Whisky Industry (Hansard, 24 May 1995)

§ 1. Mrs. Ewing
To ask the Secretary of State for Scotland what is the total number of people employed in the Scotch whisky industry currently; and how many were employed in 1990. [24221]

§ The Parliamentary Under-Secretary of State for Scotland (Mr. George Kynoch)
The Scotch Whisky Association, in its latest annual review, states that 13,804 people in 1994 were employed by its member companies in the Scottish whisky industry, compared with 16,376 in 1990.

§ Mrs. Ewing
Will the Minister confirm that the figures that he has just given are taken from the Scottish register of employment, which takes no account of establishments that employ 11 or fewer employees? In that context, does he accept that the rise in the excise duty on Scotch whisky since the Government came to power has been about 30 per cent. and that the decline in the home market has sent out the wrong message to foreign markets? Does he therefore agree that we have to take tender steps to ensure that the Scotch whisky industry is protected and that there will be no further mothballing as there has been at Tamnavulin, Tullibardine and Bruichladdich?

§ Mr. Kynoch
I think that the hon. Lady was, unfortunately, not listening to my reply. I said clearly that the Scotch Whisky Association gave those figures in its latest annual review. They were not from the source to which she referred. The hon. Lady might also be aware of the fact that, in the past 10 years, the real rate of duty on spirits has fallen by some 16 per cent. in real terms. I think that she is giving a slightly distorted story. In the industry in general, since 1980, exports have gone up from £746 million in 1980 to over £2 billion in 1994. I believe that the industry is attacking its markets very aggressively and successfully.

§ Mr. Bill Walker
Does my hon. Friend agree that it is not the Government's job to second-guess the Scotch whisky industry on how it should run its business but that it most certainly is the Government's job to create a tax environment at home, and to influence the tax environment in Europe, to enable the Scotch whisky industry to continue to be Scotland's greatest exporter, excluding oil and gas? That will continue, provided that we have a tax regime that encourages the industry to expand and not to contract.

§ Mr. Kynoch
My hon. Friend is right. It is not the Government's job to intervene in production scheduling in the industry. With regard to taxation, I am sure that my hon. Friend is aware that my right hon. and learned Friend the Chancellor of the Exchequer, in a speech in the House on 13 December last year, said that he was very sympathetic to the case for removing distortion of the duties charged on, for example, wine as opposed to spirits and to maintaining a freeze on alcohol duties for the benefit of the Scotch whisky industry. He reaffirmed his 886 intention to continue along the road to revising duty differentials following the increase in the 1994 Budget that he had forced upon him by some hon. Members.

§ Mr. McKelvey
Is the Minister aware that Saturday the 27th of this month marks the quincentennial celebration of the discovery or the invention of Scotch whisky? To assist the Scotch whisky industry with all its magnificent efforts in exports, the Government should remind the Chancellor that he put the 25p après-Budget additional tax on whisky in a fit of pique because the House democratically voted not to allow him to put the second tranche of VAT on fuel.

§ Mr. Kynoch
I am glad that the hon. Gentleman referred to the 27th of this month because I gather that there will be an open day at many distilleries, and that the hon. Gentleman will be leading the visitations to some of them. He referred to taxation and to what the Chancellor had to do in his second run at the Budget. What he had to do was something that the Labour party is totally incapable of doing—balance the Budget. The Labour party has proposals for a tax-raising Scottish Parliament, which would mean that it would have to address the problem of balancing the Budget. If it could say clearly to Scottish business and to the Scottish people that they would definitely not face a taxation increase, the hon. Gentleman might address taxation issues in a more responsible manner.