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Lord Inglewood: My Lords, I thank my noble friend for his expertise in this very recondite area.

Lord Eatwell: My Lords, is the Minister aware that on this side of the House we entirely support the construction of these harmonising indices which can only be valuable in international economic comparisons? Can he also tell us what role the Retail Prices Index Committee will play in the harmonisation procedure? It is overseeing the construction of our own retail prices index and has protected it against the unwarranted advances of successive Conservative Chancellors. Can he also tell us how the procedure is to deal with different structures of expenditures in different countries such as the different composition of housing expenditures?

Lord Inglewood: My Lords, I am reassured to hear that at least in this respect the noble Lord, Lord Eatwell, is in favour of government policies concerning European economic matters. As regards the point made by the noble Lord about the different elements in the index, the important thing to realise is that the proposed index is to be developed in three stages. The difficult problems to which the noble Lord, Lord Eatwell, alludes are to be dealt with at Stages 2 and 3. As of now, the detail of how that will be achieved has not yet been decided.

Lord Eatwell: My Lords, can the Minister tell me what role the Retail Prices Index Committee is to play in the exercise?

Lord Inglewood: My Lords, the proposals which we are currently discussing have been drawn up inter alia

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in consultation with the Central Statistical Office. I understand that the Retail Prices Index Committee reports to that office.

Lord Bruce of Donington: My Lords, will the noble Lord convey to his noble friend Lord Cockfield my great appreciation for his having directed my activities into another small, specialised area in connection with this matter? Will the Minister tell the House how the Government themselves will deal with the detailed requirements of Annex 1 to this particular directive? That sets out in very considerable detail the information that is required. Within the context of the changeover in the obtaining of statistics which is taking place after January and the swop to a new private enterprise firm, as distinct from the Department of Employment whose spare-time employees have previously been engaged in compiling the index, how is the Minister to provide the information which is required in Annex 1? If he has not already done so, will he please now do so?

Lord Inglewood: My Lords, I can assure the noble Lord that I have examined Annex 1 to the proposal. As he points out, it is a complicated document. It is because of the complications inherent in doing what the noble Lord describes that, as I mentioned earlier, the detail of Stages 2 and 3 have not been agreed. Stage 1 of the proposal essentially involves taking certain items out of the retail consumer price indices—the items differ depending on the member state involved. The discussions in which the Government are currently involved relate to the later stages and deal with the points to which the noble Lord referred.

Lord Clark of Kempston: My Lords, does my noble friend agree that the harmonisation of consumer price indices must depend on the harmonisation of the VAT on consumer goods?

Lord Inglewood: My Lords, no. I do not agree with my noble friend on that.

Scottish Whisky: Euro Legislation

2.50 p.m.

Lord Pearson of Rannoch asked Her Majesty's Government:

    Whether they consider that current and anticipated European legislation is helpful to the Scottish whisky industry.

The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, not in all cases. The Government give a high priority to avoiding unnecessary legislative burdens on British industry.

Lord Pearson of Rannoch: My Lords, I thank my noble friend for that reply and hope that it brings some comfort to the Scottish whisky industry which is, after all, our fifth most successful exporter and which is suffering from at least five pieces of unwanted and unnecessary Euro legislation at the moment. For instance, is my noble friend aware of the proposed

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directive on the circulation of animal feeds which requires the used barley or draff to be analysed in a laboratory at a cost of some £22 million per annum, thereby killing off the brewers' and distillers' grain trade which has a turnover of only £20 million per annum? Secondly, would my noble friend agree that some 53 per cent. of all Scottish milk cows are fed on draff and that cattle have been eating draff for hundreds of years without any noticeable ill effects?

Earl Howe: My Lords, my noble friend is right to emphasise the importance of the Scotch whisky industry for UK exports. With regard the proposed directive that he mentioned, the Government fully understand and support the concerns of the Scotch whisky industry. As the proposal stands, it could involve significant additional costs for the industry. In the Commission's expert group, UK officials have argued strongly against the over-prescriptive and potentially burdensome requirements of the proposal and have sought an exemption for moist feeds. The UK has also written formally to the Commission which has responded sympathetically. We hope that the exemption can be achieved in the Council working group.

Lord Bruce of Donington: My Lords, is the Minister aware that it is proposed—I do not know on whose authority—to enforce the freshwater fisheries directive of 1978, the provisions of which are entirely irrelevant to the interests of all concerned, including the environment? Will the Minister undertake to ensure that this extremely onerous regulation, which is agreed to be completely unnecessary, is not enforced?

Earl Howe: My Lords, the Government are aware of the concerns raised by the noble Lord. The freshwater fisheries directive of 1978 sets quality standards in order to protect fish. Clearly, that is an important matter. The standards include temperature standards, but there are specific provisions under which, in certain circumstances, the Government may make derogations from the temperature limits. If a distiller wishes to obtain a derogation, he simply needs to approach his river purification authority and ask it to consider making an approach to the Government for a derogation.

Baroness Carnegy of Lour: My Lords, may I ask my noble friend about the draft Council directive on the control of major accident hazards involving dangerous substances? Does my noble friend agree that the chemical composition of maturing whisky, how and where it is stored, and our own well enforced safety arrangements mean that the storage sites of maturing Scotch whisky simply cannot present a major accident hazard within the meaning of the draft directive? If that is so, does my noble friend know how it has come about that the Council has drafted the directive so as to catch those sites, and that it is now being backed by the Parliament, which wants to leave the draft directive as a blanket measure and expects the United Kingdom to seek a derogation? Where is the subsidiarity in all that, and where is the common sense?

Earl Howe: My Lords, my noble friend raises an important issue. The proposed directive to which she refers will include whisky along with other substances

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with a particular flashpoint. The Scotch Whisky Association has made a sound technical case for the exclusion of whisky from the scope of the proposed directive. The Government will argue for an exclusion for the storage of whisky.

Lord Mackie of Benshie: My Lords, returning to the Question—

Lord Stoddart of Swindon: My Lords—

Noble Lords: Order!

Lord Stoddart of Swindon: My Lords, as the noble Lord comes from a whisky-making country, I shall allow him to go first.

Lord Mackie of Benshie: My Lords, returning to the Question, the noble Lord, Lord Pearson, is absolutely right that the byproduct is extremely important to the Scottish whisky industry and to the farmers who buy it. If all the efforts to prevent the application of such provisions do not succeed and some form of regulation is produced which is burdensome, will the Minister ensure that his department and his staff do not make matters worse as they did in the case of the regulations governing slaughterhouses, resulting in the closure of many?

Earl Howe: My Lords, with respect to the noble Lord, he is leaping ahead of himself. The UK's aim is to preserve the status quo which requires analytical declarations only for the most commonly traded materials. That strikes a sensible balance between supplier and consumer interests. There is no evidence that farmers require the additional analytical information which is the subject of the proposed directive. In that sense I am entirely in sympathy with the noble Lord's comments.

The Earl of Onslow: My Lords, what happens if the European Commission takes not a blind bit of notice of Her Majesty's Government?

Earl Howe: My Lords, I would go so far as to say that it would be a nonsense if the provisions became law. The Government will take all measures to ensure that they do not.

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