Alcohol Taxation — House of Commons, 2022-07-07
Topic: Mixed Topics
Richard Gordon Thomson (Scottish National Party, Centre-left): Let me first say what a pleasure it is to speak in the debate, and congratulate the right hon. Member for Vale of Glamorgan (Alun Cairns) on securing it. Let me also declare my membership of the Scotch whisky all-party parliamentary group, and say how pleased I am to see that, after a day of turmoil, the Minister is still in her place. I am going to have to get to grips with two other Ministers whom I shadow, so it is nice to see some continuity in at least one area of my responsibilities on the APPG Alcohol duty has been ripe for review for a considerable time, on the grounds of complexity and economic impacts, but also on the grounds of the social and health impacts that it may have in influencing behaviour. I think—indeed, I know—that this could have been done at any time. Contrasting levels of duty are applied across the European Union, and the UK was towards the higher end of that, but many other countries had considerably lower rates, so it is certainly not a Brexit benefit that the UK Government are now able to turn their attention to this matter The former Chancellor clearly had an agenda to simplify the duty regime. It is perhaps understandable that the current Chancellor has not had a chance to share his thoughts with us. Of course, he may not even be Chancellor past the autumn; it will depend on how the cards fall. In any event, I think that this is the right moment for us to have this debate and reopen some of these issues Ideally, to my mind, what any Government ought to be looking for is a regime that supports domestic innovation—product innovation and technological innovation, of which there is a great deal in the alcohol-producing sector—along with investment and production, while also keeping the social and health impacts of alcohol consumption in mind. On that measure, in terms of the review of the parameters that have been set out so far, I have always taken a dim view of the apparent bias against stronger alcohols such as whisky, vodka and gin, and I will go on to explain why As I have said, I am a member of the all-party parliamentary group on Scotch whisky, and in my constituency in the north-east of Scotland there are three significant distilleries. The Glendronach distillery is near the village of Forgue, and the Ardmore distillery is near the railway at Kennethmont. The third is Glen Garioch and, unusually for a Scottish distillery, it sits not in the middle of an iconic natural landscape but slap bang in the middle of the town of Oldmeldrum. If you drive through Oldmeldrum, you drive through the different buildings of the distillery, depending on the route you take, and it really is quite remarkable. If you are in the north-east of Scotland, I would encourage you to visit it. Give me a shout and I’ll come along with you—it would be great to be able to show off such a distillery As well as producing excellent products, those distilleries are right at the heart of our visitor economy. Together with the rest of the whisky sector, they make an enormous contribution to Treasury revenues and to the UK balance of payments. It is not just the whisky that is important; many distillery sites in Scotland also produce the spirits needed to make vodka or gin. In Aberdeenshire there is a burgeoning sector of craft gin manufacturers and those who produce the botanicals to go along with that. There is real innovation there, and while I would not wish to overstate this, it seems iniquitous that we are taxing that domestic product at such a high rate and as a consequence perhaps influencing consumer behaviour to prefer other forms of drink that are not produced domestically Those levels of duty are disproportionate, and that is harmful on a number of levels. For one thing—I know from my discussions with the industry how significant this is—it becomes very hard when trying to strike trade deals, which the Government are obviously trying their best to do at the moment, to encourage other jurisdictions to bring down the sometimes punitive rates of duty that they apply to these products. There is also the inhibition that that, as well as some tariffs, puts on the bourbon sector. People might think that bourbon is a competitor product, but in many ways it is a complementary product due to the nature of the ownership of the distilling industry. Quite often the multinational companies trying to sell bourbon in these markets are also investing heavily in new production and new practices in the Scotch whisky industry, so it is all interlinked. The high level of taxation that we put on that product on the shelf is not very helpful Finally, let me say something about minimum unit pricing. This policy was introduced in Scotland, and I think it is fair to say that it was quite controversial at the time. It was attacked for a number of reasons, some good and some not so good. We have now experienced the policy in action for some time, and I can happily report that there have not been the predicted traffic jams at the border on the A1 at Berwick or on the M74 at Carlisle due to people doing booze runs. That did not happen. The most valid criticism of that policy approach was not so much about the increase in price as about the fact that the benefit of the increase did not go to the Government to invest in health measures but instead rested with the retailer. That was a fair criticism. I think it is fair to say that if any Scottish Government had had control over the range of duties applied to various drinks, they might have had a minimum price in mind, but they would have used duty as a mechanism rather than imposing that on the retailers.