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Little, if anything, has changed since then, and the current proposal has nothing to do with the recession and everything to do with Diageo positioning itself in the global market for the next decade or so, as it is entitled to do. The difference this time is that the company's marketing gurus and desire for more shareholder value have convinced its executives that they can take the risk of breaking the link between the world's best-known Scotch whisky and its history. Furthermore, they must have been prepared to contemplate the disastrous social effects that the decision would have on the community
that I represent, which has so loyally served the company for about 200 years, and they must have considered that a price worth paying. I do not believe that it is.
Making the case for the company to think again is my job as a politician; it would be a dereliction of my duty not to do now what I did 12 years ago. Thankfully, we are dealing with what in Diageo's own words is a proposal. Its chief executive officer told me to my face that he would listen to an alternative. He has repeated that, both to the First Minister and to the Secretary of State for Scotland-and, no doubt, to the Scottish Affairs Committee. We intend to take him at his word.
I am not in the business of peddling false hopes and I realise how difficult this will be, but I am determined that all of us involved in this side of the argument will work together to produce an alternative that is at least as attractive as the proposal that is on the table at present. Scottish Enterprise has accepted the mandate to conduct the assessment of the underlying financial and business plan to enable us to come up with that alternative. The First Minister of Scotland has cast himself in the role of principal interlocutor with Diageo. Yesterday in a meeting in Edinburgh, local politicians and I made it perfectly clear to John Swinney, the Finance Secretary, and his officials and the senior management of Scottish Enterprise, that time is of the essence.
Diageo's 90-day consultation clock is ticking, and the unions are already embroiled in consultations. If those consultations are not to become simply an opportunity for the company to justify its proposal, the shape of the alternative must begin to emerge sooner rather than later. When the First Minister meets the chief executive officer of Diageo next week, this story must move on. The campaign is bringing the community that I represent together in a spectacular fashion, but behind closed doors the uncertainty is destroying its confidence in its future. That cannot be allowed to go on.
My constituents are very grateful to my right hon. Friend the Minister's Government for the support expressed by my right hon. and learned Friend the Leader of the House at Prime Minister's questions last week. However, on my constituents' behalf I have some messages for the Government and I look forward to hearing the Minister's response. First, the UK Government must stand ready to support, in any way that they can while respecting devolved responsibilities, any alternative proposal that emerges. I repeat that what has happened is not a consequence of recession and the decision is not driven by duty rates on spirits; consequently, the levers that the UK Government hold will be limited. However, as the counter-proposal emerges, and if we need to come for support, my constituents need to know that it will be there.
My right hon. Friend the Minister is a fellow Scot and a former adviser to the late Donald Dewar, and he has a long history of appreciation of Scots values and heritage. I do not have to explain to him just how important these historical links are to Scotland's most famous export. Does he share my concern about the facility with which whisky executives now seem to be able to trot out the justifications for not only breaking the link but for moving even more than 20 per cent. of whisky bottling offshore?
David Mundell: I thank the right hon. Gentleman and congratulate him on his campaign, which has my full support and that of my colleagues in Scotland. Does he agree that if Diageo is the blue-chip, high-quality global company that it holds itself to be, the 90-day consultation will be a genuine one in which a counter-proposal will be listened to and properly and legitimately evaluated, rather than being a sham exercise simply endorsing decisions that have already been made?
Des Browne: The hon. Gentleman has made an important point. I have spoken to the chief executive officer of Diageo, and I believe him to be a man of his word. He has given me his word that the company will listen to any alternative proposals during the consultation. I have to say that I was slightly concerned by the message that I was receiving, and the distillation of it, last Thursday, when I thought that a different message was in fact being given. However, I am satisfied that the man paid to run the company is telling me the truth and that it will listen. The onus is on us to come up with the alternative to persuade it. I do not underestimate how difficult that will be, but we need to get the opportunity to do it, and the company needs to listen to what we have to say.
I conclude by requesting that my right hon. Friend the Minister ensures that his officials keep in regular contact with their colleagues in Scottish Enterprise and in the Scottish Government, and that he gives this House an undertaking that he will keep us informed of any significant developments.
The Minister for Business, Innovation and Skills (Mr. Pat McFadden): I congratulate my right hon. Friend the Member for Kilmarnock and Loudoun (Des Browne) on securing this debate. I have spoken to him about this issue several times in recent weeks, and I know how much it means to him and to his constituents. He is of course deeply concerned about the jobs of the Diageo workers in his constituency and the effect that the loss of those jobs will have not only on the families involved but on the wider community in Kilmarnock and the rest of Ayrshire.
The Scotch whisky industry is hugely important to the UK economy. Figures published last month by the Scotch Whisky Association put the value of annual whisky shipments at more than £3 billion, earning £97 a second for the UK last year. Overall, the equivalent of more than 1 billion bottles of Scotch whisky were shipped all over the world-to north and central America, Australia, Europe and Asia. Whisky also means jobs. About three quarters of the UK's distilled alcoholic drinks enterprises are located in Scotland, with an estimated 41,000 people employed just in making, distilling and bottling whisky.
Diageo is a major player in all this. It owns 29 whisky distilleries in Scotland, and houses all its maturing Scotch whisky in Scottish warehouses. Twenty-eight per cent. of its net sales are from Scotch whisky; that is a very large figure when one considers that it has sales of about £8 billion. Diageo directly employs 4,500 people across 50 sites. The Government, through UK Trade and Investment, have strongly supported the Scotch whisky industry, as my right hon. Friend said, and we
have worked with Diageo in developing export markets. We very much appreciate the importance of that company and of the industry in general.
Diageo's proposal is twofold. The first part is to close the packaging plant in Kilmarnock-one of three in Scotland-along with the cooperage in Port Dundas that was mentioned. The second part is to make a new investment of some £100 million, creating 400 new jobs elsewhere in Scotland. I understand that, as my right hon. Friend said, this has been greeted in Kilmarnock, where the greatest number of jobs will go, with deep disappointment and dismay.
My right hon. Friend outlined the history; if someone knows the history, it means something to them. Kilmarnock is known as the home of Johnnie Walker whisky. Place has a huge role to play in whisky brands. As he said, when people buy whisky, they are not just buying a drink-they are buying into a story about place, heritage and tradition. That is one of the major reasons for whisky's success. This particular whisky has been blended in Kilmarnock for almost two centuries, ever since Johnnie Walker himself blended it and sold it in Kilmarnock high street back in 1819. In fact, one of the earliest incarnations of the whisky was called Walker's Kilmarnock. Since then, generations of Kilmarnock families, including Johnnie Walker's descendents, Alexander Walker and Alexander Walker II, have added to the story of the whisky, whether through the iconic square bottle introduced in 1870 or the distinctive label applied, I understand, at the precise angle of 24°.
The association of the brand with real people and real places helps make Johnnie Walker such a distinctive and successful whisky. In fact its influence goes beyond the pleasure of drinking, as it has a wider cultural influence. I could name Leonard Cohen, Van Morrison, The Band, The Streets and ZZ Top as just some of the artists to have featured Johnnie Walker in their lyrics. Films such as "The Dirty Dozen" and great television programmes such as "The West Wing" contain references to Johnnie Walker. Indeed, there is even a Japanese novelist, Haruki Murakami, who went so far as to create a character called Johnnie Walker.
Johnnie Walker is a whisky renowned throughout the world, with a far-reaching cultural influence. Perhaps that is one reason why there are yearly sales of more than 120 million bottles. Such is the product's worth that owning one bottle of a particular Johnnie Walker blue label of which I understand there are only 200 in existence would set one back an estimated $30,000.
The affinity between the town and the brand helps explain why the proposal to close the plant in Kilmarnock has aroused such passionate and vocal opinion in the local community. As my right hon. Friend said, there is a 90-day consultation on the plans, and Diageo has given guarantees that there will be no compulsory job losses in the next 12 months. My right hon. Friend the Secretary of State for Scotland has met the Diageo chief executive, to whom I spoke briefly about the matter today.
Campaigners in Scotland have urged Diageo to consider seriously any alternative options that the workers and Scottish Enterprise can come up with, including the possibility of relocating to different sites in Kilmarnock and Glasgow if suitable proposals emerge. The business of devising alternative solutions involves the First Minister, the Secretary of State for Scotland, the chairman of Scottish Enterprise and many others. They are working on putting together an alternative proposal for the company. As my right hon. Friend the Member for Kilmarnock and Loudoun said, a meeting yesterday was convened by the Scottish Government's Finance Minister, John Swinney.
For our part, we believe that the work that the Scottish Government and their agencies are taking forward is crucial. I hope and believe that the company is genuine about consultation and open-minded about possibilities. The UK Government will continue to work with the company and my right hon. Friend, and to engage with the work force about the best way forward on this crucial issue.
That the East Midlands Regional Grand Committee shall meet in Nottingham on Wednesday 9 September between 2.00 pm and 4.30 pm to take questions under Standing Order No. 117B (Regional Grand Committees (questions for oral answer)) and to hold a general debate on building Britain's Future: how the region will make the most of the upturn.