§ Mrs. EwingTo ask the Chancellor of the Exchequer if he will list the recommendations of Her Majesty's Government to their European Community counterparts on tax harmonisation for alcohol, with particular reference to the export market for Scotch whisky; and if he will make a statement on current negotiations and the likely date for the reaching of a final conclusion.
§ Sir John CopeIn the 1992 Budget Statement my right hon. Friend the Chancellor of the Exchequer indicated that he was not prepared to accept any deal in Brussels that would force other member states to put up duties on spirits. At the 19 May 1992 ECOFIN the United Kingdom objected to the currently proposed 1,000 ecu minimum rate for spirits. No conclusion was reached, and the subject will be discussed again as part of wider discussions on indirect taxation in ECOFIN in June.
§ Mrs. EwingTo ask the Chancellor of the Exchequer if he has any plans to implement a capping mechanism whereby current differentials in European Community member states on tax levied on different alcoholic beverages will, as a minimum, be retained, or as a maximum be harmonised; and if he will make a statement.
§ Sir John CopeA capping mechanism would constrain the ability of member states, including the United Kingdom, to determine their own fiscal policies. My right hon. Friend the Chancellor of the Exchequer met representatives of the spirits industry on 15 May 1992 to discuss the EC proposals. He advised them that, for this reason, he was not prepared to argue for capping. However, he assured them that he would not agree to any minimum rate which forced other member states to increase their rate of duty on spirits to the detriment of United Kingdom exports.