Support for the Scotch Whisky Industry

Debate between Daniel Zeichner and Angus MacDonald

Wednesday 12th February 2025 Westminster Hall

[Daniel Zeichner]

I am grateful to the hon. Lady. We are well aware of the importance of those casks to the industry and their value.

As well as working with Governments overseas to increase market access, we work closely with the industry at home to catalyse its ability to reach export potential. We offer a wide range of support for businesses that want to start exporting or to expand into new markets, as well as a compelling programme of trade shows and events to support Scotch whisky exporters to access new markets, build buyer connections and increase marketing in target countries. We also have a network of international trade advisers offering one-to-one support across England, and teams with embedded sector expertise in Scotland, Wales and Northern Ireland. Overseas, we have a network of trade advisers and international market teams supporting agriculture and food and drink businesses in more than 100 markets, supplemented by a network of 15 highly skilled agricultural attachés focusing on removing trade barriers in key markets. We are aware of the challenges faced by Scotch whisky in international markets and we work closely alongside their representatives.

Officials across Government are working on trade deals and breaking down export barriers to ensure that Scotch whisky is traded on a fair playing field and has opportunities to grow in new and expanding markets. An important part of that work is securing geographical indication status in major export markets, to add to Scotch whisky’s domestic protection. The status is a special form of protection that defends the iconic product from imitation and counterfeiting. Last August, the Government were pleased to announce our role in securing this form of protection in Brazil, a country which is in the top five global growth markets for alcohol, and is worth almost £900 million in Scottish exports.

In the Budget a firm commitment was made to support spirits producers by, among other measures, investing up to £5 million in the spirit drinks verification scheme, which will reduce the fees paid by businesses for verification of their use of the Scotch whisky geographical indication, and go towards upgrading the overall verification scheme the Government provide. The specifics on how the funding will be used to improve the service will soon be announced by His Majesty’s Revenue and Customs.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

The share price of Diageo is down by two thirds, that of Pernod Ricard has halved—the whisky industry is in a difficult place. In the Budget, the duty added to a normal bottle was 32p, taking the total duty on a bottle of spirits up to £9.18. Does the Minister not think that we are plucking the golden goose once too often?

[Daniel Zeichner]

I hear those concerns. We are addressing a whole range of financial issues across the economy, and we think this is a fair and balanced approach.

To continue outlining some of the measures that we have taken to support the industry, we have announced measures to reduce business costs and encourage growth. We will be doing away with the alcohol duty stamp scheme from 1 May. About 3,500 spirits producers, bottlers and labellers will no longer need to comply with the duty stamp requirements, saving an estimated £6.5 million annually.

We will also simplify the administration of alcohol duty, reducing burdens and supporting growth. From March 2025, HMRC’s arrangements for duty returns and payments will be reformed, supported by a new online service. Additionally, reform of the production approvals required by spirits producers means that many will no longer be required to operate separate excise warehousing facilities for the storage, bottling and labelling of their own products.

The industry has always been innovative in sustainability practices. That is reflected in the strategy developed by the Scottish Whisky Association, supported by the UK Government as we strive to develop a more circular economy. The strategy involves a number of packaging reforms, such as the deposit return scheme and extended producer responsibility. We genuinely believe that this partnership working toward a common outcome will help us all to achieve wider sustainability goals.

We are aware that some distilleries in Scotland have struggled in recent years with delays and limitations to connection with the national grid, creating a barrier to growing their businesses. Reducing electricity network connection timescales and expanding network capacity to connect and to power businesses are both top priorities for the Government. We are working closely with Ofgem and the National Energy System Operator to accelerate network connections. The newly announced mission control for clean power 2030, alongside planning reforms to speed up infrastructure development, will play a vital role in unlocking grid connection delays for Scotch whisky distilleries, especially those in rural areas.

I thank the hon. Member for Moray West, Nairn and Strathspey again for securing this debate. In the contributions today, we have heard Members’ passion for this vital and important industry in Scotland and the wider United Kingdom. We have also demonstrated the strong support the UK Government are giving the Scottish whisky industry by listening to and acting on the industry’s concerns, and by working collaboratively toward common goals.

Question put and agreed to.

Public Services: Rural Areas

Debate between Daniel Zeichner and Angus MacDonald

Wednesday 22nd January 2025 Commons Chamber

[Daniel Zeichner]

I am grateful to the hon. Member for trying to lure me into an unfunded spending commitment. I assure him we do not do that on this side of the House, but he has made an important point, and I will of course look at it.

The Government have wasted no time in getting to work on a whole range of issues that affect both urban and rural areas. In order to pursue our growth mission, we have announced a series of planning reforms to get Britain building, removed the de facto ban on onshore wind, established a national wealth fund, announced a pensions review to unlock growth, boosted investment, delivered savings for pensioners, launched Skills England, announced a White Paper on getting Britain working, and taken the first steps to create Great British Energy. All of those measures provide opportunities for people in rural areas, and all sectors can shape and benefit from wider policy reform through the growth mission, which will create the conditions for businesses to invest and employ, and for consumers to spend with confidence. However, we absolutely recognise the specific challenges and opportunities.

[Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)]

Will the Minister bear in mind the importance of community benefits from renewables? The whole of the highlands is covered in turbines, which are built overseas and often owned overseas. We have the highest level of fuel poverty in Britain, and renewables offer the only chance for rural Britain to level up financially that we will see in our lifetimes. I greatly fear that the opportunity will pass us by.

[Daniel Zeichner]

I am grateful for the hon. Gentleman’s intervention, but I do not share his pessimism. There are real opportunities, but it is up to us to make sure that they are realised. He makes an important point.

The Government absolutely recognise that there are specific challenges and opportunities that make rural communities and economies distinctive, and we acknowledge the need for direct support through programmes such as the rural England prosperity fund, which provides targeted support to rural businesses and communities. We recognise that community-owned businesses play a particularly important role in rural areas by providing opportunities for communities to come together and access services, but we also recognise that there are significant challenges facing rural community businesses and that the Government have a role to play in overcoming them.

A number of my hon. Friends have talked about rural transport, which is key to those living and working in rural communities. We know that a prosperous rural economy requires improvements in rural transport and, of course, digital infrastructure. The availability of affordable housing is key, as are affordable energy and access to a healthy and skilled workforce, so a complex mix is required to get the growth that we so want to see.

We also recognise that the need for rural residents to travel further to access work, education and training, and essential services such as healthcare raises additional challenges. We know that it can be more costly and time consuming for them, and we recognise their frustrations. I was struck by the points made by my hon. Friend the Member for North Northumberland about what happens when services are withdrawn. We know all too well the problems that that creates for our constituents, so this Government are determined to deliver better bus services. We have set out a plan to achieve that in our Bus Services Bill, which will give local leaders the tools they need to ensure that bus services reflect the needs of the communities they serve.

My hon. Friend was absolutely right to raise the issue of digital access, particularly for those in ultra-rural areas. Digitisation is at the heart of this Government’s agenda, and we are committed to ensuring that rural communities and businesses are not left behind or disadvantaged. Through the shared rural network, which has helped to deliver 4G mobile coverage to 95% of the UK a year ahead of target, we will continue to deliver 4G connectivity to places where there is either limited coverage or none at all.

However, we are aware that rural parts of the UK still lag behind when it comes to mobile coverage, and we will continue to work with the industry to deliver new coverage to such communities via the shared rural network, enabling them to thrive. Our ambition is to go further and for all populated areas to have higher-quality stand-alone 5G access by 2030. Project Gigabit is the Government’s programme to deliver gigabit-capable broadband to UK premises, many of which are situated in rural communities that are not included in suppliers’ commercial plans.