§ 2.58 p. m.
§ Baroness Miller of Chilthorne Domer asked Her Majesty's Government:
§ What proposals they have to avoid damage to the sparkling cider industry following the increase in tax from its 1996 level of 23p per litre.
§ Lord McIntosh of HaringeyMy Lords—
§ Lord McIntosh of HaringeyLittle things please little minds; like mine. In 1996, faced with the threat of infraction proceedings by the European Commission, the then government began the process of aligning the duty rates on sparkling cider and lower strength sparkling wine. This culminated in yesterday's Budget with the increase in sparkling cider duty which affects less that 0.5 per cent. of cider production. The process has had the support of the National Association of Cider Makers and has been phased in over a number of years.
§ Baroness Miller of Chilthorne DomerMy Lords, I thank the Minister for that reply. He has made the very point I wish to make; namely, that this is a small problem. Perhaps that is why neither party when in government has chosen to address it seriously. Sparkling cider is an historic drink. It is a 17th century drink—
§ Baroness Miller of Chilthorne DomerMy Lords, I am coming to it. Obviously none of your Lordships drinks 17th century cider. As the Economist said, at one stroke this measure will wipe out a small, rural craft industry of the type the DTI and MAFF seek to protect with grants. Does the Minister feel that his action is in conflict with that of the DTI and MAFF? What can he do to remedy the situation?
§ Lord McIntosh of HaringeyMy Lords, I have to make two points in response. In the Question the noble Baroness asks me about avoiding damage to the 225 sparkling cider industry. This is not a question of protection; it is action against protectionism. I wonder, for example, how noble Lords would feel if we did not pursue the Greek Government, who have a policy of lower rates of duty on ouzo as opposed to Scotch whisky. That is protectionism of exactly the kind we have been accused of as regards competition between sparkling cider and lower strength sparkling wines. The noble Baroness is right to say how small the industry is but she did not say quite how small. There are fewer than 30 producers of bottle fermented sparkling cider. Of those, 15 are exempt from the measure because their output per annum is too small; bottle fermented sparkling cider represents a small proportion of the total output of the remainder. I am sorry for the individuals concerned but this is hardly an industry of the kind that merits the massive attention which the DTI gives to industry throughout the country.
§ Lord Mackay of ArdbrecknishMy Lords, does the Minister realise how much we appreciate the fact that he has answered all four Questions on the Order Paper? He thus joins what I gather is an extraordinarily exclusive club of which I never managed to become a member. I am sure that it will be particularly welcome to the Yeomen of the Guard that their Captain has joined the club of those who have answered four Questions out of four. It is the first time, I believe, that has occurred. We congratulate the noble Lord on giving his ministerial colleagues a day's holiday in that regard.
On the subject of the Question—and in connection with the first Question on the Order Paper—would it not help us all to celebrate the millennium if the duty on Scotch for the period of this New Year were reduced to 23p per litre?
§ Lord McIntosh of HaringeyMy Lords, when I said that little things please little minds, I am glad to note that there are two little minds in the House, the noble Lord's and mine. As is well known, the Chancellor announced that he is imposing no new increases on any form of alcohol, with the exception of the matter raised in the Question, before the millennium. I think the noble Lord asks rather a lot in seeking a reduction in the duty on Scotch whisky.
§ Lord Pearson of RannochMy Lords, when the noble Lord justifies his position by saying that the Greeks are being forced to come into line on the duty rates between ouzo and whisky, can he give the House an assurance that the Greeks and other Mediterranean countries always obey EU directives?
§ Lord McIntosh of HaringeyMy Lords, we seek to take action against the Greek Government as Italian manufacturers have sought to take action against us with regard to sparkling cider. The issue has not yet been resolved. When it is resolved, we shall expect the Greek Government to obey European Community directives, as we do.