HL Deb 21 January 1976 vol 367 cc462-4

2.38 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether, in view of the widespread redundancies and short-time working in distilleries throughout Scotland, they will consider some reduction in the very high excise duty on Scotch whisky.


My Lords, I am of course unable to anticipate the Budget Statement which my right honourable friend the Chancellor of the Exchequer will be making later this year in another place. I should mention that any relationship between reduced employment in Scottish distilleries and the current rate of excise duty on spirits is less direct than might be inferred from the noble Lord's Question. More than four-fifths of Scotch whisky production is exported without duty payment. Spirits duty is payable on release of whisky from bond for home consumption, after it has matured for at least three years. It is still too early to derive any firm conclusions as to the effect of the 1975 Budget on home consumption, but duty-paid clearances for the first 10 months of 1975 were about 1 per cent. higher in terms of volume than those for the corresponding period of 1974.


My Lords, I thank the noble Lord very much for that detailed reply. May I ask whether he is aware of the effect on the level of taxation levied by foreign Governments of the highly penal rate of taxation on Scotch whisky which is levied in this country? In relation to the Budget which is approaching, is it possible for the noble Lord to impress on his right honourable friend that a gesture on the part of Her Majesty's Government in lowering this penal duty might encourage the distillery workers and their families who are suffering most from the present situation?


My Lords, my right honourable friend had that point in mind when he prepared the last Budget. Had he maintained the duty in real term sat the level of 1970, the additional duty in 1975 would have been £120 per bottle. However, he raised the duty by only 64p per bottle because of the considerations mentioned by the noble Lord.


My Lords, at the risk of going marginally outside the scope of the original Question, may I ask whether the Government are aware that, owing to the high cost of grain, the amount of whisky distilled this year in Scotland was lower than it would otherwise have been? In view of what the Minister has said about the importance of this industry for exports, will the Government consider giving help to the whisky industry to maintain its stocks for five, six and seven years ahead, by which time the whisky will be saleable.


My Lords, that was considered by my right honourable friend both before and after the last Budget, but he came to the conclusion that to act in the way that has been suggested would be outside the strategy of the Budget. Furthermore, he felt that the producers of whisky had a remedy in their own hands. I understand that wholesalers and retailers normally receive two months' credit, and the answer is to reduce that term of credit.


My Lords, is my noble friend aware of the fact that most people who drink whisky say that they do so for medicinal reasons? Therefore, would it not be of benefit to the whisky industry if doctors were enabled to prescribe whisky on the National Health Service?


My Lords, unlike my noble friend I do not take for the gospel truth everything that is said!


My Lords, is the noble Lord aware that according to the medical profession whisky is the only alcoholic drink that is a non-depressant? With the present extremely depressing behaviour of the Government, would it not be wise to encourage the production of whisky?