Scotch Whisky Industry

Margaret Ferrier Excerpts

Wednesday 9th March 2016 Westminster Hall

[Andrew Percy (Brigg and Goole) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Moon. I congratulate the hon. Member for Argyll and Bute (Brendan O'Hara) on securing this important debate in support of the whisky industry, which is important not only to Scotland, but to the whole of the United Kingdom.

I declare an interest as an avid Scotch drinker. In fact, I drink all sorts of whisky, whether it is Arkansas rye whiskey or my particular tipple of Highland Park. Or there is even the whisky produced by the English Whisky Co., which is very good, or Penderyn, which is very lemony, very citrusy, very nice. I have named enough now in the hope that somebody sends me a free crate; we will see. I will not talk about my evening on Kintyre with a full bottle of Laphroaig—we will leave that one, but the photos are still out there.

This is an important debate for all the reasons that the hon. Gentleman gave. Scotch whisky is a huge part of the UK economy. I want to talk in particular about its impact on the whole of the United Kingdom and my constituency, the duty rate, and the potential for growth in the market through trade agreements such as the Canada-EU comprehensive economic and trade agreement.

I have just accepted a small role as the Prime Minister’s trade envoy to Canada, and one of my mandates from him is to market and push CETA and its benefits. I am not the first politician to hold two diametrically opposing views at the same time, but while promoting CETA, I am, of course, also campaigning for us to leave the European Union. Leaving that small inconsistency aside, CETA will obviously be of great importance to the Scotch whisky industry. I would argue, of course, that outside the European Union we would still have the same access, blah blah blah, but Canada is the 15th biggest market for Scotch whisky, with about £66 million-worth of exports—about 20% of all Scottish exports to Canada. Unfortunately, however, due to the liquor board system in Canada and some of the burdens placed on imports, Scotch whisky is unfairly discriminated against at the moment. We have to make sure, through the final stages of CETA, that those barriers are removed so that we have full access for Scotch whisky to the Canadian market.

That is a reminder of just how important trade treaties can be to jobs. There is a lot of opposition to the Transatlantic Trade and Investment Partnership, and some of that is unfortunately filtering through to CETA, but we have to make it very clear not only to people in this place but to the wider public that it is a good deal that will support jobs across the United Kingdom.

Scotch is doubtless a Scottish product, and Scottish people should be very proud of it, but it is also a great British product. IG Industries in my constituency provides a lot of the packaging, and Muntons, also in east Yorkshire, provides some of the cereal. I like to think that when people have their tipple of Scotch whisky, the taste comes not just from the fine Scottish water but from the even better east Yorkshire grain.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

The Scotch whisky industry creates prosperity and jobs right along the supply chain, be it in cereal, ceramics, glass or haulage. Does the hon. Gentleman agree that we should do all that we can to support the industry and to protect the many jobs that depend upon it, and that we should listen to its calls for a small drop in duty?

[Andrew Percy]

I do have sympathy with that. It was nice to hear the hon. Member for Argyll and Bute pay tribute to the Chancellor, which is not something I often do either. He was correct to do so on this issue, because the calls that were made last year were successful. We have all seen the incredibly positive impact that has had on the supply chain and jobs, and if there could be movement again, that would be appreciated. I need not reiterate the number of jobs that the hon. Gentleman quoted, but they are a huge part of this country’s economy and employment profile. As we heard, our trade deficit would be 11% higher without Scotch whisky. It is a great product, and a British product in so many ways, including the fine Yorkshire grain and the packaging from my constituency. It supports jobs at the Immingham port complex through exports, so it is important to the whole UK market.

I am conscious of your instruction on time, Mrs Moon, so I will end with a simple request to the Minister, which he will hear many times today. If there is an opportunity ahead of next week’s Budget for some movement on the 67% duty rate, I will entirely support it, not least because of the arguments we have heard so far today.

--- Later in debate ---

[Calum Kerr]

Thankfully not. Those wonderful titles pay tribute to the region’s rich heritage and will help to promote us as the whiskies are sold across the world. Of course, I am sure the distilleries will produce lighter, lowland-style whiskies, and I am sure I am not the only one looking forward to tasting them—they cannot come soon enough, but we will have to wait.

The companies behind the new borders distilleries are certainly entrepreneurial, and they have plans, beyond traditional distilleries, to produce other spirits, including gin. The sites have the potential to be highly popular attractions in their own right, and the visitor centres look fantastic. If I had £1 for every person who has offered to be a taster, particularly at the Hawick distillery’s gin lab, where people can make their own gin, I would be a rich man. I am taking names if anyone here wants to sign up. The sites will be fantastic tourist operations.

I visited Springbank in Campbelltown with a number of friends, and I was struck by the number of people who were there because of the distillery. I met one group from Sweden who had matching blazers, and another group from America had whisky-tasting ties. I am not suggesting that we all had to get into uniform, but it reinforced the huge way in which a distillery puts a town on the map, raises its profile globally, brings more investment and creates more jobs than just those directly involved in the distillery.

[Margaret Ferrier]

I congratulate Speyside Distillers in my constituency. Founded in 1770, it has just secured a £2.3 million funding package to help it grow its market in the far east. Does my hon. Friend agree that the Chancellor should seriously consider duty reduction in next week’s Budget so that all distillers can expand, grow and contribute to the UK economy?

[Calum Kerr]

I agree with my hon. Friend. If the Minister has missed that point, why not reinforce it? I am sure he agrees with us. I notice a lot of nodding, and I am sure it is in agreement that the reduction should be at least 2%.

This is a hugely exciting situation, as is reflected in the energy and enthusiasm of the Members gathered here. Our export market is strong, and the hon. Member for Edinburgh West (Michelle Thomson) mentioned something that I wanted to highlight, too. The planned distillery in Hawick mentioned the duty in India. If we raise 76% in our own country, it puts us in a difficult position to argue for reduced duty elsewhere. Clearly, the Indian situation of 150% is unacceptable. I will be interested to hear the Minister’s comments on what we are doing about that.

We should also remember that the UK domestic market is the third biggest market by volume, with only France and the USA selling more. It still accounts for seven times more sales than China, so its importance to our producers is clear. We have already heard the case, so I will not reiterate how reducing duty is a win-win situation. By reducing duty, although there is not necessarily causality—good word—we might raise more money in total.

People often use the word “iconic” about whisky. I prefer to describe it another way. Whisky is literally the spirit of Scotland. It embraces all the very best aspects of our history and culture, and it is both romantic and emblematic. It uses our finest national ingredients and has strong green credentials. Of course, it is a product of very high quality and reputation. Just as the money it earns helps to bind together the UK economy, so its character and the joys of its depth and warmth bind Scots together as people. Whisky is one of Scotland’s great products and great successes. Now we need the Government to celebrate that success, to build on it and to work with the industry to grow this fantastic drink’s reach and prosperity. I urge the Minister to take that message away today. If he can secure the backing of his colleagues in Government, I am sure that is something to which we would all raise a glass.