Inheritance Tax Relief: Farms

Jamie Stone Excerpts

Monday 10th February 2025 Westminster Hall

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a pleasure to serve under your chairmanship, Sir Edward. As Chair of the Petitions Committee, I am delighted to see such fantastic attendance at this debate.

I have two simple things to say. A week ago yesterday, I attended the farmers’ rally in John O’ Groats, at the other end of the United Kingdom. I was the only politician there. It was a cold, blowy day and the farmers and their tractors were out in force. I spoke to many of them and heard their concern. Even that far away from Westminster, it was exactly the same as we are hearing expressed in this debate: their fear of losing the farm.

That takes me to my second simple point. I was brought up on a dairy farm. Bought by my great-great grandfather, Donald Fraser, it was in the family from the early-to-mid-19th century—a long, long time—but due to financial circumstances, my father had to sell almost all of it. Today, my brother and I own the princely sum of two fields. Here is the point: not a day goes by that I do not look toward the fields we used to own, on the shores of the Dornoch firth, and wish that we still owned them.

The farm is in my blood. It is not like selling stocks and shares, or selling a holiday home in Spain; it is in the blood, it is in the family. Unless I were to win the lottery, I will never be able to buy back those fields. I am not likely to win the lottery and even then, land goes up in value. It is emotional, and that attachment makes it very different from other things one might own. This point has already been made, but once the farm is gone, it is gone forever.

National Insurance Contributions

Jamie Stone Excerpts

Tuesday 4th February 2025 Commons Chamber

[Steve Darling (Torbay) (LD)]

The Liberal Democrats welcome the Minister’s suggestion that today’s proposals are yoked to the national insurance increases going through the other place. Since the general election, we have had doom and gloom from the Labour party until very recently. The uncertainty around the Budget and the national insurance increases that are yet to hit has only put the cold hand around the economic growth that we need to see pumping harder in our economy.

In my own part of the world in the west country, it is having a massive impact on the tourism industry. The fact that the thresholds at which people start to pay national insurance are going down from £9,200 to £5,000 means that businesses in my constituency, such as Paignton pier, Paignton zoo and Splashdown, all have massive increases in seasonal worker costs, through both the threshold hitting harder and the increases in national insurance costs. When I speak to businesses such as Splashdown in Paignton, they tell me that it means they will probably operate for a shorter time and that they may look at reducing the number of staff they take on. Sadly, the national insurance increase is a jobs tax on our tourism industry, as well as on the rest of our economy.

I am only too well aware that the cost to hospitality is £1 billion. That is extremely disturbing. Again, people will not be taken on due to those cost pressures. Therefore, this really is a jobs tax.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I am very interested in what my hon. Friend is saying about the threat to jobs. At the other end of the country, the north of Scotland, we have the same issue. The loss of any jobs in the hospitality industry is disastrous, when we do not have much employment anyway. We would like much more—let us put it that way.

[Steve Darling]

I am delighted with my hon. Friend’s intervention, because the Liberal Democrats represent the full length of the United Kingdom from Shetland to the Isles of Scilly, and it is important that we hear about that impact from a breadth of colleagues. The Liberal Democrats represent some of the best places to go on holiday across the UK.

There is a significant high-tech industry in Torbay. Again, businesses in that manufacturing industry tells me that their owners abroad may ask them to offshore some of their manufacturing to places such as Taiwan, where taxes on employment are significantly lower. That is another significant impact of the rise in national insurance contributions.

Bay Care is an outstanding social care business, but Kat Hall, one of its senior managers, tells me that this measure will have a significant impact. The business operates within very tight margins, and it will have to reduce services or limit its offer to our communities in South Devon and Torbay. Those reductions will inevitably have an impact on the social care offer.

Finally, let me say something about the voluntary sector. Torbay Communities gives outstanding service to the people of South Devon and Torbay, but the national insurance increases will confront it with considerable challenges. It will have to think about whether to reduce its staff and stop supporting some of the most vulnerable people in the area—people who are in need. With due respect to the Minister, I ask the Government to reflect on these increases and to see how they can alleviate them, particularly in the hospitality, social care and voluntary sectors.

Farming and Inheritance Tax

Jamie Stone Excerpts

Wednesday 4th December 2024 Commons Chamber

[Tim Farron]

I am going to get to that, but the right hon. Gentleman will have to tolerate me accurately pinning blame on his side before I do so.

We were told by the last Government that they would maintain the amount of funding that we used to spend when we were in the European Union. In England, that was £2.4 billion. In one sense, and one sense only, they kind of kept that promise because it was £2.4 billion throughout that five years. However, they did not spend it, because they phased out the old scheme very rapidly, causing a great hardship, particularly to small family farms, and they brought in the new schemes far too slowly and made it very difficult for people to get into them. By the way, the people who were able to get into the new schemes were the big farmers. They were the landowners who had land agents to help them get into the schemes. So the large landowners with the bigger estates managed to get into those schemes. They are all right, broadly speaking. It is the smaller family farms—the farmers who own their own farms and the tenants—who have struggled.

It is also worth bearing in mind that there has been a little bit of inflation since 2019. The cost of running a farm has gone through the roof when it comes to feed, energy, fuel and all sorts of input costs. So the fact that we are at just £2.4 billion now, as we were five and a bit years ago, is absolute nonsense. It is important also to recognise that the grants that were available under the last Government, and now, are in reality often only available to those who have the cash flow to be able to get them in the first place.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

If land prices were to go down, as has been described by the Minister—I am not sure I believe that—and a farmer had borrowed heavily from the bank, the bank might look at the value of their asset and could possibly call in the loan, which would put the farmer out of business right away.

Oral Answers to Questions

Jamie Stone Excerpts

Tuesday 3rd December 2024 Commons Chamber

[Emma Reynolds]

I am a Minister in both the Treasury and the DWP, so I have conversations with officials about this all the time. We are absolutely determined that those who are eligible for pension credit should be aware that they can apply for it, given our big campaign to raise awareness—only last week we launched a TV campaign on the issue. We have also deployed an additional 500 staff to process those pension credit claims. Thanks to our campaign there has been a 145% increase in the number of claims, which is why the processing is taking a little longer, but we are absolutely focused on speeding it up and ensuring that those who are eligible receive the help they need.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

8. What fiscal steps she is taking to increase economic growth in rural areas.

[Helen Morgan (North Shropshire) (LD)]

20. What fiscal steps she is taking to increase economic growth in rural areas.

[Jamie Stone]

For generations the grim spectre of highland depopulation haunted the area I come from. I can remember my own father saying, before North sea oil came along, that I would have to go south; to go away. Today we have the Inverness and Cromarty Firth green freeport, and we have the prospect of a space launch in Sutherland. May I ask the Government to consider fiscal means whereby these projects can be assisted? I warmly invite a Treasury Minister to come north to my constituency to see what we are doing and what we have on offer.

[James Murray]

The Chief Secretary to the Treasury will set out any fiscal measures in due course. I am not sure whether I will get away with committing him to a visit to the hon. Gentleman’s constituency, but I am sure that many of us would like to visit it. In fact, I shall be in Scotland in the next few days, but as it is for a Labour party fundraiser, the hon. Gentleman may not want to join me.

Winter Fuel Payment

Jamie Stone Excerpts

Tuesday 10th September 2024 Commons Chamber

[Mel Stride]

I thank my right hon. Friend for his intervention. It has been suggested that the Government are examining ways of ameliorating some of the harshest effects of this policy, and that might be one of the things they consider. On that particular point, we cannot escape the fact that, whatever age people are, over two thirds of those who are currently pensioners below the poverty line will lose their winter fuel payments under the current arrangements.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I have the honour to represent the most remote, the most sparsely populated and the coldest constituency. The Secretary of State, in responding to my hon. Friend the Member for North East Fife (Wendy Chamberlain), said earlier that the Government would try to maximise the take-up of pension credit, and I accept that, but would they accept that sheer remoteness and sheer distance can militate against people taking up this offer? I ask the Government, via the right hon. Gentleman, to please look at this issue, because it means an awful lot to my constituents.

[Mel Stride]

I am sure that those on the Government Front Bench will have heard the hon. Gentleman’s intervention.

The reality is that the Government want to rush this through so that they can blame it on their predecessor and avoid proper scrutiny. There is no need whatsoever for the haste with which this is being done, other than to meet the political ends of the Labour party. They are ripping the plaster off and hoping that the country will have forgotten by the time of the next general election. That is at the heart of it, but we will not forget. We would not have been given the opportunity to debate and vote on this measure without significant pressure from the Opposition and the wider public. This is nothing to do with fiscal responsibility and everything to do with political expediency—no scrutiny, no impact assessment, no notice. This is an appalling way to govern.

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[James Murray]

I am going to make some progress, as I have taken many interventions already.

Under our approach, those eligible for pension credit will continue to receive winter fuel payments. We want to target winter fuel payments to those on the lowest incomes, which is why we are linking the payment to eligibility for pension credit and other qualifying income-related benefits and tax credits. That is the right approach to help those on the lowest incomes. We are determined to make it as effective as possible by making sure that people who are eligible for pension credit make a claim.

[Jamie Stone]

The point I made to the shadow Secretary of State, the right hon. Member for Central Devon (Mel Stride), is a fair one. Distance and remoteness militate against take-up. People living in very remote hamlets in the highlands do not necessarily perceive the Department that they should. Can I have an undertaking from the Minister that the Government will look at this issue?

[James Murray]

I thank the hon. Gentleman for his comment, and I know that my colleagues are aware of this issue. In fact, it is one reason why the automatic payment of pension credit and other benefits is so important. For instance, the merging of housing benefit and pension credit would help to overcome some of the problems. It would help some of the people in the situation he describes. That merger of housing benefit and pension credit was first mooted in 2012, and was delayed several times by the previous Government—I think they intended to leave it until 2028. My right hon. Friend the Secretary of State for Work and Pensions is looking at that as a matter of great priority, to ensure that people get the help that they deserve.

Royal Bank of Scotland Branch Closures

Jamie Stone Excerpts

Tuesday 14th May 2024 Westminster Hall

[The Economic Secretary to the Treasury (Bim Afolami)]

I commend the hon. Member for Edinburgh North and Leith (Deidre Brock) on securing this debate. I know this subject is important to many of her constituents, and indeed to those of many other Members.

Just two weeks ago, I responded to an Adjournment debate on branch closures. I want the House to understand that I have been working on this issue a lot in my brief, so I am very familiar with the issues that have been brought up. As I said then, and say again today:

“Banks and building societies are essential in people being able to manage their money on a day-to-day basis, and they hold a privileged and important place in our society. As such, firms must ensure that all customers, wherever they live, have appropriate access to banking and cash services.”—[Official Report, 24 April 2024; Vol. 748, c. 1111.]

We all recognise that banking has changed significantly in recent years, as the hon. Member outlined. The shift towards online and mobile access, although not complete, is significant, and it has given customers many more ways to access banking services conveniently and securely. Customers have clearly taken up those opportunities. Recent FCA data shows that almost nine in 10 adults banked online or used a mobile app. By contrast, roughly a fifth of adults regularly use a bank branch. That fifth is very important—I do not want the House to misunderstand me—but it is important to set out the scale of the change we have seen in quite a small number of years.

That does not mean that we should do away with in-person banking services, which remain critically important for many people, not just for access for cash, which I will talk about, but because of the intangible social role they play in the high street. I recognise that, as do the Government. The Government have taken steps in law to protect access to cash—indeed, we are the first Government to do so. The Financial Services and Markets Act 2023 established the FCA as the lead regulator to deliver that, and gives powers to the FCA to ensure the reasonable provision of cash withdrawal and deposit facilities, including free services, to individuals. Following that, the Government published a policy statement setting out their policies on access to cash. The FCA must have regard to that as part of a regulatory approach. That statement sets out that people and businesses should be no further than three miles from a free cash access point.

The FCA recently held a consultation on its proposed regulatory regime. Under the proposals, designated banks and building societies will be required to assess and fill gaps, or potential gaps, in cash access provision that significantly impact consumers and businesses.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The Minister makes the point about the distance that people have to travel to get to their branches. The county of Sutherland is 2,028 square miles, and we have only one branch. My plea is very simple. Governments come and go, in both Edinburgh and London, and I wish the Minister well on a personal level; I just ask that officials in the Treasury are made aware of that statistic about Sutherland, and that they bear it in mind when they think about branch closures, whatever happens in the future.

[Bim Afolami]

I appreciate that intervention from the hon. Member. I will say to him, very directly, something that I was going to say later in my speech. In the case of rural constituencies—he mentioned his very rural constituency—I think that the assessment criteria used by Link for banking hubs, working with Cash Access UK and looking at this whole issue of access to cash, need to be amended. I have communicated that to the industry, and I hope that, over the coming weeks and months, that will happen. It is clearly not working, in a relatively small number of instances in rural areas, where the rules do not appear to be flexible enough. I think that would be useful.

Budget Resolutions

Jamie Stone Excerpts

Tuesday 12th March 2024 Commons Chamber

[Peter Aldous (Waveney) (Con)]

My right hon. Friend the Chancellor of the Exchequer is quite right to focus on improving the UK’s economic activity, where, as we have heard, we should be doing much better. We have a flexible labour market, and it is vital that we do not imperil it, but we also need a long-term strategy for investments in skills and infrastructure so that our economy can move into top gear, we can compete globally with the highest-performing economies, and we can bring prosperity to all corners of the United Kingdom.

There are measures in this Budget that are particularly welcome and which will help improve our economic performance. The 2p reduction in national insurance contributions and the increase in the child benefit threshold remove barriers to work. It is also vital that we secure investment for the businesses of tomorrow. The £1 billion for the renewable electricity auction allocation round 6, the £270 million combined Government and industry investment into research and development projects in the automotive and aerospace industries, and the £120 million for the green industries growth accelerator will all help to achieve this.

In almost every Budget, it is important to be wary of and to guard against unintended consequences, and there are two that I will briefly highlight from last Wednesday. First, I understand the rationale for extending the sunset clause on the energy profits levy, but there is real concern that this will deflect and deter investment for the industries of tomorrow: offshore wind, carbon capture, and hydrogen. These industries are vital to enhancing our energy security, bringing jobs to coastal communities and delivering our net zero targets, and I am concerned that, as the levy proposals stand, they could deter that vital investment. For my part, I shall be studying closely the provisions of the spring Finance Bill, and I would urge the Government to re-engage with industry at every opportunity.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The hon. Member’s point about offshore renewables is very important. Does he agree that we must ensure, as a nation, that we construct those floating wind turbines in the UK rather than overseas?

[Peter Aldous]

Yes. If we look at the offshore wind sector deal that was signed in 2019, we can see progress in building local supply chains, but I share the hon. Gentleman’s doubt to a degree. There is still a lot more work to do, and on the manufacturing side of things I would agree with him that that could take longer than for other aspects of those local supply chains.

Secondly, I likewise acknowledge why the decision has been made to abolish the furnished letting concession. There are areas of the country where holiday lets are badly distorting the local property market, as we heard from my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken), who is no longer in her place. She made that point clearly, but there are many other areas of the country where holiday lets are not distorting the local property market. They are a vital part of those local economies, which are often in rural areas where there are limited other job-creating opportunities, and restrictions and limitations on the opportunity to diversify a business. Many such properties are also subject to planning conditions that prevent them from becoming available for full-time occupation on the open market. It is therefore important to be cognisant of the full impact of this proposal before proceeding. I see that the Financial Secretary to the Treasury, my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) is listening. We need a full impact assessment of that proposal before it advances.

To remove the stubborn productivity gap, it is vital to invest in skills and infrastructure. With such initiatives as the local skills improvement plans and lifelong learning, the Government have rightly recognised the importance of providing people of all ages with the opportunity to acquire the skills that are needed for the many new and emerging industries that are coming forward. Further education colleges and trainers currently face obstacles in recruiting staff, recovering VAT and supporting those who need to catch up on their learning following covid. It is therefore disappointing that no measures to address these challenges were announced last week.

Investment in infrastructure is vital if the east of England is to realise its full potential. It is therefore vital that funds are made available straightaway so that work on the Ely and Haughley junction rail improvement can begin without further delay. There were welcome announcements on this in the autumn statement, but there is local concern that the Government might be reverse ferreting on this issue. I hope that my concerns can be allayed.

This winter, the Norfolk and Suffolk coast has taken a battering that it has not seen for a very long time. In my constituency, in Lowestoft, Pakefield and Kessingland, this has undermined investment in the town centres, the ports and the tourism industry, including its vital leisure parks and caravan parks. Schemes have been prepared to protect these people and their property, and it is vital that they get under way as quickly as possible.

The Government are right to stick to the plan to halve inflation, to grow the economy and to reduce debt. As I have said, I believe that the Budget’s welcome initiatives will help to achieve those goals, but all around the UK, and particularly in East Anglia, we need to press ahead with strategic investment in both people and infrastructure—in flesh and blood and in concrete and steel.

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[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I wish to start my contribution with something of a personal anecdote. Just over nine years ago, in January 2015, an almighty storm struck the north of Scotland. At that time—before I joined you, Mr Deputy Speaker, in this place—I was living with my wife and my elderly mother, who, at 91, was in the last year of her life. She was bedridden, and had to be cared for, and I was her carer. In that storm, at 3 am, the electricity went out. That brought it home very forcefully to me what a predicament I was in. How did I boil the water for her hot water bottle? How did I heat the food to feed her? By the grace of God, I had an oil-fired stove, which meant that we could get by. If I had not had any form of heating, I would have been in deep trouble, as we did not get power for another two days.

I share this anecdote with the Chamber because it brought it home to me absolutely how fundamental the ability to keep ourselves warm is to life. I believe the British people have a deep sense of fairness, which we should be very proud of. It led to the national health service, free at the point of delivery, which was probably the greatest thing that Clement Attlee ever did. More than a century earlier, it led to the penny post, which meant that whether a letter or parcel was posted in Kinlochbervie in north-west Sutherland or in London, the cost was the same; it was about fairness.

I have said many times in this Chamber that the coldest village in the United Kingdom is Altnaharra, right in the middle of Sutherland. In 1995, the temperature dropped—unbelievably—to minus 27.2°C. Think how cold that is, and that was coupled with the fact that a lot of the houses are old and not well insulated, incomes are smaller and we pay an awful lot more than many other parts of the UK for our electricity. I believe we must address that fundamental unfairness.

During covid, we knew that keeping warm made recovery as speedy as possible. Good health is about having warmth. We can maximise the productivity of our population by ensuring they are healthy and kept warm. I will not lecture Conservative Front Benchers about that, because Altnaharra has been the coldest village for a very long time indeed. It was the coldest village under Conservative and Labour Governments and—dare I say it?—under Asquith’s and Lloyd George’s Liberal Governments, so the problem has been around for a very long time. My problem is that my constituents are losing out. I hear far too many stories of elderly people, like my mum, who have to make the invidious decision at this time of year, or in January, February or December, about whether to put the heating on, and that strikes me as a fundamental injustice.

Unlike the hon. Member for Huddersfield (Mr Sheerman), whose contribution I greatly enjoyed—like many in the Chamber, I will miss him, and I wish him a happy retirement—I intend to return to this place if I humanly can, depending on what the SNP decides to do; we will see about that. If I do return to this place, I give you warning, Mr Deputy Speaker, that I am not prepared to drop this issue. I will use whatever persuasive ability I have to get some assistance for those people.

Some say that people who live near wind farms should get a discount. I do not think that would work, because what about the people who do not live near wind farms? The problem is that once a wind farm is built, the energy comes almost for free—the wind is free—and that is what is so galling to my constituents. Anywhere they drive in Caithness and Sutherland, they see massive great wind farms, and yet they pay over the odds for the electricity, which comes from the wind farms, goes somewhere else and comes back with a big bill attached.

That is the end of my contribution. I give notice that I shall return to this issue at every possible opportunity if I am fortunate enough to return to this place.

Finance Bill

Jamie Stone Excerpts

Report stage
Monday 5th February 2024 Commons Chamber

[Drew Hendry]

Thank you, Mr Speaker. Obviously, it is entirely appropriate to have paused for that statement. I was unaware of the news brought to the Chamber, but it is clearly significant. Our thoughts are with the royal family at this time.

As I was saying, we need consistent policies to help the renewables sector, and we are not seeing that either from the Tory Government, who have run out of ideas, or from the Labour party, which makes promises and then ducks responsibility for what is required.

We would have liked new clause 5 to flesh out the Chancellor’s promise, made in the autumn statement, to take up to £1,000 a year for up to 10 years off the electricity bills of people living near new generation equipment. We have not heard that today, so we do not know what schemes are coming up.

As I intimated earlier, I would have liked to table an amendment on this point: if new clause 5 is applicable to people living next to new generation equipment, what about those who already live among generation equipment in, for example, the highlands and islands? We have the coldest climate in the UK. Most people are off the gas grid, so we have higher average bills than the rest of the UK. We pay the highest standing charge for electricity, 40% more than here in London, and because of UK Government policies, we have the highest level of fuel poverty in the UK, yet we export six times more electricity than we use in the highlands. It would have been entirely appropriate for the Minister to agree to introduce a highland energy rebate, to put some of that contribution back into the pockets of people across the highlands and islands who are struggling because of those conditions.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

The hon. Gentleman is making a very good point that rings true in my constituency, too. Of course, the problem is made more difficult still because of the other costs faced by people living in our constituencies, such as delivery charges and the cost of other services. Even a tube of toothpaste can cost a little more the further away it is from the big urban centres. That makes the problem a lot worse.

Cost of Living Increases

Jamie Stone Excerpts

Tuesday 25th April 2023 Commons Chamber

[Tulip Siddiq]

I will come to energy shortly. If the hon. Member were able to answer, I would ask him whether he thinks 50% is enough, because it is not enough. If he speaks to people on the ground, he will see how much they are struggling. The rising costs of everyday essentials mean that families across the country are making cutbacks just to stay afloat. That has been devastating for local economies, with communities losing the businesses and institutions that bind us together.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

It is a fact that the village of Altnaharra in my constituency is every year the coldest place in the entire United Kingdom. We already have pensioners having to make the invidious decision to wrap themselves up in blankets and put the heating off. No one should face that sort of decision.

[Tulip Siddiq]

I thank the hon. Member for his intervention. The situations being described are not what we want to hear about in our country in 2023, and we should not be proud of this record; we should be trying to do better.

Under this Government, more than 6,000 pubs, nearly 4,000 local shops and 9,000 bank branches have closed on our local high streets. That is nothing to be proud of.

Finance (No. 2) Bill

Jamie Stone Excerpts

Committee of the whole House
Wednesday 19th April 2023 Commons Chamber

[Mr Carmichael]

Thank you, Dame Eleanor. It is perhaps not a novelty to see you back in the Chair, but it is still a great pleasure none the less. I am delighted to serve with you in control.

I rise to speak to amendment 7, which stands in my name and those of my hon. Friends. In doing so, I should indicate at this stage that it is my intention to divide the Committee and establish opinion on it. The effect of amendment 7 would be to freeze the level of duty on the production of spirits. The Minister kept saying these are Scotch whisky amendments. He maybe knows me too well, but I would readily concede that many other spirits will be affected by this, and they are just as important. I think the hon. Member for Aberdeen North (Kirsty Blackman) will speak to her amendments, which do relate specifically to Scotch whisky, but I have had discussions with her, and she tells me that SNP Members are in fact minded to support our amendment, instead of pursuing their own. She will doubtless speak for herself, as she always does, later in the debate.

When we consider that 70% of the gin produced in this country is, in fact, produced in Scotland—my constituency has no fewer than four gin distilleries, and we find that situation replicated across Scotland—the impact of rises in duty are not just going to be felt by areas that produce Scotch whisky. We have also seen a number of distilleries appearing in recent times—a much smaller number, but it is significant none the less—producing rum. So it is important that we have a coherent strategy for the excise duty on these products. The difficulty I have with what I hear from the Treasury Minister is that it is difficult to discern exactly what the Government are trying to achieve in this Budget.

Scotch whisky in particular is very important to the UK as part of our manufacturing base. Indeed, it is an enormously important part of our export portfolio. It is also critical for many of the most economically fragile communities that can be found around the highlands and islands of Scotland. I was born and brought up on Islay, and people will know the importance of the whisky industry, and in recent years the growth of whisky tourism to that economy. In my constituency we have Highland Park and Scapa. Occasionally other interests are declared, but we still have only two producing distilleries. They are very important to our local community, not just in relation to the jobs they provide directly, but because of the spin-offs—the visitor centre, the merchandising, and the visitors that those distilleries bring to the community. Whisky tourism is enormously important, and it is it enormously important that the whisky industry has confidence that the Government are on their side. I am afraid that the signals we have seen from this Government in recent months have been, if I am to be kind to them, mixed at best.

The Chancellor was right to say in December that there would be a freeze on duty. We welcomed that, as I am sure did others. Three months later, to then turn around and whack a duty increase on spirits in the region of something just north of 10%, makes us wonder what the Government are trying to achieve. When I was Secretary of State for Scotland, along with Danny Alexander, who was Chief Secretary to the Treasury, we argued successfully for a 2% duty cut. In 2015, the Red Book of the day said that that would bring with it a reduction in the amount of duty received and revenue brought in, but in point of fact we brought in more revenue with a lower level of duty than had been the case before it was cut.

If we are trying to do something that will bring in more money to the Treasury, surely a duty freeze, at the very least, should be on offer. Indeed, Treasury data illustrates the point well, because a recent history of cuts and duty freezes has actually had a beneficial effect on revenue brought in. For some reason, we now seem determined to introduce a duty increase that will have an inflationary impact, and for some of the most economically fragile communities in the country that will have the effect of stymying growth.

The position laid out by the Minister on sales of beer was exceptionally interesting. He will be aware that spirits account for one third of the serves of alcohol consumed in this country, but less than one fifth of the units consumed. On the other hand, beer has 60% of the units consumed but accounts for less than 50% of the serves. It is clear that the effect of this measure will be inflationary and have a detrimental effect on the economic growth that we are all supposed to be pursuing.

The Chief Medical Officer tells us that we should safely consume 14 units per week—I think I have read this correctly—per week. If we are to consume 14 units of cider, we pay £1.13 in tax. If we consume 14 units of wine, we pay £3.36 in tax. But if we consume 14 units of spirits, we pay £4.06 in tax. To put it another way, Scotch whisky, and spirits as a whole, are taxed 256% higher than cider, and 16% higher than wine.

It was presumably for that reason that the Secretary of State for Scotland is reported in The Scotsman as having argued against it. This was not some source quoted as saying that, but the Secretary of State himself. He said that he was disappointed the Chancellor acted in the way he did. I think we can all very much share the disappointment of the Secretary of State for Scotland. For the avoidance of doubt, I did let him know that I would be referring to him in the course of my speech. Our real disappointment, however, is that, having publicly disagreed with the Government on the matter, I have a strong suspicion that if it is put to a Division he will be in the other Lobby. It is all very well to wring your hands, but if, when the moment comes and the Division bells ring, you are not prepared to do what you know is right for such an important industry in Scotland in so many of our communities, then I feel we are, as politicians, failing in our duty to our constituents and those whom we seek to serve.

We heard a lot from the Minister about the harmonisation of duties, but the House has heard the truth of the matter. The position in relation to on-sales consumption of beer will widen the gap. It simply makes no sense. If the Minister can answer no other question when he comes to respond, can he answer this: what strategy are the Government seeking to deliver by bringing forward a duty increase in excess of 10%? I do not see it. It flies in the face of the Treasury’s own data and contradicts it. It is difficult to understand what the purpose of it is, other than simply an attitude that says, “Well, you’ve had it good for a few years now, so we’re going to treat you differently and it’s time for you to take some of the pain.” An industry as important as the production of spirits deserves rather better consideration from the Treasury.

[Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)]

I rise in support of my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael), who speaks for my constituents as much as he does his own.

I want to make two simple points. First, the distilleries in my constituency—I could name them all, but I have done that before in this place—are part and parcel of each community in which they are based, and they are important to the people in those communities. They see them as their own. As my right hon. Friend said, the jobs they provide in some of the most sparsely populated and economically fragile parts of Scotland are absolutely crucial. Inver House, a company that owns two distilleries in my constituency, Balblair in Edderton and Old Pulteney in Wick, sponsors the Wick Gala each year. As something that epitomises the culture of Caithness, I would honestly recommend that all right hon. and hon. Members come to Wick and see the Wick Gala—it is something they will not forget. That company is a part of it and makes it happen, which is incredibly important. In my own home town of Tain, Glenmorangie, now owned by the French company Louis Vuitton, has for a number of years pretty well paid for the Tain highland games. Again, I say to Members: come see them and enjoy. So the distilleries are a part of the community and what they do is crucial for the community. It is about rural jobs in sparse areas.

The second point I want to make to those on the Treasury Bench is about levelling up. Those are not the words I would have chosen, but it is a good concept to take parts of the UK that have lost out in the race and bring them up—giving them a leg up—to be equal to the richer parts of the UK. By definition, the areas where there are distilleries are very often some of the more hard-up parts of the Scottish highlands and of Scotland. If Government Members want to go about levelling up, they need to get into the parts of Britain that need help.

[Mr Carmichael]

As my hon. Friend says, these are often some of the more hard-up areas of the country, but the truth of the matter is that down the years they have contributed enormously to the GDP of this country and they have the potential to do more. We are not looking for any special treatment. We are not looking for any favours or handouts. All we are looking for is a fair crack of the whip.

[Jamie Stone]

That is an extremely valuable point. I would bolt on to it that we have new distilleries starting up. In John O’Groats, there is a brand new one called 8 Doors. These enterprising local Caithness people have done it off their own bat. To get tourists to go to John O’Groats, we have 8 Doors, which has done it along the coast of Caithness. We have Wolfstone—I think I have that right.

[Mr Carmichael]

Wolfburn.

[Jamie Stone]

You’re dead right—I stand corrected by my right hon. Friend. Tourists love it and it contributes a huge amount to the Exchequer. It matters passionately to my constituents and to me. If I do nothing else for my constituency, I will try to boost the economy in every way I can because every job counts. I rest my comments with that.

[Kirsty Blackman]

I fear that, if I was to talk about the names of all the distilleries in my constituency, the debate would be much shorter than if the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) were to do so. In fact, I have much more of a tendency to drink gin than whisky, although other spirits are available.

It was interesting to hear the words “economically fragile”. That is an incredibly good point. Rural depopulation is a real issue. The Scottish Government are doing what we can to ensure that it does not continue, but if the UK Government keep working against what we are doing to encourage people to live and stay in our rural communities, we will have a real problem. That is not a small thing.

We tabled our amendments because we specifically wanted the word “whisky” on the Order Paper and we wanted to make the case in relation to whisky. However, I will not be pushing our amendments to a vote, and will support that of the right hon. Member for Orkney and Shetland (Mr Carmichael) because I concede that his is better. I am always happy to do that in such situations.

The reality is that Scotch whisky is 4.9% of the Scottish economy. Some £8.1 billion can be attributed to the sale of alcohol, around 60% of which comes from whisky exports. The numbers stated by the right hon. Member about how the differential rates work and how much people are taxed on those 14 units were incredibly interesting. The Government’s purpose is to make money from some of the alcohol measures, but there is also a population behaviour change intention behind what they do with tax on spirits and alcohol, particularly the allowance on draught beer. They have different taxes to encourage a change of behaviour, or differential behaviour in people. The Government may intend to use this tax to shift some of the population, but they are actually discouraging people from buying the very spirits that a huge amount of our livelihoods relies on. It is the case that 90% of spirits in the UK are produced in Scotland. The Government’s measures therefore have a massive negative impact on Scotland.

The average price of a bottle of Scotch whisky is £15.22 at a supermarket in Scotland. Following the new alcohol duty plus the VAT, £11.40 of that £15.22 will go to the Treasury. That is such a significant amount, and does not compare with other alcohol. I appreciate what the Government are trying to do on draught, and it is important that they have laid out their rationale for doing so—that was very helpful—but this is incredibly unfair and risks damaging those economically fragile areas, particularly in rural Scotland. Those areas have already suffered as a result of Brexit, with people’s reduced ability to freely move here.

I want to raise a small flag with the Minister in relation to the Public Bill Committee. When we come to that stage, I will be raising questions around clause 87, which is on post-duty point dilution of alcoholic products. I know there have already been problems in relation to that, so when we come to that stage of the Committee, I would appreciate Ministers being absolutely clear about their reasons for the changes in clause 87. If they are able to lay out those reasons clearly, that will reduce the number of questions I am likely to ask.

In summary, we support the amendment proposed by Liberal Democrat Members. We agree with the Scotch Whisky Association and think that the increase in duty is unfair and hits spirits, particularly Scotch whisky, unfairly. We want to stand up for our constituents, our constituencies, rural Scotland and Scotland as a whole in supporting the amendment.

--- Later in debate ---

[James Cartlidge]

I have to disagree with the right hon. Gentleman’s use of the word “realistic”. I have met representatives of the Scotch Whisky Association, whom I greatly respect, and they have said to me that if we freeze the tax we get the revenue. Unfortunately, however, the Government have what I believe is the very important and successful policy of using an independent body, the Office for Budget Responsibility, which makes forecasts independently for Governments on the effects of fiscal measures. [Interruption.] I hear voices behind me saying that they are wrong. The point is that the OBR is not a collection of soothsayers employed to predict, entirely accurately, exactly what will happen in the future. With the greatest respect to everyone, if that was the case, I suspect they would spend rather more of their time looking at accountancy of the turf-related kind rather than trying to forecast the national accounts. The point is that this enables us to ground fiscal events in a forecast of where we are at that time and the fiscal costs at the time, therefore adding credibility to the decisions we make and avoiding the easy situation where we do not have to make the difficult trade-offs that households and businesses know that, in reality, we have to face. If we want to cut one tax, we have to find the money from somewhere else. It is a good discipline.

[Jamie Stone]

Will the Minister give way?

[James Cartlidge]

I will take this very last soupçon: a final intervention from the hon. Gentleman.

[Jamie Stone]

The Minister is nothing if not courteous, but does he not accept that he would increase the revenue base by increasing industry and economic activity? What message does this send to—let me get the names right—Wolfburn in Dunnet or 8 Doors in John O’Groats? These are new distilleries, just starting out. From little acorns, mighty oaks can grow, and those mighty oaks can give the Government lots of acorns in tax revenue.

[James Cartlidge]

The hon. Gentleman is always courteous, and I send the message to him that for every single business, charity and household in the country, one thing that trumps all is wanting the Government to run the public finances in a stable way so that businesses can have confidence that the investments they make will be in a growing and stable economy. I totally understand where he is coming from, but he has not persuaded me that he has a way to find those billions of pounds. I hope that I have nevertheless offered the assurance needed for hon. Members to retract their proposed amendments, and that clauses 27, 47 to 48 and 50 to 60 will stand part of the Bill as we end our theme of alcohol for the evening.

Question put and agreed to.

Clause 27 accordingly ordered to stand part of the Bill.

Clauses 47 and 48 ordered to stand part of the Bill.

Amendment proposed: 7, in schedule 7, page 334, line 18, leave out “£31.64” and insert “£28.74”—(Mr. Carmichael.)

Question put, That the amendment be made.