotch whisky. I am sorry that my hon. Friend is not here. "Farr's Finest" has a certain ring to it.
§ Mr. Foulkes
That is not why I wanted the hon. Gentleman to give way. How does he reconcile what he is saying with the definition of whisky in the Finance Act 1969, which states thatthe expression 'Scotch whisky' shall mean whisky which has been distilled in Scotlandand says that it must be matured for three years in casks in warehouses.
§ Mr. Sims
I said that anyone is at liberty to blend and bottle his own whisky under his own label, but it must comply with all the requirements. If my hon. Friend wanted to produce "Farr's Finest", he would have to do it in Scotland, just as you would, Madam Deputy Speaker, if you wished to produce "Boothroyd's Best".
That is an especially important aspect of the Bill, which I warmly welcome for the reasons that I have given. The other provisions allow for a clear definition of Scotch whisky and ensure that only that product can be produced in Scotland. EEC regulations will be introduced to define whisky, but it will be different from Scotch whisky. My hon. Friend the Member for Tayside, North talked about Euro-whisky. Whatever its name, others may wish to produce it. Indeed, some products which are described as whisky are already produced and available on the continent. The important thing is that Euro-whisky should not be produced in Scotland. There could be much confusion between Scotch whisky and whisky produced in Scotland, and it would undermine the standing of Scotch whisky.
The Bill is good for the Scotch whisky industry and for Scotland. It is good for the United Kingdom because of the enormous export earnings produced by Scotch whisky. It is good for the consumer. On all those grounds. I urge the House to give it a Second Reading.
§ Mrs. Ray Michie (Argyll and Bute)
Like other Opposition Members, I do not suppose that I will often support a measure presented by the hon. Member for Tayside, North (Mr. Walker), but I am happy to support this Bill because, as we have heard many times today, it is of paramount importance to the Scottish whisky industry, especially in terms of employment and the export market.
Whisky is a matured, high-quality spirit and the success that it has achieved overseas has been due to its image, reputation and quality. Its image and reputation should not be put at risk. Indeed, they should be strengthened, and that is what we are about to do with the Bill. As the hon. Member for Tayside, North said, we need a definition that reflects more precisely current practice in the industry. It is especially important to allow no room for the argument that Scotch is a type of whisky that can be produced anywhere. Its acceptance as a generic or semi-generic description would lead to the emergence of peculiar brands. The hon. Gentleman mentioned Albanian whisky. We cannot allow inferior products to be sold on the back of the reputation that Scotch whisky has built up over many years. It is not anti-EEC to try to define Scotch whisky. We must try to protect our national product.
Whisky is Scotland's No. 1 value-added export and the industry provides direct employment for many people, not least in my constituency. The economic viability of Islay and Jura would be destroyed if the longterm future of the industry was threatened. Campbeltown 704 is an area of high unemployment and derives great benefits from its distillery. There is a significant spin-off in indirect employment, especially in the islands. On Islay, many people contract with the distilleries, and the ferry and air services are crucial. Five Islay distilleries provide housing for people in small communities. Draff, which is barley after normal malting, and cumins, which is the dry residue of barley after malting, provide local farmers with a high-protein cattle feed at a reasonable price. That helps them, because they need not import it, at high cost, on the ferry.
The distilleries are very much part of the life of the island. They provide amenities such as reception centres for the local people. Bowmore distillery has agreed to allow a surplus warehouse to be converted into the longed-for swimming pool and has said that the pool may be heated by the wastage heat from the distillery. That is good conservation.
As we have said already, the distilleries and their products make an invaluable contribution to tourism. The names of the distilleries are poetry. The names of the distilleries in Islay are sheer magic — Bruichladdich, Bunnahabhain, Coal Ila, Lagavulin and Laphroaig. I will help the Official Report with the names. The whisky is made there from beautiful, crystal-clear water, from the barley and from the peat that is burned at a special temperature which we will not reveal.
Of course, the Bill was not brought to the House to encourage overindulgence. Taken in moderation, as we have already heard, the spirit lives up to the real name for whisky—Uisge beatha—which means the water of life. Whisky is the water of life. It is used medicinally, not just as a sedative but as a vaso-dilator. As we heard from the hon. Member for Tayside, North, whisky has been immortalised in poetry by our national bard, and we have waxed lyrical about it today, perhaps because it is Friday and the weekend.
Yesterday I spoke about the Bill to someone in Islay who said that when a shopkeeper in Bulmore stands in front of his shop and sees smoke rising from the distillery, he knows that that means a good week for trade. If, God forbid, he saw no smoke for a long time, he would think about closing down. Whisky has been immortalised in poetry. The much-loved, late Angus Maclntyre of the island of Mull described in a poem the 1941 sinking of a ship called "The Politician", with a huge cargo of whisky aboard, which foundered off the island of Barra in the Outer Hebrides. It was also immortalised by Sir Compton Mackenzie in his famous "Whisky Galore".
I will not read all of the poem now—perhaps I will give a good rendering of "The Politician" another day—but the last verse—remember that the name of the ship was "The Politician"—reads:A Slainte—that means good health in Gaelic —now for Churchill,His name I proudly call,But the Barra politicianIs the greatest of them all.I, too, give my wholehearted support to the Bill.
§ Dr. Norman A. Godman (Greenock and Port Glasgow)
We have something of a travelling circus, but I am pleased to follow the hon. Member for Argyll and Bute (Mrs. Michie). The hon. Lady and the Minister of State, Scottish 705 Office were in my constituency on Tuesday at the very pleasant ceremony of the launching of the Caledonian MacBrayne ferry The Isle of Mull.
First, I wish to offer my compliments to the hon. Member for Tayside, North (Mr. Walker) on his fine Bill. The Bill, if it is passed, will give a solid measure of protection to an important Scottish product and industry. Every speaker today has emphasised the industry's importance to Scotland. At the same time, I have a good deal of sympathy with some of the comments and observations recently voiced by my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), and I sincerely hope that he manages to catch your eye today, Madam Deputy Speaker. I also hope—he may not thank me for this—that my hon. Friend will be selected to serve on the Committee. Where balance and analysis are concerned, he will play an important role of scrutineer and interlocutor or, perhaps some would say, inquisitor.
§ Dr. Godman
All hon. Members who have spoken in the debate have emphasised the importance of the whisky industry. Naturally, that view is shared by those who work in the industry and its ancillary industries. For example, distillers insist that they buy their barley from local sources, and that is the same for many other products used in the industry.
In common with other hon. Members, I have received a memorandum from the general secretary of the Scottish Trades Union Congress, Mr. Campbell Christie, in which he says:I am sure I do not need to spell out to you the importance of the whisky industry to Scotland, both in terms of direct employment and the vital export revenues which the industry brings us. You will also be aware that over the past few years the industry has gone through something of a recession, from which it is only now slowly beginning to recover.He goes on to offer a comment, with which I am sure we all agree:What is completely distinctive about Scotch whisky is its quality.The hon. Member for Gordon (Mr. Bruce), in a debate last year, gave us a very fine definition of the product. He said:Pure, good quality Scotch whisky can only be made in the right circumstances, in the right place — in Scotland." —[Official Report, 3 February 1986; Vol. 109, c. 122.]However, as the hon. Member for Tayside, North rightly sets out in the Bill, we need a much stronger definition. The hon. Member for Gordon welcomed the promise made by Guinness plc to establish its headquarters in Scotland. I know that the hon. Gentleman has strong views on that issue. When he spoke about that promise, he spoke in good faith. Unfortunately, Guinness subsequently responded with what the French call "mauvais foi", which, in plain English, we call bad faith. In my view, that company could repair to some extent its reputation in Scotland by taking a number of initiatives.
We know that the whisky industry, in order to survive, must export its product. As the hon. Member for Tayside, North said in his excellent opening speech, Scotch whisky is the most widely exported spirit in the world. That was confirmed in the recent Fraser of Allander report, which echoed what the hon. Gentleman said about the industry having an unmatched export record. Indeed, the Bill seeks, 706 among other things, to sustain and increase that remarkable export performance. Guinness, as the largest exporter of Scotch whisky, should, in my view, send its products abroad by way of Scottish ports. It was the company's avowed intention to use Scottish ports where adequate services were available. The chairman of Guinness and others in the Scotch Whisky Association should know that we have first-class services and facilities at Grangemouth, Dundee, Leith and other ports. Front Bench discretion prevents me from mentioning one first-class port — the Greenock container terminal on the lower Clyde — which has an excellent work force and fine facilities. I say to the chairman of Guinness and others, "Honour that intention and you will redeem some respect for your company in Scotland."
The Bill will be subjected to close scrutiny in Committee, but I wish briefly to comment on its clauses now. As the hon. Member for Tayside, North said, clause 1 is all-important because of the proposed EEC definition of whisky. The distinction between the definitions is, and should be, profound, and both consumer and producer must be given that degree of protection. As the hon. Gentleman pointed out, champagne has had a defensive ring around it in French law since 1934. I recall that champagne producers went to court in England a few years ago to defeat an invasion of so-called Spanish champagne—which some people say should be avoided. I shall not comment on that. I simply echo the comments of the hon. Member for Argyll and Bute about all things being "taken in moderation". After a fine meal, I recommend a malt rather than a continental drink such as cognac. I cannot recommend a brand, but malt is a finer way to end a meal than indulging in foreign drinks. There can be no objection within the EEC to our whisky being accorded the same legal status as champagne and cognac.
I think that I am right in saying that clause 2 causes my hon. Friend the Member for Carrick, Cumnock a rid Doon Valley understandable concern.
§ Mr. Foulkes
I hope to catch the eye of Madam Deputy Speaker later, but I would like to explain now that my concern is not that there should be a minimum—we all agree on that—but at what level that minimum should be set. A number of producers, including Glen Catrine in my constituency, produce an excellent blend of whisky —that is the important point—at 37.2 per cent. That is why we are arguing the case. The Scotch Whisky Association is still maintaining that the minimum should be 40 per cent. That is the only point of debate, because we all agree that there should be a minumum to protect the good blended whisky made in Scotland from the poor imitations coming from other parts of the world.
§ Dr. Godman
I have a good deal of sympathy with my hon. Friend's comments. Perhaps he would care to buy me a wee dram of Glen Catrine after the debate. The setting of a minimum level of alcoholic strength may well have serious implications for those whom my hon. Friend represents so admirably in the House. I hope that. the Minister will assure us that the Government will seriously and responsibly consult all interested parties before any decision is taken.
I wish to say only a brief word about clause 3, because I am anxious not to spend too much time at the Dispatch Box. We believe that in principle it makes good, sound sense.
707 The Bill reflects the serious concern that the hon. Member for Tayside, North has consistently shown for this important Scottish product and industry. I need hardly say to him that that watchful concern is shared by Opposition Members. I commend him on his Bill and wish it well.
§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Donald Thompson)
I wish to join in the congratulations to my hon. Friend the Member for Tayside, North (Mr. Walker) on bringing the Bill to the House and underlining the importance of the Scotch whisky industry. By doing so he has also initiated a great many after-dinner speeches on this Friday morning, and they have been very welcome.
I have no constituency interest to declare, other than that in Todmorden, Hebden Bridge —[Interruption.] Everyone else has mentioned just about every village in his or her constituency, so I will. In Todmorden, Hebden Bridge, Ripponden, Greetland, Norland, Brighouse and Rastrick, we all drink and appreciate whisky. That is why we are determined not to let Scotland slip away from the United Kingdom. We want to keep her firmly bound to us. We cannot do without either Scotland or its whisky.
Scotch whisky is probably the best known spirit in the world, and for good reason. The spirit is produced from cereals, and it can be made in many countries. However, there is only one Scotch whisky, and it is universally acknowledged to be the market leader. Some foreigners may wonder why that is so. I shall not dwell on the special characteristics of spring water, because the hon. Members for Moray (Mrs. Ewing) and for Argyll and Bute (Mrs. Michie) lyricised about that. There are many hon. Members better placed than I to do that. Nor will I hold forth on the enormous variety of shapes of pot stills and the subtle differences in the malt whiskies that were mentioned by my hon. Friend the Member for Dumfries (Sir H. Monro) — who has probably popped off to investigate some to them.
However, I will say that, while the industry is endowed with those natural and traditional characteristics, it is also extremely diligent in ensuring that the production techniques are faithfully preserved and that short cuts that might damage quality and lead to short-term profit are avoided. Of course, that does not mean that the industry is unwilling to move with the times—far from it. It has shown considerable marketing flair and has produced a wide variety of blends at varying price levels. In recent years, it has successfully developed and extended the luxury end of the market with single malts that are proving so popular with consumers worldwide. The quality that derives from the production and maturation techniques has been consistently maintained and never compromised.
§ Mr. Robin Corbett (Birmingham, Erdington)
The Minister also has responsibility for Wales. Although I agree with everything that he said in praise of Scotch whisky, will he also acknowledge that there is a growing Welsh whisky industry and that, provided that it stays in Wales, it poses no threat to the Scotch whisky producers of Scotland?
§ Mr. Thompson
I am glad that my hon. Friend the Minister of State, Scottish Office, is here. He will have 708 heard all the points made outwith the Bill this morning, which were genuinely concerned with specific Scottish issues. He will deal with those. It would be wrong of me to go down the Welsh path without having a Welsh colleague by my side to listen to the debate.
Scotch is sold in more than 190 markets and brings great export revenue. I was glad that the hon. Member for Moray did not tax me on how and where we are spending that revenue. Indeed, revenue used to be collected by Rabbie Burns himself—as I am reliably informed by my hon. Friend the Minister sitting next to me, although I am not sure whether he is actually on my left or my right. There is one major problem in producing virtually any product that is regarded as the best of its kind, and Scotch is no exception. It is the great temptation for others to counterfeit it and pass off different and inferior whiskies as Scotch whisky.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) mentioned the champagne battle. Although Spanish champagne is, of course, different from French champagne, it is quite nice and quite acceptable in its place —although not as acceptable as Scotch at any time.
The industry spends substantial sums each year identifying counterfeit practices throughout the world and seeking legal retribution in foreign courts. It does that to protect the good name of Scotch, on which the export success of the product so critically depends. The main purpose of the Bill is to support and underpin — the important word used by the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey) in his witty and wide-ranging speech—that effort.
Clause 1 of the Bill restricts the production of whisky in Scotland to Scotch whisky. I make no apology for repeating that. As my hon. Friend the Member for Tayside, North explained, the industry seeks that restriction because it foresees a real danger of lower quality whiskies conforming to the Euro-definition being produced in Scotland when the EC regulation defining spirit drinks is adopted. There is no doubt that such products legally marketed throughout the world as "whisky—produce of Scotland" would be bound to be confused with genuine Scotch and thus erode the quality image of Scotch on which its export success is built.
While recognising the genuine concerns, the Government would have preferred a rather less protectionist solution. One solution might have been to require better labelling, but this would have covered only the sales on the domestic market, leaving the major export market, which accounts for 80 per cent. of Scotch production, wholly unprotected.
§ Mr. Dick Douglas (Dunfermline, West)
I have tried to hear most of the speeches so far, although I apologise to the hon. Member for Tayside, North (Mr. Walker) for being absent for the earlier part of his speech. Could the Minister be a little more forthcoming about the Government's position on standard of strengths? Does it assist the Government to have whiskies marketed in the United Kingdom under the 40 per cent. proof mark? Would it not be better for the Government to state clearly that 40 per cent. is their bargaining position from which they will not be deflected?
§ Mr. Thompson
I understand the hon. Gentleman's concern, but if he will be patient I am coming to that question in a sentence or two.
709 We have also had to recognise that there is much competition between distillers and brands in the industry. The Government concluded that the only practical way to safeguard against the dangers that are foreseen is that proposed in clause 1.
The other main provision of the Bill is clause 2. The hon. Member for Clackmannan (Mr. O'Neill) clearly expressed the fears of those who are worried about minimum strength and weaker whiskies and the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)—I hope that he catches your eye, Madam Deputy Speaker—expressed a slightly different point of view. Clause 2 contains an enabling power to define Scotch whisky, and the definition will include a minimum alcoholic strength at the point of sale.
The minimum strength provision causes some concern among those who bottle Scotch whisky at strengths below the traditional 40 per cent. In answer to those concerns, let me make a number of points. First, the Bill does not specify a minimum strength, which is, in any case, currently under discussion with the EEC for all spirit drinks. The hon. Member for Clackmannan urged the EC to move a little quicker so that we may have that definition.
Secondly, there is general agreement among all the interests on the need to specify minimum strength at a level to be determined; everybody wants that nailed down. Thirdly, I assure the House that if the Bill is enacted the Government will wish to consult all those interested before moving to regulations.
§ Mr. Foulkes
Will the Minister specify that, if the Bill is enacted—I hope that he will still be the Minister then — the Association of Low Strength Whisky Producers will be consulted? Does he still have an open mind about what the minimum strength might be?
§ Mr. Thompson
It is an extreme form of flattery for an Opposition Member to hope that a Minister will continue to be a Minister. I had already made up my mind that I would consult widely, and those consulted will include the gentlemen to whom the hon. Gentleman refers. I have spoken to them before and I recognise their genuine fears. However, we must protect Scotch whisky; that is why the Government have decided to support the Bill.
§ Mr. O'Neill
The European directive will be in the context of an alcohol limit being set for a variety of drinks in the Community. Will the Minister bear in mind that the figures 35 and 37 are being bandied about for drinks emanating from other parts of the Community where that is the traditional strength? As the Minister said, 40 per cent. is the traditional strength of Scotch, and it would be wrong to set a figure that disregarded the normal practice of each country.
§ Mr. Thompson
As the hon. Gentleman knows, that does not come within the scope of the Bill. However, I shall bear in mind exactly what he said in making an order specifying minimum strength.
The Government accept the need for an enabling power. The clause also provides for Ministers to define Scotch whisky. This would replace the existing definition in the Finance Act 1969. The hon. Member for Argyll and Bute was right to say that the definition must be clearly understood. As my hon. Friend the Member for Tayside, North explained, the aim is to lay down a more precise 710 definition of exisiting practice. I assure the House that the Government will consult all interested parties before making an order. Hon. Members will note that it is intended that the enforcement of the measures should be through civil sanctions rather than the criminal law. That is thought to be more appropriate for the protection of the industry's interest.
I praise the Scotch whisky industry's initiative and energy in defending its interests world wide, as my hon. Friends the Members for Dumfries and Tayside, North explained. I thank them again. This has been to the benefit of the whole United Kingdom economy and not just the Scottish economy—in terms of exports, excise revenue and employment. The industry has good reason to be proud of its input to the EC's case to GATT on the liberalisation of the Japanese spirit market. The Government have lent their full support to this objective and, following the conclusions of the GATT panel, we will be looking to Japan to implement the panel's report in the near future.
Consistent with our overall support for the industry's exports, the Government will support the Bill, which we view as a practical measure that should help to ensure the future prosperity of the industry in Scotland.
§ Mr. John McFall (Dumbarton)
I am sure that on this occasion my constituents will forgive me for being on the same side as the hon. Member for Tayside, North (Mr. Walker). There is an exception to every rule, and this is, I hope, an unforgettable exception.
I thank the hon. Gentleman for referring to the fact that I came down to London overnight. I had a pressing constituency engagement yesterday but I came down overnight by train because the Bill is fundamental to my constituency and to the whisky industry in Scotland. The importance of the whisky industry for direct employment in Scotland and in earning valuable export revenues cannot be underestimated. Two thousand individuals in my constituency are directly involved in the whisky industry. I stand to be contradicted, but I do not think that any other hon. Member has more constituency interest in Scotch than I have. I shall not echo the poetic words of the hon. Member for Tayside, North. Is he the 20th-century bard or a pale imitation of William McGonagall? I leave hon. Members to decide that question.
During the recess, I visited many distilleries and bottling plants in my constituency. The overriding impression that I gained from such visits was of the sustained co-operation between management, workers and unions, to the maximum benefit of the entire industry. Thare are two major employers in my constituency. One of them is the IDV Company, whose plant is at Strathlevin bonded warehouses, and the other is Allied-Lyons, with its subsidiary, Hiram Walkers. I shall refer to Hiram Walkers because I visited that plant most recently.
As most of us know, Hiram Walkers produces Ballantyne's whisky, which has a unique worldwide reputation. During my visit to the plant, I spoke to management and unions and also examined the company's industrial relations record over the previous 10 years—a record which bears examination from any quarter. It was achieved by the direct involvement of workers and unions in the company's affairs. That is to be seen and recorded in terms of the Scotch whisky industry. Hon. Members should not take my word alone for that fact. This week, 711 I engaged in conversation with many individuals, such as the managing director of Hiram Walkers in Dumbarton, Mr. Cunningham, the convenor of shop stewards, Mr. William Moffat, and also the regional organiser of the General, Municipal, Boilermakers and Allied Trades Union in Scotland, Mr. Jim Morrell. They told me that there is full co-operation in the industry. That is why the industry is successful and has ridden through the recession of the previous few years. It is essential to recognise that union participation in the industry is important. If the hon. Member for Tayside, North can join with me along the way in regard to the Scotch Whisky Bill, I ask that he join me in underlining the fact that direct union involvement and participation in the industry is essential.
§ Mr. Bill Walker
I hope that I made it quite clear that the performance of the whisky industry was the direct result of co-operation between workers and managers. If I failed to do that, I have no hesitation in saying that it is an example to the rest of Scotland.
§ Mr. McFall
We all know that the trade is under threat as never before. There is competition from a wide range of drinks, especially wines and light spirits. We do not want others to sell inferior products on the back of the reputation of Scotch whisky. That message must go out loud and clear.
With the legislation, we want to demolish the argument that Scotch whisky can be produced anywhere as a Scotch-type whisky. That is not and cannot be allowed to be the case. Scotch whisky is essentially geographical in the same way as cognac and champagne in France. We look for equivalent legislation to protect our basic industry.
The prohibition of production in Scotland of whisky other than Scotch whisky cannot be over-emphasised. For generations, Scotch whisky has enjoyed a unique status throughout the world. It has been marketed to produce an image—for example, water being poured through peat bogs to give Scotch whisky a special, peculiarly Scottish quality. I refer also to the maturing process. Whisky is stored in special kegs for years. That has helped to create an almost mythical quality about the drink.
In supporting the Bill, I suggest that we shall help to preserve the purity of Scotch whisky by providing a legal definition for the spirit. We shall sustain the reputation of the image, sales, and—I declare a constituency interest — a great many jobs in Dumbarton. Like other hon. Members, I congratulate the hon. Member for Tayside, North on the prescience that he showed in introducing the Bill. I wish him well.
§ 12.4 pm
§ Mr. John McAllion (Dundee, East)
I am very grateful to you, Madam Deputy Speaker, for allowing me to take part in this important debate. The importance of the debate is reflected in the number of Scottish Members who have taken the trouble to stay behind in Westminster today to lend their support to the Bill introduced by the hon. Member for Tayside, North (Mr. Walker). I do not say that in a light fashion. Scottish Members in particular do not wish to stay in this place any longer than they absolutely have to. We have many important constituency interests with which we could deal in Scotland today. It 712 shows the importance that we attach to the matter that we have forsaken such interests to stay here to take part in the debate.
The statistics of the Scotch whisky industry speak for themselves. There are 16,000 employees in 100 distilleries and associated blending and bottling plants. The industry is one of the most significant export earners of the United Kingdom. As many hon. Members have said, sales of Scotch whisky in 1985 were worth £1,000 million.
It is not just a matter of statistics. It is important also to recognise that, as North sea oil production decreases in significance, we shall need to fill the consequent gap in the balance of trade and the balance of payments. Scotch whisky has been making a growing contribution to our balance of payments over recent years, in spite of its own troubles, and it is vital that it continues to do so. We must never forget that Scotch whisky is Scotland's main export and it undoubtedly needs and deserves the protection that the Bill seeks to give it.
Many hon. Members have direct constituency interests in the further progress of the Bill. I am not least among them. In my constituency Stewart's Cream of the Barley has a major plant than turns out more than I million cases of whisky every year and employs more than 100 workers. It is the brand leader in Northern Ireland and is in the top six in Scotland. It is expanding its overseas markets in France, Canada, Norway, Italy, Japan and elsewhere. It is clearly in my constituency's interests that I should do what I can to protect jobs and the production of whisky in Dundee. It is equally in the interests of other hon. Members to pursue their constituencies' whisky-related interests. I hope that hon. Members who do not have a direct constituency interest — the Minister mentioned that he was one—will still realise the importance of supporting such a major Scottish industry. For example, employment in the whisky industry dwarfs that in the Scottish steel industry. We must not lose sight of that fact. The protection of the Scotch whisky industry is a matter of vital interest to Scotland and the United Kingdom as a whole. I hope that all hon. Members will realise that fact and will see the significance of lending their support to ensure that the Bill makes progress.
The industry is confronted by a range of problems, many of which are beyond the scope of the Bill. Prominent among those problems is the growing competition from other drinks, containing more or less alcohol, which is allied to the problems of controlling the quality and protecting the image of whisky as a product on the world market. I think that everyone agrees that little if anything can or should be done in legislation to protect Scotch from fair competition.
We all recognise the market problems that affect Scotch whisky. In the 1960s and 1970s, for example, as sales grew, apparently without end, there was undoubtedly complacency among the management of the industry that that growth would continue indefinitely with little or no effort on its part. At that time, stocks continued to be laid down for sales that were anticipated as long as eight years in advance. Therefore, when growth stopped at the end of the 1970s, there was an accumulation of unsold stocks. That led to overproduction, which led to closures, layoffs and short-time working. The industry must sort out those problems itself, with the support of all those who are anxious to see its future guaranteed.
There is competition from wines and light spirits and even from the new American-based craze for coolers. That 713 is natural and acceptable, and requires a commercial response from the industry. Equally, the industry must come to terms with the increasing tendency among consumers to turn away from alcohol altogether. Actions to discourage drinking and driving and to encourage moderate, rather than excessive, consumption are not only realities to which the industry must face up, but are developments which all responsible opinion should welcome and support, as I am sure the Scottish whisky industry does.
We should be clear on what the Bill is not about. It is not about feather-bedding the industry and trying to protect it from fair competition or about turning a blind eye to the many serious social and health problems that affect the drinks industry. It is about seeking to protect the quality and image of one of our most important manufacturing products which creates desperately needed employment and wealth for this country.
The growth in sales of significantly under-strength whisky must be a matter of concern to everyone who wishes to support the integrity of our national product. Until recent years there was never any doubt about the quality of the product that was on offer when one paid for a bottle of whisky, although one might have moaned about the price. Indeed, I can remember my father singing, "Twelve and a tanner a bottle", at Hogmanay with tears running down his face. However, I must admit that I think that he was referring to an earlier time.
We may also moan about the measure in which the whisky is sold across the bar. However, I do not think that any of us doubted what we were getting when we paid our money in bars and off-licences. Sadly, that is no longer the case, especially overseas. I accept that the United Kingdom market is different from the overseas market. In France, for example, whisky products of well below even the 30 per cent. proof level are sold to consumers via supermarkets. We must confront that serious problem.
The drinks market is an increasingly competitive environment. New and cheaply produced drinks flood on to the market in competition with the more traditional products, such as Scotch whisky. On one level, it is obvious that the increased competition requires a commercial response from the industry. However, before any such commercial response can be made, it is important that Scotch whisky is clearly and specifically defined so that consumers know what it is and how it differs from other spirit-based drinks.
Without a proper definition of Scotch whisky, there is a danger that more whisky-type products will come on to the market, many of which will bear little or no resemblance to the real, traditional product, but will, nevertheless, be marketed under the brand name of whisky. As the hon. Member for Tayside, North pointed out, it may be marketed as "whisky, a product of Scotland". That would lead to unacceptable confusion in the market place, where consumers would not know what they were getting for their money. Serious damage would be done to the reputation and sales of Scotch whisky and that would directly affect our national interests.
Therefore, to defend itself, the industry requires a clear definition of Scotch whisky. I believe that all hon. Members who are present agree that an agreed minimum alcoholic strength limit is required to guard against the widely varying alcoholic strengths of other whisky-type products on the world market.
§ Mr. Corbett
I understand exactly what my hon. Friend is arguing in terms of minimum strength. However, will he bear in mind that if clearly labelled lower-strength whisky were available, it might make some contribution to dealing with the medical problems of alcohol abuse and misuse and especially that of under-age drinking?
§ Mr. McAllion
I am not certain that the labelling of under-strength whisky would make any contribution to the health and social problems that are associated with the drinks industry. I do not accept my hon. Friend's point. There is a need for an agreed minimum alcohol level for Scotch whisky. I understand the anxieties about the Scottish firms that produce whisky with proof levels slightly below the traditional 40 per cent. that is generally supported by the industry.
In common with most hon. Members, I support the retention of the 40 per cent. proof level. However, whether that level is 40 or 37.2 per cent. is not the issue— that can be solved at a later date. We must give Ministers the ability to establish a minimum alcoholic strength for Scotch whisky when they conclude their negotiations with the EEC. It is vital that when consumers buy Scotch whisky they can perceive that it is a product with a minimum alcoholic strength and that anything below that strength is not Scotch whisky.
I find myself in the strange situation of agreeing with the hon. Member for Tayside, North. Normally, there is little that he and I agree on. However, I am greatly encouraged that, for once, the hon. Gentleman has introduced legislation that supports the official policy of the Scottish Trades Union Congress. At its last conference, the STUC published a policy document:Scotland, A Land Fit for Peoplewhich stressed the urgency of establishing a legal definition of Scotch whisky to protect its quality and, in particular, to protect it from the growth in the sales of under-strength whisky.
§ Sir John Farr
The hon. Gentleman said that he thought that a minimum level should be set and he referred to a possible level of 37.2 per cent. However, the hon. Gentleman will be aware that some successful low-alcoholic whiskies are below 35 per cent. Does the hon. Gentleman believe that he is right to say that the figure of 37.2 per cent. should be the recommended minimum?
§ Mr. McAllion
I understand that two proof levels of Scotch are on sale in the domestic market. The majority are 40 per cent. proof, and the 37.2 per cent. proof whiskies include High Commissioner and other brands. There are no other whiskies on sale in the domestic market and low-alcoholic whiskies are clearly labelled as such. The problem arises in the world market with Japanese and French products that have a 28 or 25 per cent. proof level. They sell under the label of whisky and we must combat that.
I am delighted that the hon. Member for Tayside, North, having won the ballot for private Members' Bills, has introduced a Bill which supports STUC policy. I am sure that that reflects his earlier career as a trade unionist in Dundee when he was on the buses.
The Chamber has become something like poets' corner today. We have had repeated references to the national poet, Rabbie Burns, the Ettrick poet James Hogg and the Barra poet—I assume that the hon. Member for Argyll and Bute (Mrs. Michie) was referring to the island rather 715 than the market place in Glasgow. However, I was offended when my hon. Friend the Member for Dumbarton (Mr. McFall) made a comparison between Dundee's national poet, William McGonagall, and the hon. Member for Tayside, North. McGonagall would be deeply affronted to find himself compared to a Tory Member of Parliament. I know that McGonagall was a great supporter of our national drink. Had he been alive today and seen the threat faced by our national drink, he would have put pen to paper in support of protecting the quality and the image of Scotch whisky. I hope that we will all get behind McGonagall and support the hon. Member for Tayside, North.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Earlier the Minister said that this has been an interesting and entertaining debate, and I believe that we must primarily thank my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) for that. In some ways, this has been a topsy-turvy "Alice Through the Looking-Glass" debate, because my hon. Friends have found themselves having to support the hon. Member for Tayside, North (Mr. Walker). My hon. Friends' commitment to the Scotch whisky industry is shown by the fact that they are able to swallow not the whisky, but their temporary association with the hon. Gentleman.
The debate has been a bit topsy-turvy, because until now only the hon. Member for Harborough (Sir J. Farr) —a Conservative—has argued the case on behalf of the excellent Arden House whisky produced by the CWS. As some of my hon. Friends have pointed out, to have a teetotaler from Tayside quoting Burns in favour of whisky, instead of McGonagall, is also somewhat unusual. My concern and that of a number of my constituents and the Association of Low Strength Whisky Producers relates to clause 2(1)(b). That is the only part that creates any problems.
Before I elaborate, I declare three interests, none of them pecuniary. First, I have the blending and bottling plant of Glen Catrine in my constituency. One of its directors, Graham Taylor, was part of a deputation that the Minister met earlier this week. All members of that deputation said that they had nothing but courtesy and kind consideration from the Minister. I am grateful to him for that. Glen Catrine produces High Commissioner whisky at 37.2 per cent proof. That is an excellent blend of whisky. The plant also produces another whisky called Glen Catrine at 40 per cent. proof. It is exactly the same, with a little less water added to it. The blend and the quality are the same—only the amounts of water and alcohol are different. One hundred and forty employees depend on Glen Catrine for their employment. As my hon. Friend the Member for Kilmarnock and Loudoun and the Minister, who repesents part of the area, know, the Cumnock and Sanquhar travel-to-work area has the highest level of unemployment in Scotland. So the jobs at Glen Catrine are vital to my constituents. I am sure that my hon. Friends understand that.
I am a Co-operative-sponsored Member of Parliament, but I receive no financial assistance from the society, as my hon. Friend the Member for Dumbarton (Mr. McFall), who is also sponsored by the Co-op, knows well. The Coop produces Arden House, that excellent blend of whisky, 716 at 37.2 per cent proof. While on the subject of the Co-op, I reassure my hon. Friend the Member for Clackmannan (Mr. O'Neill) that it is as concerned about consumerism and protecting the interests of the consumer now as when he first joined the Leith Provident, or read the messages there for his mother, before it was taken over by St. Cuthbert's some years ago. I hope he will accept that assurance from me.
I have another constituency interest. William Grant's blending, bottling and distillery firm is in my constituency. It is concerned about the Bill, as a member of the Scotch Whisky Association. It is one of the few family firms still producing Scotch whisky and still based in Scotland, unlike many of the others that have been referred to— Guinness, Allied-Lyons and all those multinational, huge conglomerates that are based outwith Scotland. Grant's headquarters and operations are in Scotland, and it is an excellent firm. I would not wish anything in the Bill to harm the interests of Grant's. It provides employment in the Girvan travel-to-work area, which has the third highest unemployment level in the whole of Scotland. I am equally concerned about that. I have to weigh in my mind, as I hope all hon. Members will weigh in their minds, the interests of the producers of 40 per cent. proof whisky as well as the interests of the 37.2 per cent. proof producers.
§ Mr. O'Neill
I am listening with interest to my hon. Friend, but I am still waiting for justification for the 2–8 per cent. reduction in alcohol content. As I understand it, the only justification is that it enables the product to be sold more cheaply in order to undercut the standard-rated whiskies.
§ Mr. Foulkes
I shall come to that point. My hon. Friend has sat through the whole of the debate so far and I shall be here until the end of it.
Having declared my three interests, I should like to ask one or two questions that I hope the hon. Member for Tayside, North will answer when he replies to the debate. What is the purpose of the Bill, except in relation to minimum strength? Questions have been asked and statements made about that, but there has been a lot of padding and paraphernalia. In an intervention I mentioned the current legislation about Scotch whisky. The hon. Member for Tayside, North will know that that legislation followed the report by a Royal Commission in 1909. The most recent legislation is contained in the Finance Act 1969. That makes quite clear the current legal definition of Scotch whisky. It says:Spirits which have been distilled from a mash of cereals which have been:(i) saccharified by the diastase of malt contained therein with or without other natural diastases approved for the purpose by the Commissioners of Customs and Excise".That control by Customs and Excise is important to maintain the quality of Scotch whisky. That control is the same in the Glen Catrine distillery as it is in the William Grant's and in all the other distilleries. The definition goes on:(ii) fermented by the action of yeast; and(iii) distilled at less than 166.4 degrees proof in such a way that the distillate has an aroma and flavour derived from the materials used, and which have been matured in wooden casks in a warehouse for a period of at least three years.717 As my hon. Friend the Member for Clackmannan and other hon. Members have said, the three-year storage and maturation in sherry casks are important elements in the quality of Scotch whisky.
About the Scottish element in Scotch whisky, the Act says:—The expression "Scotch whisky" shall mean whisky which has been distilled in Scotland.'That is the current legislation and the Bill adds nothing to it.
As my hon. Friend the Member for Clackmannan said, the Bill should contain sanctions against those who export malt whisky in bulk. That includes members of the Scotch Whisky Association. Some of those people are double-talkers because they say that they are out to protect Scotch whisky and its reputation abroad, but they export the malt and make possible the production of imitation Scotch whisky by countries that use that malt. It is quite intolerable that the people who are responsible for undermining Scotch whisky by bulk exports should question good Scotch whisky that is made, bottled and blended in Scotland. If the Bill contained sanctions against that it would have my enthusiastic support.
The hon. Member for Tayside, North knows that there are not many real jobs in the distillation of whisky. The hon. Member for Moray (Mrs. Ewing) represents a part of the country in which I grew up. I know the area, although I was a bit too young for whisky when I lived there. She knows that most of the jobs in the industry are in blending and bottling and in the supply of bottles, labels and boxes. It is the blending and bottling that we must keep and develop in Scotland as well as the distilling. The real damage to the reputation of Scotch whisky is caused by bulk exports, and the Bill does nothing about those.
I have a letter dated 12 November from Colonel Bewsher of the Scotch Whisky Association. I have not met him recently but I have had discussions with him in the past. The first and, presumably, most important reason that he gives for the Bill, which the hon. Member for Tayside, North has introduced at the request of the Scotch Whisky Association, is to move the definition in the Finance Act 1969 to a more appropriate locus. That is a strange reason. Perhaps the hon. Gentleman can tell me why such legislation is more appropriate in a private Member's Bill than in a Finance Act.
1 conclude that the whole purpose of the Bill is to set the scene for the introduction of a minimum alcohol level or to give the Secretary of State the necessary powers. As I have said, I am not opposed to that, but I have my suspicions, because I know that the Scotch Whisky Association wants the alcohol level to be set at 40 per cent. —a call that has been repeated by some hon. Members today. I think that the reason is nothing to do with cheap whisky coming from or being sold overseas, using malt that has been exported in bulk. In some cases, the association has been party to that. The reason is that the giants of the Scotch Whisky Association, which have included such names as Guinness, Allied-Lyons, Argyll and Lonrho, are the real owners of the Scotch whisky industry. The people of Scotland are not the owners, except in the case of firms such as Grant and Glen Catrine.
The giants want to squeeze out the small producers, such as Glen Catrine, which are successful in producing good-quality whisky with an alcohol level of 37.2 per cent. Glen Catrine has a 7 per cent. share of the whisky market, and is very popular. High Commissioner has become the 718 14th most popular brand in this country, without the help of advertising, simply because customers demand it in the shops.
§ Mr. Corbett
I understand my hon. Friend's feeling about the availability of whisky with less than 40 per cent. alcohol. Is he satisfied, however, that everyone who buys the brand that he has mentioned knows that he is buying an under-strength whisky, or does he believe that steps should be taken to alter the marking on the label to make absolutely sure? Does my hon. Friend think that some publicans may attempt to sell under-strength whiskies in their bars as full-strength whiskies?
§ Mr. Foulkes
I agree about the labelling. At present, the labels say that the whisky is under strength, but not in very large print. As I believe was mentioned by the hon. Member for Harborough, the figures showing alcohol by volume are also not very large, and I would support action to remedy that. The consumer movement, the Co-op and other producers would certainly agree.
As for the publicans, some of them get up to all sorts of tricks. In Scotland, however, many people who go into pubs ask for whisky by name, and they know the brand and the strength of the whisky that they are given. I am not so sure about English consumers; they are so sophisticated that they put all sorts of things into their whisky. I recently saw someone put Coca-Cola into it, which is a frightening thought.
Like my hon. Friend the Member for Dundee, East (Mr. McAllion), I do not want the alcohol level to fall below 37.2 per cent. Problems arise with lower-strength whiskies. However, I am talking about good-quality blends. The hon. Member for Harborough mentioned the Which? survey, which showed that some of the most popular brands with experienced whisky tasters were the lower-strength whiskies with an alcohol level of 37.2 or 37.5 per cent., because they were such excellent blends. Some people may have seen yesterday's report in the Daily Record in which Scotsmen said exactly the same.
I have a more recent example than that, as my hon. Friends the Members for Dundee, East and for Kilmarnock and Loudoun know only too well, because at my kind invitation earlier in the week they came to taste and test whisky at 40 per cent. and 37.2 per cent. They enjoyed both brands and could not tell the difference between them. Much to the surpise of my hon. Friend the Member for Kilmarnock and Loudoun, he got it completely wrong. That surprised me as well.
§ Mr. McAllion
It would be unfair of my hon. Friend to mislead the House. He said that my hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) and I were unable to distinguish between the two strengths. In fact, we were able to make the distinction, but we got things the wrong way round.
§ Mr. Foulkes
I am grateful to my hon. Friend for underlining my point and making it clear to the House that he thought that the better whisky of the two was the low-strength whisky. I can assure the House that the tasting took place early in the morning and that my hon. Friend had not been drinking before the tasting.
I think that the House should be worried by the precedent of enabling legislation containing such wide powers. I have great respect for the Parliamentary Secretary, but he will not always be in his present position. 719 I hope that he is the Parliamentary Secretary for as long as the Government are in power, but I hope also that that will not be for very long. I am sure that the hon. Gentleman understands that qualification.
Why is 40 per cent. the magic level? I am grateful to the Minister and to the hon. Member for Tayside, North for not arguing that it should be so considered, but that has been the argument of one or two of my hon. Friends and of the Scotch Whisky Association. The Sale of Food and Drugs Act 1875 and the Licensing Act 1921 specified a minimum strength for whisky of 35 deg. under proof. The hon. Member for Tayside, North will know that that is 65 deg. proof. This minimum is applied to whisky, gin, rum, brandy, and vodka. It was the tradition to bottle at three strengths, which were 65.5 deg., 70 deg. and 75 deg. As we have adopted the new definition of alcohol by volume, these strengths have been converted to 37.5 per cent., 40 per cent. and 43 per cent. In some instances 37.5 per cent. has become 37.2 per cent., which is nearer to 37.14 per cent., which is the exact equivalent of 65.5 deg. proof.
§ Mr. Bill Walker
I hope that the hon. Gentleman will remember that in my introductory remarks I said that I understood that the strengths now in use substantially throughout the industry are the result of experience of selling the product and retaining its quality worldwide. That is the essential element that underlies everything in the Bill.
§ Mr. Foulkes
I am grateful to the hon. Gentleman.
Some 43 per cent. whisky is still produced. There are some who like stronger whisky and ask for it deliberately. That is their preference. Duty is calculated on the absolute alcohol level, which means that duty is much higher on 43 per cent. whisky than on that imposed on 40 per cent. and 37.5 per cent. whisky. That makes the lower-strength whiskies cheaper, and that means that a bottle of low-strength whisky can be bought for less than £6. In some instances that is the only way in which people can afford to buy a bottle of whisky. If it is always to be produced at 40 per cent., and only 40 per cent., there will be some who will not be able to buy it. Witness the growth in the sales of High Commissioner, Arden House and other low-strength whiskies.
As one who wishes to encourage people to drink whisky, I recognise that the product has now to compete directly with vodka, Bacardi and other modern and, unfortunately, increasingly popular drinks. For the miner in the working men's club, the girl in the dance hall, or whoever, it is sometimes the price of a drink that has a particular attraction.
At present, Bacardi is the largest-selling drink in the world, selling 229.2 million bottles at 37.5 per cent. proof. Smirnoff vodka is the second largest, selling 169.2 million bottles also at 37.5 per cent. proof. Surely so long as whisky is a good-quality blend, it should be allowed to compete in one form in the same market as Smirnoff vodka and Bacardi.
The hon. Member for Tayside, North, again in an intervention, spoke about exports and the world market. Not all whisky which is sold abroad is at 40 per cent. I have here a label, not for Glen Catrine or CWS whisky, but for the whisky of a member of the SWA—for Haig's fine old Scotch whisky produced at Markinch in Scotland and guaranteed wholly distilled and matured in Scotland. 720 Unfortunately, it is bottled in Australia. This Scotch whisky, produced by a member of the SWA, has 37.5 per cent. alcohol by volume. I am led to believe that Australians are as hard drinkers as the Scots. Why is 37.5 per cent. the alcohol level for whisky in Australia? It is presumably because it is popular and Australians want to buy a bottle of whisky at a reasonable price. Haig is satisfying that demand in this particular case.
§ Mr. Bill Walker
The hon. Gentleman, whether deliberately or unintentionally, is again suggesting that this particular brand sold in one particular country reflects the 85 per cent. of our exports. He knows that is not true. May I remind him that in an earlier intervention I mentioned different climatic conditions as a variable, and the conditions in Australia are different from those in north America?
§ Mr. Foulkes
I was not seeking to mislead the House; I was merely saying that all whisky exported is not at 40 per cent. A large amount that goes to Australia is at 37.5 per cent.
The Association of Low Strength Whisky Producers is arguing to give customers a choice between 37.5 per cent. or 37.2 per cent., 40 per cent. and 43 per cent. Why not have different-sized bottles? We could have litres, 75 cls and 70 cls bottles. What is important is that the bottle is clearly labelled and there is no attempt to confuse customers. I would support any legislation or regulation which ensured that there was no attempt to confuse or to cheat customers. Bottles must be labelled absolutely clearly.
The SWA in its letter stated:there was a need to tighten the definition … to reflect … current practice."Current practice" includes 37.2 per cent. and 37.5 per cent. Seven per cent. or more of whisky consumed in Britain is at that level, and there is an increasing demand for it.
I agree with the SWA that we do not want widely differing strengths. We do not want the 30 per cents., the 25 per cents. and Albanian whisky. I even received a bottle of Argentinian whisky the other day, for reasons which hon. Members may guess. Fortunately, I did not drink it, but gave it to someone as a present. [HON. MEMBERS: "Typical."] Yes, it is typical.
I would not object if we set one of the three acceptable levels as the minimum, and I know that the Minister has some ideas on this. Indeed, that would not in any way harm the production of Grant's excellent whiskies and the other excellent whisky about which hon. Members have spoken. I do not understand why anyone—I hope it is not the hon. Member for Tayside, North—including the Scotch Whisky Association, is trying to squeeze out Glen Catrine. What can anyone have against an operation that is providing jobs in my constituency? What can anyone have against CWS or Edward Butler? Those are three of the main producers of slightly lower-strength whisky.
§ Mr. McKelvey
I believe that there are people who drink High Commissioner because they like the flavour of it, but my hon. Friend should reflect on this. If all whiskies were set at the minimum level of 37.2 per cent., which equals the proof of High Commissioner, would not the advantage that it now has over the market disappear? Alternatively, is my hon. Friend confident that, because those people buy by taste, they would continue to buy High Commissioner?
§ Mr. Foulkes
My hon. Friend has made a good point. The whisky at Glen Catrine is produced at two levels. At 37.2 per cent. it is called High Commissioner and at 40 per cent. it is called Glen Catrine. Glen Catrine whisky sells well to people who can afford to pay for that higher-strength whisky. I am confident that it will continue to expand. It would be open to members of the SWA to produce lower-strength whisky as well as to compete directly against High Commissioner and Arden House. We would have to accept that. It would be perfectly understandable if they did that. There is a market for it as long as it is a good-quality blend. All that it contains is a little more water, but it is still a good quality blend, as I think my hon. Friend the Member for Kilmarnock and Loudoun agreed when he had a drop of it the other day.
We want Glen Catrine to expand and develop. Unemployment is at 28 per cent. in the Cumnock and Sanquhar area. There is potential for expansion and development, and I hope that it will not be strangled because of the vested interest of the big boys in the SWA, the headquarters of which and almost all of whom are domiciled out of Scotland. We are all concerned about that. I commented about Guinness recently. I think that the hon. Member for Tayside, North had some appropriate things to say about Guinness.
§ Mr. Bill Walker
I am sorry to interrupt the hon. Gentleman once more, but I hope that he will remember that I have had substantial support from Opposition Members for any activities in which I have been involved in the Scotch whisky industry in the past. I hope that he will also remember that one was an Opposition Front-Bench spokesman.
§ Mr. Foulkes
I never forget those things. I am grateful to the hon. Gentleman for underlining that.
I am grateful to the Minister for saying that he has no set view about what the minimum level should be. It is just a matter of the principle of setting that minimum level. I know that he has given sympathetic consideration to the views represented by the Association of Low Strength Whisky Producers. He gave me an assurance that if the Bill is enacted, he will consult that association. I am sure that that consultation will be genuine. Opposition Members have been concerned about consultation in education and other areas recently, where no account has been taken of the views represented. However, I am sure that the Minister will take account of the various pressures. I am keen to find any way to outlaw the low level that is giving Scotch whisky a bad name.
I hope that I shall have the opportunity to table one or two amendments in Committee to see whether we can give some protection in law to the people and the interests that I represent. If proper account is not taken of those considerations in Committee, I shall hope to talk at greater length at a later stage, and not just make a short contribution as I have done today. On that basis, I should not press to total opposition the concern that I have about one part of the Bill, which was introduced by the hon. Member for Tayside, North and is supported by so many of my hon. Friends.
§ Mr. John Browne (Winchester)
I congratulate my hon. Friend the Member for Tayside, North (Mr. Walker) and the sponsors of this outstanding Bill. For an English 722 Member, this has been a very interesting debate — I might call it positively picturesque. I enjoyed the description of the whisky-laden air in the village of the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey). Some people say, "Oh, to be in England," but many people would echo my thoughts of, "Oh, to be in Kilmarnock," when I heard that.
It is with a certain trepidation that I rise to speak, even briefly, in a debate which has essentially been a Scottish debate. But aside from the fact that my late mother was a Black Douglas and I have an "e" on the end of my name, my only reason for speaking is as an English Member, many of whose constituents are consumers. In Winchester and Alton, for example, and in many other constituencies, there are enormous numbers of consumers of whisky who have a great interest in ensuring that the standard of Scotch whisky is maintained. Not only do they enjoy drinking whisky at home, but when they order Scotch—which is a worldwide name of standard and quality—they expect that quality even when they are abroad.
I strongly support the Bill. I do not see it as featherbedding. I see it as enhancing quality. I think that it will be widely supported even outside the production side in Scotland itself.
May I close by referring to the poem that was so beautifully quoted by the hon. Member for Argyll and Bute (Mrs. Michie)? I feel sure that the late Sir Winston Churchill would agree entirely with the poet. I congratulate my hon. Friend the Member for Tayside, North and wish him all good luck in the further progress of the Bill.
§ Mr. Harry Cohen (Leyton)
I congratulate the hon. Member for Tayside, North (Mr. Walker) on winning first place in the ballot and on introducing this Bill. He has shown much dedication to the subject. I know that we are not supposed to mention names in the Chamber, but it is wholly appropriate for someone called Walker to introduce a Bill on Scotch whisky. His mother must have made a mistake when she called him Billy instead of Johnny. My only criticism of the hon. Gentleman is that he did not lay on a tasting for hon. Members. Indeed, I criticise my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) for not extending to other hon. Members the general tasting that he mentioned so that we could all have spoken in a more expert way in the debate.
This is an important Bill because the whisky industry employs about 16,000 people. I have a constituency interest in that many of my constituents like to drink Scotch in the pub. Indeed, one of them especially—my wife—likes a wee dram. She told me that she got the taste for Scotch when she first came to London in 1977 in the mayor's parlour. I was a Waltham Forest councillor then and I took her into the mayor's parlour, where she was offered a whisky. Now that my local authority is under such financial restrictions from the Government, including rate capping, anyone going into the mayor's parlour would be lucky to get a glass of designer water, let alone a glass of Scotch. This is a serious point. Rate capping has an adverse effect on the Scotch whisky industry, because if it was still served in the mayor's parlour, more people might get a taste for it and become hooked on it.
723 My wife likes to mix her whisky with a drop of dry ginger. I asked her whether, because she mixed her drink, the inferior strength brands made any difference. She said, "Oh no, no, no, everyone can clearly tell the quality of the Scotch in a mixed drink." I merely throw in that point for the House to consider when discussing strength and quality, because it is as important to protect the quality.
I am concerned about the influx that might occur under the new EEC regulations. Indeed, I understand that even Japan wants to expand its Scotch industry—although it is a strange name for a Japanese whisky. We must block any threat to the Scottish industry and the quality of Scotch whisky.
The EEC definition of "spirituous beverages" permits the use of substances such as synthetic enzymes. As all experts know, the Scotch whisky produced in Scotland certainly does not include that process. Euro-whisky will diminish the quality of Scotch. As the Scotch Whisky Associaton has rightly said, it could be dangerous and confusing. It will be cheaper than, but inferior to, Scotch whisky. It is important to take that into account when discussing the Bill.
Lower strength Euro-whiskies in pubs could be a nightmare for trading standards officers. The Local Authorities Co-ordinating Body on Trading Standards said:The law at the moment is so lax and the descriptions are so vague that it almost comes into the area of unfair trading." It wants better controls.The Sunday Times of 8 November, under a headlineWeak whisky cuts no ice with Scots",described lower strength whisky asa drop of the soft stuff.It said:Trading standards officers also warned that the new Scotch could be sold in pubs as full-strength whisky at full-strength prices. The clear temptation will be for unscrupulous landlords to display the bottle on the dispenser with the label out of view.The Sunday Times said that it had consulted an expert, who said that, although it was not the same quality Scotch, it had very clever labelling.
§ Mr. Corbett
I am currently sitting on the Licensing Bill Committee. Does my hon. Friend accept that, if landlords try to mislead customers in the way that he has suggested, it will be an offence? However, I absolutely accept what he said about the difficulties of councils in employing proper numbers of trading standards officers. Will he comment on a point that I have already raised a couple of times? Are there not advantages in having less than 40 per cent. proof whisky, provided that that is clearly stated on the label?
§ Mr. Cohen
I shall indeed deal with the point about lower strength whiskies. It is right that landlords should be prosecuted if they breach trading standards law. Indeed, the Sale of Food and Drugs Act 1875 still applies because it lays down that the product sold should be of the nature, quality and substance demanded.
Unscrupulous landlords may endeavour to get away with it and the difficulty is catching them. When one goes into a pub and asks for a pint of beer, the barman or bar lady sometimes says, "OK," and goes round to the other bar to pour out the drink out of sight. There is a distinct danger of that happening with whisky if the landlord is 724 unscrupulous. Indeed, we could replace the famous workers' song about the man who watered the workers' beer with a song about the very fat man who watered the workers' whisky.
The expert quoted in the Sunday Times said that the weaker whisky would not fool a true Scotsman but that it would fool many English, and, I suppose, Welsh, men and women.
That would be unfair to the public, as well as being a nightmare to trading standards officers trying to implement the rules; it would make their job much harder. While sales of weaker whisky could be a source of easy profit for unscrupulous landlords, they could damage the long-term interests of the stronger Scotch industry as a whole. I am worried about that aspect of low-strength whisky sales.
I have heard the controversy about lower-strength whisky this morning, but I think that we could find a way out of this problem in Committee. Let me throw in my suggestion. A three-tier system could be put into operation quite easily. The first category would include Scotch whisky of 40 per cent. proof or more, which is proper Scotch of the best quality. The second tier could consist of Scotch containing 37.2 per cent. alcohol, which is close to the 65 per cent. proof mark, providing—this is the essential point — that it was brewed in Scotland, if brewed is the right word—
§ Mr. Cohen
I am sorry; that was a terrible gaffe, for which I apologise.
The whisky would have to have been distilled in Scotland with Scottish water. Lower-strength whisky would have to be clearly marked as under strength. At the moment, the labelling is inadequate. It needs to be made clearer that the whisky is under strength. Those two categories could both be on sale and, as long as they were made in Scotland, the system could be of benefit in affording protection to employment.
§ Mr. McKelvey
I understand my hon. Friend's argument, although it would create difficulties in legislation. I used to serve as the chairman of a licensing board. I cannot recall anyone ever being prosecuted for selling large measures or over-strength whisky. All the prosecutions arose because whisky had been adulterated or because customers had been sold short measures. That is why it is important to establish a minimum base. If people wish to double the alcohol content, that is of no concern to us or to the whisky industry. However, the minimum has to be set, to protect the quality of Scotch whisky.
§ Mr. John Marshall (Hendon, South)
Does the hon. Gentleman agree that, if there are two standards of whisky, the passing-off problem could be substantial? He may not be aware that the former chairman of Bell's used to say that an awful lot of whisky other than Bell's whisky went through Bell's bottles in unscrupulous hotels and pubs. Does he agree that, if his proposal were to be accepted, there would be a great risk that much low-quality whisky would go into Bell's, Johnny Walker and other high-quality brand whisky bottles?
§ Mr. Cohen
That would clearly be a danger. I talked about the problems for trading standards officers in the first place. I was thinking particularly of the problem of the interior whisky that will come from the Common Market, and perhaps from Japan. It is a problem. Nevertheless, if we set the second minimum at 37.2 per cent. alcohol content, we would still guarantee a reasonable quality for Scotch whisky. As the hon. Gentleman said, there is always the danger of low-quality whiskies being put into high-quality whisky bottles, even if we set the minimum at 40 per cent. proof. I understand the hon. Gentleman's point.
My main purpose was to try to protect jobs in the industry and also to protect the Scotch industry as a whole. The main purpose of doing that is to have a stricter regime — it would be the third tier — against foreign Scotches, particularly EEC Scotches. Such a regime should be quite strict. It would have to be done through labelling. The Government must promote more effective labelling. That applies also to the second grade of Scotch that is produced.
Even more important, the House has legislated in respect of the labelling of foreign whiskies. I have thought of some titles. I even pondered whether they should be called whisky at all. In no circumstances should they be called Scotch. That would seriously mislead the public. If they are to be called whisky, perhaps they should be called EEC whisky, so that people would clearly know what they were getting. They could even be called subnormal whiskies because, of course, they would be subnormal in character. I concluded that they should be labelled "whisky and water"—in equal sized lettering—so that people would know that that is what they will get with the lower grade EEC whisky.
My point about water gave rise to some thought. The hon. Member for Chislehurst (Mr. Sims) talked about the quality of water in Scotland as opposed to that in England. We must also consider the quality of water on the continent. It must be a worrying factor in regard to the sort of brands that are produced. Because of the Government's policies, water in England is becoming increasingly polluted. The Government have not been effective in countering water pollution. It would be terrible if water pollution were to extend to Scotland and have an adverse effect on the Scotch industry. It is important for the Scotch whisky industry that the Government clean up the water supply in this country.
Although that was a diversion, I think that it made an important point. I concluded that the inferior EEC and Japanese whisky that comes into this country should be labelled "whisky and water" in equal-sized lettering and should, perhaps, have a higher duty placed on it.
§ Mr. John Marshall
The hon. Gentleman referred to labelling a subnormal whisky an "EEC whisky". That may well suggest what he feels about the EEC, but does he not realise that consumers outside the European Community know that Scotland is in the EEC and may regard an EEC whisky as a pure genuine Scotch whisky?
§ Mr. Cohen
As I have said, my interest in the debate is to protect the Scotch whisky industry and the consumers in my constituency who like to drink that whisky. The hon. Gentleman has embarked on a dangerous course if he is seeking to allow inferior EEC whisky into this country and to flood world markets. That poses a danger to the Scotch 726 whisky industry and to the many jobs to which I have referred. Despite the EEC regulations, there may well be a case for putting high duties on any lower-strength whiskies that the EEC may seek to bring in.
In the past, the United States has embarked, and at any time could do so again, on a trade war with the Common Market or Japan. It has placed restrictions on EEC products by using "retaliation lists". However, when the United States had those retaliation lists, it was quick to take Scotch whisky off the lists so that it could be imported into the United States. The United States may well decide in the future that inferior Scotch whiskies do not have such significance and may then produce its own Bourbon. The Scotch whisky may get caught up with those other inferior EEC whiskies and be included on a hit list that the United States might produce in a trade war with the EEC, and that is a dangerous prospect.
I have tried to keep my remarks as brief as possible, but those are the main points that I wanted to make and I think that they are important. I hope that Scottish Members will forgive me for taking up time in the debate. I know that this is primarily a debate for Scottish Members, but I wanted to make those important points about this vital industry and to try to protect the jobs in the industry and the consumer, the man in the pub in Leyton who likes a nice Scotch.
§ Mr. John Marshall (Hendon, South)
When I first entered the House, I received one piece of advice from a colleague. It was, "Hide from the Chief Whip if you have ever been to Scotland in your life, at least until the Scottish Grand Committee has been fully staffed by volunteers." Therefore, it is with great trepidation that I rise to speak in this debate, having listened to the interesting speeches made by Scottish Members.
I was especially interested in the speech by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes), although at first I thought that there was some discrimination in what he said, as, did the hon. Member for Leyton (Mr. Cohen), because a whisky tasting took place in this House for Scottish Members—
§ Mr. Marshall
Well, a whisky tasting took place in the St. Ermin's hotel. That hotel is run by a fine public company, started by a Glaswegian, Mr. Stakis. The whisky tasting took place at the hotel, but only hon. Members representing Scotland were invited. We are constantly told by those Members that not enough Members representing England take an interest in Scottish affairs. However, that was an occasion when every hon. Member representing England could have gone along to show their interests in Scottish affairs. Who knows, we might have been more expert at discriminating between the 37.2 per cent. and 40 per cent. whiskies.
§ Mr. Marshall
I am sorry that the hon. Gentleman believes that the Members representing Scotland were so bad, but perhaps that suggests that they had all consumed the 40 per cent. proof whisky.
§ Mr. McKelvey
I am a Scotsman who was not only able to distinguish between the low-level under-strength brands and the other three brands, but was also able to distinguish between the three proprietary brands.
§ Mr. Marshall
I hope that the hon. Gentleman was well rewarded. I hope that he was not rewarded with a bottle of Arden House—that brand appears to demonstrate a nostalgia for "Dr. Finlay's Casebook". I do not know whether a whisky of that strength would be a just reward for an hon. Gentleman with such skills.
I congratulate my hon. Friend the Member for Tayside, North (Mr. Walker) on his good fortune in the ballot and upon his wisdom for introducing such a non-controversial Bill. It is only right and proper that he should have introduced the Bill because his interest in the Scotch whisky industry is long established and the Bill also reflects his constituency interests.
When one visits Perth, one remembers that it is the home of Bell's — the foremost Scotch whisky brand in the United Kingdom. I am sure that all hon. Members would pay tribute to the remarkable ability of Mr. Raymond Miguel who transformed that brand from having a small share in the United Kingdom whisky market into the pre-eminent brand. The other brand located in Perth is Dewars. That brand was number three in the United States, but it is now the pre-eminent brand in that market.
It is right and proper that my hon. Friend introduced the Bill, especially as, in 1986, he had the foresight to campaign for the independence of Bells when it was subject to a bid from Guinness. It is unfortunate that the leader of the Liberal party supported Guinness rather than Bells.
We have heard of the problems that face the Scotch whisky industry. One problem is the fact that Japan is not very kind towards the Scotch whisky industry. I believe that the United Kingdom and the European Economic Community have reached the stage when we must take a tougher line with the Japanese. If the Japanese will not allow Scotch whisky to compete on fair terms in the Japanese market, we should restrict Japanese imports to the United Kingdom and the EEC. The EEC represents an important part of international trade and it has the clout to act against the Japanese.
§ Sir John Farr
My hon. Friend may be interested to know that, a couple of years ago, the former Labour Member for Glasgow, Govan, James White — a conscientious Member of Parliament — and I had occasion to approach the Japanese regarding the way in which they were pirating Scotch whisky. That whisky was blended with large amounts of foreign substances and sold to the unsuspecting public in the far east as genuine Scotch. That has caused considerable concern to hon. Members on both sides for a number of years.
§ Mr. Marshall
I concur with everything my hon. Friend has said.
I was going to move on to the subject of bulk whisky exports, which was mentioned so movingly by the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). He quite properly talked about employment in distillation and in blending and bottling in the whisky industry. He said that blending and bottling produce much more employment than the distilleries, but it would have been more correct to say that, because the distilleries were 728 formerly situated in small villages in Scotland, there was all too often no alternative employment. So, when the Distillers Company had to close down a number of distilleries, there was no chance of the people concerned being offered alternative jobs. I hope the Scotch whisky industry can look forward to a brighter future now that its ownership has become clearer.
The hon. Member for Carrick, Cumnock and Doon Valley was right about the danger inherent in bulk whisky exports. As my hon. Friend the Member for Harborough (Sir J. Farr) has just pointed out, bulk whisky exports can be used to produce ersatz Scotch whisky, which can then be passed off as almost the same thing. I well remember, about two years ago, stopping over in India when flying to Hong Kong. We went for a walk and saw that the whisky being sold bore the legend:Only for sale in the state of Madras".That was as near being Scotch whisky as the umpiring in Pakistan is to being unbiased. I was glad that it was to be sold only in the state of Madras.
Wherever one looks outside the United Kingdom, one sees various phoney Scotches being passed off as Scotch. I remember once going to a distiller's house in St. James's square and being shown a whole range of labels of ersatz Scotch whiskies, which had no doubt partially come about because of bulk whisky exports. So I agree with everything the hon. Member for Carrick, Cumnock and Doon Valley said about the problems created by bulk whisky exports.
The second problem referred to today was that of taxation. I regret that there has been no member of the Treasury team here today to listen to what was said on that subject. There is a real danger that excessive taxation will kill the Scotch whisky industry. The law of diminishing returns applies, and I hope there will be no increase in whisky taxation in next year's Budget.
There is a real risk, too, that the quality image of Scotch will be destroyed by low-quality products. Worldwide, it is the quality products that people really want. I am not terribly impressed by High Commissioner which may have a quality-sounding name, but I suspect that it is not quite of the quality of The Famous Grouse. In the United Kingdom market, The Famous Grouse is roaring ahead and gaining market share at a dramatic speed. I am sure the vast majority of whisky consumers have heard of The Famous Grouse, but they think that High Commissioner is the poor unfortunate who has been trying to sort out the problems in Pakistan.
In the United States market, the Scotch whiskies that are doing well are Dewars, J and B, Johnny Walker and other premium brands, rather than the nasty ersatz Scotches that some people have discussed today.
I pay tribute to the work of the Scotch whisky industry in Europe. Wherever one goes in the European Community, one can see that the Scotch whisky industry is doing well. I am told that one of the most rapidly expanding markets for Scotch whisky is in Spain. Another rapidly expanding market is France, where Johnny Walker and J and B are doing surprisingly well. In all those European markets, the quality Scotch has been successful because that is what the European consumer prefers.
In Japan, the Scotch whisky industry has to compete with the law greatly biased against it. The Scotch whiskies that have done well there are those in the gift trade which, by definition, sells to the top end of the market. Wherever we look in the world, we see that it is the quality Scotch whiskies that people want. I hope that the House will give 729 the Bill a Second Reading because it will help the industry to defend its livelihood and its trade marks against the attack from low-quality whiskies.
In my visits to distilleries and to other parts of the Scotch whisky industry, I have always been impressed by the quality and devotion of the work force. I have also been impressed by the quality of labour relations in the industry. Some of our other great exporting industries have strikes; hon. Members will remember strikes in the motor car industry at Ford or British Leyland. However, it is rare to have one day lost in the Scotch whisky industry. The industry's success in avoiding strikes and the loss of days through ill health may well advertise the medicinal qualities of Scotch whisky. Perhaps a wee dram at the end of a day's work encourages people to come back the next day and keeps them in good heart.
The industry has a fine reputation and a fine history of skill and devotion to standards. In this interesting debate, hon. Members from all parts of the House have paid tribute to the history and to the future of the Scotch whisky industry. I hope that the Bill will be passed unanimously so that the industry can defend its standards and its markets as it has done so successfully in the past. As hon. Members have reminded us, the Scotch whisky industry has an export trade of £1,000 million. It is a great national asset and it is up to the House to defend that asset with every power at hand. The Bill deserves to be passed unanimously.
§ Mr. Robin Corbett (Birmingham, Erdington)
I congratulate the hon. Member for Tayside, North (Mr. Walker) on raising this topic. By listening to most of the debate, I have been on a steep learning curve. I was delighted to find, by courtesy of the Scotch Whisky Association, that it is not injurious to health to drink whisky with oysters or with other shellfish and that that is an ancient superstition for which there is no foundation. The association says:A personal experiment will furnish the proof.The booklet provided by the Scotch Whisky Association asks the fascinating question: what is the worm? I am sure that hon. Members from Scottish constituencies will have a ready answer. I do not want to run an "Any Questions" session, but the term "worm" intrigues me. The booklet tells me:The Worm and its surrounding bath of cold running water, or worm-tub, form together the condenser unit of the pot still process of manufacture.Alas, as an old pencil journalist, I have a passion for old-fashioned methods of production and I was saddened to read at the end of that paragraph:The worm is being replaced gradually by the more modern tubular condenser.Apart from a visit to the bottom of a very deep and dark pit in the Fife coalfield, I can claim no Scottish connections. I am happy to tell hon. Members that my most frequent acquaintance with Scotland comes when I have a glass in my hand. I like to think that it is one sign of maturity, but perhaps it is only because I am getting older that the palate dictates malt whisky rather than blended whisky. It may surprise Scottish Members to know that that is an experience and a learning process for many of us who were born south of Hadrian's wall. I was born very far south of it, in Western Australia.
Generally in England, we have to go through the process of appreciating whisky over the years. I have come 730 to appreciate very much the pronounced bouquet and taste of malt produced from the pot still method. Again, I have learnt this morning, although I suppose that it should have been obvious to me, that as the method of production of malt whisky does not enable a continuous production process, bottles from the same distillery and with the same label, although similar, are not identical.
You will be aware, Mr. Deputy Speaker, of a bar on these premises that boasts one of the finest choices of malt whiskies in London. I do not doubt that there are connoisseurs and experts who, even if blindfolded, could not only name the brand of malt that they were drinking, but probably make a good stab at comparing it with one that they had drunk three weeks or, perhaps, six months ago. If my hon. Friends from Scotland would like to take me in hand so that I can learn the business properly, I should be a more than willing recruit.
I am trying now to parade my ignorance. I did not know, for instance, that there were four different types of malt whisky. I knew about the Islay malts—I have spent many a happy evening with one or two of those—but I did not know about the highland malts, lowland malts and Campbeltown malts which, regrettably, are produced only by the single main distillery on the Mull of Kintyre.
We have been told about the superb export record of Scotch whisky. Exports now exceed £1 billion a year. Some countries, of course, have stricter attitudes towards alcohol use and abuse. If one is fortunate enough to be travelling on an aeroplane or a ship to Norway or Sweden, and quite properly purchase a bottle of whisky in the duty-free shop, it may be worth almost its weight in gold. I ran into someone who had worked in Sweden, where, he said, the cost of living was very high compared with that in Britain. The better to make ends meet, he and a friend used to take in their allowance of Scotch whisky. Without any hassle, he could regularly get six or seven times the price that he had paid on the boat. That did him good, and it did the Scotch whisky industry no harm, because it spread the real stuff into parts that it might otherwise be difficult for it to reach because of the pricing policy.
I have been asking some of my hon. Friends, in particular, about the alcohol level argument. Some hon. Members want a 40 per cent. alcohol "bottom" in what can properly be called Scotch whisky. My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) — he always seems to me to have three constituencies—argues that there should also be a place in the market for whiskies with an alcohol level of 37.2 per cent. Having been on the Licensing Bill Committee, I have a special interest in the Government making better efforts to combat alcohol abuse and misuse, especially among under-age drinkers. It must be taken into account that if some of the whiskies with an alcohol level of less than 40 per cent. can contribute to helping people not to abuse alcohol, there must be a place for them.
§ Dr. Godman
Every Scottish Member who has spoken today is keenly aware of the problems associated with alcohol abuse and misuse. The theme has surely been that alcohol is to be taken in moderation.
§ Mr. Corbett
I am grateful to my hon. Friend for that intervention. I do not wish to imply that the producers of Scotch whisky or those who are responsible for its distribution and sale can be blamed, wholly or in part, for the misuse and abuse of alcohol. There are outlets for the 731 sale of alcohol apart from pubs, and I recognise that those who manage licensed premises cannot be blamed for the misuse and abuse of alcohol. Unfortunately, in many parts of our three countries in this kingdom, alcohol is a menacing problem, especially in the form of under-age drinking. It is regrettable that there has been an alarming increase in the misuse of alcohol by younger women. I believe that to be the case in Scotland.
§ Mr. Bill Walker
I trust that the hon. Gentleman will bear in mind that I explained at the beginning of my remarks in introducing the Bill that I have always been teetotal. I no more condone over-indulgence in alcohol or the misuse of it by those who are under age than I condone the misuse of cars or the under-age driving of cars. I put both forms of misbehaviour in the same category.
§ Mr. Corbett
I accept what the hon. Gentleman says. No Member of this place would condone the abuse or misuse of alcohol. I am sure that we would all take a similar attitude to the misuse of drugs.
I understand that the hon. Member for Hendon, South (Mr. Marshall) said that he did not want any increase in the duty on whisky in the next Budget. Of course, that is a matter for the Chancellor of the Exchequer. I believe that there is a case for considering an increase in the duty on beers, wines and spirits, because in real terms the price of alcohol has decreased over the past 20 years. I was informed recently in a written answer that a 10 per cent. increase in the duty on beers, wines and spirits would produce about £285 million.
If the Government are to tell us that they are short of money properly to put in place measures to combat alcohol abuse and under-age drinking, for example, they should recognise that a levy on those who regularly use alcohol could make a significant contribution to financing a suitable campaign. The imposition of duty has the merit that those who drink the most contribute the most. A parallel is to abolish the road fund licence and to increase the duty on the petrol that we pump into our tanks.
In real terms, the cost of a bottle of whisky has fallen by about one third over the past 20 years. About 20 years ago, it took about six hours of work to earn enough money to buy a bottle of whisky. It now takes about two hours of work. I am glad about that in one sense, because it is of benefit to Scotch whisky producers and those who are concerned in the distribution and sale of the product, but the evidence from other countries is that when price decreases and availability increases because of an increase in the number of outlets and different types of outlets, such as supermarkets and corner shops, there is an inevitable increase in consumption. As consumption rises, so does the incidence of alcohol-related disease, which imposes such a heavy cost on families, industry and the National Health Service.
I am sensitive to the calls which have come from both sides of the House for the better protection of the Scotch whisky industry. These have come in the form of arguments in favour of minimum strength, the better to protect the industry from what is no more than counterfeiting of Scotch whisky by Japan and other countries. Others have said that some members of the Scotch Whisky Association could contribute to the protection of their industry by reducing the exports of whisky that is not bottled.
732 My hon. Friend the Member for Leyton (Mr. Cohen) talked about low-strength whisky, which has been described as "a drop of the soft stuff". I understand the point that he is making. It is right to say that he declared a constituency interest. The hon. Member for Tayside, North (Mr. Walker) and others have said that the best way to protect the industry is to create a minimum proof floor so that everybody knows what he is getting. There is a problem with that on health grounds.
I listened with great interest to what my hon. Friend the Member for Leyton said about having two or three different standards. I suspect that Scotch whisky users would not find that much help in safeguarding their market, especially exports and overseas sales. While we in the United Kingdom could perhaps understand that, I suspect that it would be a different kettle of fish in the clubs and pubs of Bangkok, Brisbane and Buffalo. It could make misrepresentation of Scotch whisky easier for those who feel that they can get away with it and make a bigger buck in the process. I must admit that I have not reached a conclusion on this. If I am fortunate enough to serve on the Committee, perhaps we could pursue this.
Scotch whisky is no stranger to the courts of Scotland, England and Wales. I am told that as long ago as 1644 the Scots Parliament—it was then a Scots Parliament—passed an Excise Act fixing for the first time a liquor duty. From 1707 and the Union of the Parliaments, revenue staff sought to control and license distillation in Scotland. One learns this also while one reads for these debates.
It was well past the middle of the 19th century before there was some uniformity in whisky. It came from the product of a single distillery, grain or malt, and because of the limitations of technology of the time, and factors such as the supply of water and, I dare say, the quality of the water and barley, the product of a single distillery could vary widely from year to year. In other words, if one bought a bottle of whisky one could never be quite sure what one was getting. That went on for years. There was a report on 28 July 1909 by a Royal Commission under the chairmanship of Lord James of Hereford, and the definition was updated by the Finance Act 1969.
My hon. Friend the Member for Leyton may be interested to know that in the early 1900s the malt distillers were growing increasingly worried about the success of blended whisky. In 1904, Islington borough council, probably not then under Labour control, took proceedings against several local publicans for selling what they called "brandy", which was a mixture of brandy and neutral spirit. It was a test case to see whether the drink sold wasnot of the nature, substance and quality of the article demanded by the purchaser",and thus unadulterated. In November 1905 the council did exactly the same to whisky. The publicans were selling blended whisky, a mixture of grain and malt whiskies, as they had done for many years. They were duly taken to court to see whether or not the whisky that they sold was the genuine article. The magistrate ruled against them, which clearly meant that grain whisky was not the true whisky. Since then, things have moved on, but it supports my preference for a malt rather than a blended whisky.
This is an important Bill for Scotland and I am sure from what has been said today that it will have an interesting Committee stage. I am sure that it will be of great help and value to the Scotch whisky industry.
§ Mr. Martin Flannery (Sheffield, Hillsborough)
I know that the promoter of this admirable Bill, the hon. Member for Tayside, North (Mr. Walker), wants a little time to answer the debate, so I shall make my remarks brief.
My first consideration is unemployment in Scotland. I am a member of the Labour steel committee, and that committee has studied cases such as Ravencraig. The unemployment is alarming. When one thinks of the tremendous output of Scotch whisky and the way in which it is revered and loved throughout the world, it would be catastrophic if anything of major proportions went wrong.
There are considerations other than unemployment. My knowledge of the Celt and the Gael is not totally lacking. I have an Irish name, and I come from Yorkshire. Somebody with a rare sense of humour, probably connected with the War Office, called up a Yorkshireman named Flannery to a couple of Scottish regiments, one after the other. I learnt to drink a dram of whisky on the odd occasion, as a sheer defence. It was a curious thing. On the first Friday night that I spent in the Scottish Borderers I palled up with three Scots chaps—
§ Mr. Flannery
On the contrary, there was a large number of miners from Yorkshire and many people who were not Scots in the Scottish regiments. Anyone who thinks that all the people in the regiments were Scottish is dreaming.
I learnt the hard way. We received 10 shillings. Some hon. Members may be old enough to remember. We went out on only one night a week because of that. I was losing heavily because I did not drink whisky and called for half a bitter. After the third Friday I thought that I had to look at things afresh. I realised that I just had to drink whisky. I found it not a terrible thing to do.
If my Scottish connections, whom I still know from those days, thought that in this debate I had not defended Scotch whisky and the employment of those in the industry they would take me to task in no uncertain manner next time I went to Scotland, where I go for a holiday every year.
The Bill admirably defends Scotch whisky. I shall speak solely about the 40 per cent. level. Unless the Minister is kind, as he promised to be, that part of the Bill could have its dangers. To me, Scotch whisky is 40 per cent. I say to the hon. Member for Tayside, North, although he is a teetotaller, that that level is not unconnected with its name. People who love and drink it in moderation do so because of the 40 per cent. level. The protection against drunkenness is to drink moderately and not a great deal of it. The Bill states:It shall be unlawful … to sell Scotch whisky at an alcoholic strength less than any such strength as may be specified for the time being in an order made by the Ministers under this section.That has a certain amount of danger. The level can go down to 37.5 per cent. or 37.2 per cent., as it apparently does, or even lower. I am not sure, but I think that there could be a grave danger of whisky no longer being seen as the whisky that it now mainly is. There could be a danger of sales dropping off and of unemployment flowing from that fact. Equally dangerous, whisky might be demeaned and not be nearly as good as it is.
Therefore, I defend the 40 per cent. level. I visit Rabbie Burns' cote regularly in the area represented by my hon. 734 Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes). I support what he said. If we leave it to the Minister to decide, I am afraid that, if we do not get the necessary protection, the dram will taste a bit different.
§ Mr. Bill Walker
With the leave of the House, Mr. Deputy Speaker, I will reply to what has been an interesting and well-informed debate. Although some speeches may have had more to do with deer than with quality, all of us would agree that some unusual Jocks have participated in the debate.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) asked me why we needed the Bill. The answer is that we had to take into account the experience of attempting to negotiate in Europe and the problems that may be created in the United Kingdom and abroad by the introduction of a Euro-whisky. Since I had decided to introduce a Bill on that aspect of the Scotch whisky industry, I thought it proper to include all the other areas of concern, including the problems of the quality end of the Scotch market.
§ Dr. Godman
I forget to ask the hon. Gentleman about the legal definition of Scotch whisky and why it is to be protected by civil law, not criminal law. Does the hon. Gentleman know whether, in France, the production of champagne is protected only by civil law or by a combination of civil and criminal law?
§ Mr. Walker
Only a European lawyer could understand French law properly. I am not a European lawyer and I will not try to unscramble the position in French law, but I can tell the hon. Gentleman that, in the United Kingdom, this matter will be dealt with in civil law. We judged it to be the best vehicle, and that is why the Bill is constructed as it is.
One problem that has been highlighted is the difficulty of protecting the quality of Scotch. The majority of those who spoke in the debate understand that the quality of Scotch makes it sell in vast quantities worldwide. Although we could argue about what is 7 per cent. of 15 per cent., or what is 6 per cent. of 3 per cent., we must never forget that sales in the United Kingdom represent only a tiny fraction of total sales. The sales worldwide provide the jobs that we are all anxious to maintain and enhance. That is why we deemed it necessary to give the Minister the ability to introduce orders laying down a clearly stated minimum strength for the alcohol content of Scotch whisky.
735 Hon. Members have spoken about the good work of the Scotch Whisky Association and the splendid industrial relations in the industry. I have no hesitation in endorsing those remarks.
I am sometimes surprised by Opposition Members who chastise me about some of the matters in which I am involved. I defy anyone to say that he has heard me suggest that there is something wrong with trade unions. After all, I was a shop steward and a member of the national executive of my trade union. Anyone who criticises me fails to realise that I believe that trade unions are an essential part of the negotiating process. That is why I have no hesitation in saying that the trade unions in the whisky industry are an example to many other unions. Indeed, I wish that all trade unions were of their standard.
§ Dr. Godman
I am sure that the hon. Gentleman will agree about the importance of making known the excellent industrial relations record of the industry to those acquisitive-minded international companies that seek to invest in it. Is not one of the main reasons for such a good record the fine, indigenous managment, as well as first-class trade union representation?
§ Mr. Walker
I have no hesitation in fully agreeing with the hon. Gentleman. I only wish that we could say the same about so many other industries. The management of the Scotch whisky industry has a fine record.
I have been careful not to stray into areas of great controversy because of my past record. However, it is important to place on record that one of the greatest skills of the management of the Scotch whisky industry has been its motivation and leadership of the work force. That has resulted in excellent industrial relations at all levels within the unions.
I endorse the comments and compliments about Raymond Miguel. He suffered badly in the media in Scotland during the takeover of Bell's. That has now substantially changed, and I am delighted that that former chairman of Bell's is now active in many areas in Scotland, not least as chairman of the Scottish Sports Council. I am sure that he will do the same fine job there as he did at Bell's.
We need the Bill to ensure the continued success of a very fine industry. I hope that the House will show their agreement by supporting the Bill.
§ Question put and agreed to.
§ Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).