Spirits, Beer, Wine, Made-Wine and Cider

Orders of the Day — Finance Bill – in the House of Commons at 5:45 pm on 10th July 1985.

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Photo of Mr Barney Hayhoe Mr Barney Hayhoe , Brentford and Isleworth 5:45 pm, 10th July 1985

I beg to move amendment No. 129, in page 2, line 6, at end insert— '(3A) With respect to wine or made-wine imported into or produced in the United Kingdom on or after 29th July 1985, Schedule 1 to this Act shall have effect with the substitution—

  1. (a) for the words "of less than 15", in each place where they occur, of the words "not exceeding 15"; and
  2. (b) for the words "or not less than 15" of the words "exceeding 15".'.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

I have reconsidered my grouping with this amendment, and now propose to take Government amendment No. 129 on its own, and to take, separately, amendment No. 2, after amendment No. 1.

Photo of Mr Barney Hayhoe Mr Barney Hayhoe , Brentford and Isleworth

In the Committee debate on clause 5, strong representations were made about the adverse effect of the clause on the import of Cyprus sherry, and the hon. Member for Birmingham, Hodge Hill (Mr. Davis) persuasively and eloquently argued the case for a change. Subsequently, I met the Cypriot Minister of Commerce and Industry and members of the Cyprus wine trade. That meeting was followed by talks with the Customs and Excise, the Ministry of Agriculture, Fisheries and Food, the Cyprus high commission, representatives of the United Kingdom importers and a small deputation led by the hon. Member for Hodge Hill.

It became clear, as a result of all these discussions, that the difficulties did not centre on clause 5 but stemmed from a combination of European Community regulations, which were applied within the United Kingdom from January of last year and which contained an anomaly affecting medium and dry style Cyprus sherries, and the provisions of the 1984 Budget. The full impact on Cyprus sherry of this combination did not come to light last year because it was masked by the importers taking advantage of the loophole on blending that clause 5 is closing. It was not until that loophole was blocked that the serious nature of the Cyprus problem became apparent.

As I said in Committee and subsequently, there was no intention of causing a severe disadvantage to the Cyprus sherry interests when action was taken in 1984. I have sought to establish what is necessary to restore the pre-1984 position for Cyprus sherry. Part of that is the amendment that I now commend to the House.

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

Order. The hon. Gentleman has sat down.

Photo of Mr Terry Davis Mr Terry Davis , Birmingham, Hodge Hill 6:30 pm, 10th July 1985

I should like to thank the Minister of State for his kind words about my persuasion and eloquence in Standing Committee. I raised this issue on behalf of the Labour party and I was supported in Committee by my hon. Friends the Members for Wrexham (Dr. Marek) and for Kingston upon Hull, West (Mr. Randall). We were acting at the direct request of the Co-operative Wholesale Society, which is one of our biggest importers of Cyprus sherry.

I am assured that the society and the other members of the Wine and Spirit Association regard the Government's amendment as a most satisfactory solution to the problem which we drew to the Minister's attention in Committee. Not only will it avoid the impact of clause 5 of the Bill; it will also restore Cyprus sherry to the tariff classification which it enjoyed two years ago. As a result, the consumer will pay 50p less for a bottle of Cyprus sherry. Cyprus sherry will be cheaper now than it was as a result of the blunder made 12 months ago.

I am not blaming the Minister of State for what happened. It was obvious from our discussions in Committee and our private discussions afterwards that the Minister had not been told about this problem. I should like to pay tribute to his readiness to find a solution which will benefit not only the trade and the consumer, but also the economy of Cyprus. To be blunt, I believe the problem was known to the Government, to the Ministry of Agriculture, to the Foreign Office and to the Customs and Excise. Unfortunately, no one told the appropriate Treasury Ministers. I thank the Minister of State for acting so promptly and for responding so helpfully to our representations.

Photo of Dr John Marek Dr John Marek , Wrexham

This amendment is the result of co-operation between the Opposition and the Government. Very often the Opposition plead for something and the Government willy-nilly resist it. I hope the Minister will not take this unkindly, but I believe the situation about Cyprus sherry was not known to him precisely, at least in Committee. It was clear to both sides on the Committee that something was going wrong and that if something was not done quickly a long-established industry would fade away along with all the other long-established industries that have faded away during the course of this Conservative Administration.

I am pleased that the Minister and my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) got together and got to the bottom of the problem. I am pleased that the Minister has said the amendment will put the matter right. The problem in Cyprus may be a small one in relation to industry in this country, but it would have had very serious ramifications for the economy of Cyprus. I am glad that the Minister has solved the problem, that the economy of Cyprus will not be damaged, and that the economy of this country, certainly in the Manchester area and in Birmingham, will not be damaged either.

My hon. Friend the Member for Workington (Mr. Campbell-Savours) wants to intervene when the Minister comes in, if he does. I hope that, in a spirit of co-operation, the Minister will give way so that we can put this matter right and for once have unanimity in the House.

Photo of Mr Stuart Randall Mr Stuart Randall , Kingston upon Hull West

My contribution to this debate will be brief because we had a considerable debate in Committee.

I believe that the Government were not aware of the anomaly caused by the change which took place in the 1984 Budget, and the way in which the importers were mixing their various grades of sherry overseas. That affected the imports. That anomaly was having a detrimental effect not just on the economy of Cyprus and the standard of living of its people, but also upon the retail and distributive outlets in this country.

As my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Davis) pointed out, the Co-operative Wholesale Society is our largest importer of Cyprus sherry. I know that the society was deeply concerned about the effect of this anomaly. I agree with my hon. Friend the Member for Wrexham (Dr. Marek): I am delighted the Minister has had consultations, and from what he said they seem to have been very thorough. If the amendment is accepted, an anomaly will have been overcome, and that will be to the benefit of everybody.

Amendment agreed to.

Photo of Mr Dale Campbell-Savours Mr Dale Campbell-Savours , Workington

On a point of order, Mr. Speaker. The amendment was moved by the Minister. Why did he not seek to reply to the debate?

Photo of Mr Bernard Weatherill Mr Bernard Weatherill , Croydon North East

That is not a matter for me; it is a matter for the Minister.