Alcohol Duty: UK Wine Sector

Katie Lam Excerpts

Tuesday 11th November 2025 Westminster Hall

[Katie Lam (Weald of Kent) (Con)]

I congratulate my hon. Friend the Member for Farnham and Bordon (Gregory Stafford) on giving us an opportunity to discuss this very important topic that affects so many people and businesses in the Weald of Kent, which proudly produces some of the finest wines in the country.

The principle of taxing alcohol by strength may make sense in theory, but wine is an agricultural product. Its strength cannot be engineered to order; instead, it varies naturally with climate and vintage. A system designed for factory production simply does not work for vineyards rooted in the soil. Sadly, our wine businesses have faced steep duty increases, ever more paperwork and, as a result, mounting costs across the board. In the Weald of Kent, small vineyards—often family-run and started from scratch—are grappling not just with higher duties but with higher label costs, greater packaging charges and yet more red tape.

In May, I wrote to the Minister’s predecessor to raise my concerns about the impact of alcohol duty on the wine industry. In his reply, he said that producers below 8.5% ABV could claim draught relief and small producer relief. That is true, but almost no wine sits below 8.5% strength. Might the Minister be able to tell us how many UK wineries actually claimed either relief last year?

[Alison Bennett (Mid Sussex) (LD)]

Like the hon. Lady, as a south-east MP, I have some amazing vineyards in my constituency, such as Bolney Wine Estate and Albourne Estate. They have told me about the challenges of the 8.5% cap that the hon. Lady has so articulately set out. It strikes me, however, that the previous Conservative Government brought in that cap. Does the hon. Lady think that current members of the Conservative party regret that decision from 2022?

[Katie Lam]

It is not for me to speak for them, but it is reasonable to say that the system we have does not work very well. It would not be right to pretend otherwise on behalf of my constituents who have to deal with it every day.

The Minister’s predecessor also said that the new system benefits lower strength wines, including many British wines. Since February, overall rates have risen. Might the Minister be able to tell us what share of English wines are paying less or more duty now than under the previous system? Finally, the previous Minister said that reforms would strengthen the tax base, yet as far as I can see, between April and September, alcohol duty receipts were almost £300 million lower than in the same period last year, despite the rates rise. It would be useful if the Minister could explain that.

Duty on 14.5% ABV wine is now almost half as much more again as it was in August 2023. As my hon. Friend the Member for Farnham and Bordon rightly pointed out, well more than half the shelf price of a bottle of wine is now tax. In France, the equivalent duty is a few euro cents, and in Spain, it is nothing at all. This duty system, combined with the general tax rises in the last Budget, is putting businesses at risk. Could the Minister please rule out any further duty increases in the upcoming Budget? Countless small producers in the Weald of Kent, and about 1,000 independent merchants across England, are already struggling under the weight of new bureaucracy and tax pressures.

Winemaking is not an exact science. As I mentioned, alcohol strength fluctuates from year to year, and small differences can double a producer’s duty bill. Large multi-national producers may be able to absorb that; small family wineries cannot. They cannot dial down their ABV without changing the taste or quality of the product. They cannot dilute wine without destroying it. These are new entrepreneurial businesses built on enormous risk and long-term investment. Many vineyards in the Weald have put everything they have into buying land, planting vines and waiting years before their first sale.

In my constituency, we are proud to host many of Britain’s leading wineries, including Chapel Down, Gusbourne, Balfour, Biddenden, Westwell, Woodchurch and Domaine Evremond—the list goes on. They bring visitors, jobs and pride to the Weald, and it is an utter pleasure to visit them all. We are also home to small start-ups, such as the husband and wife team I met last month in Hamstreet taking a leap of faith into the sector. It if is tough for the big names, it is tougher still for the small ones. Now, they face not just duty increases but rising national insurance costs, higher minimum wages, an end to flexible employment contracts, changes to inheritance tax relief, and packaging fees that penalise glass, which is the only viable material for quality sparkling wine.

When I last raised the broader issue of wine in England, I asked the Minister’s colleague in the Department for Environment, Food and Rural Affairs whether he would support the sector’s call for targeted help, and he said it was a matter for the Treasury. I say to the Minister today, “Please look again.” I know that he did not create the duty framework, but my hon. Friend the Member for Farnham and Bordon is right that we seem to have reached the tipping point at which our taxation system is so complex and onerous that it is collecting less money than a simpler lower-rate system would. It would be great to hear what plans the Minister has to support such an exciting and dynamic industry creating jobs and amazing export opportunities in rural parts of the country such as my home, the Weald of Kent.

Spring Statement

Katie Lam Excerpts

Wednesday 26th March 2025 Commons Chamber

[Rachel Reeves]

At the Budget, we set out £40 billion-worth of tax increases; we got rid of the non-dom tax status, increased capital gains tax, put VAT on private schools and tightened the rules around inheritance tax. We made those decisions so that we could invest more in our public services, including in our schools and our hospitals. Indeed, we have now committed to lifting defence spending within the next two years to 2.5% of GDP. On welfare spending, there is nothing progressive about writing off a generation of young people, so our targeted, personalised support will help people get back into work, lift them out of poverty, and help them to contribute both to their family finances and to our nation’s finances.

[Katie Lam (Weald of Kent) (Con)]

The right hon. Lady talks of financial responsibility, but will she please tell us when Government bond yields hit their highest levels since the global financial crisis, and who was the Chancellor of the Exchequer then? If she needs a clue, we can bring her a mirror.

[Rachel Reeves]

If we look at financial markets and follow them closely, we can see that the increases in bond yields in the UK, France and Germany have closely tracked each other. Global financial instability has affected countries around the world, and that is why it is so important that we continue to meet our fiscal rules, as I have set out today.

Public Finances: Borrowing Costs

Katie Lam Excerpts

Thursday 9th January 2025 Commons Chamber

[Mr Speaker]

Order. I hope that people who are standing were here at the beginning.

[Katie Lam (Weald of Kent) (Con)]

Within the last week, has the Chancellor spoken to the Governor of the Bank of England about the impact of soaring borrowing costs?

[Darren Jones]

The Chancellor meets the Governor of the Bank of England on a regular basis and will continue to do so.

Farming and Inheritance Tax

Katie Lam Excerpts

Wednesday 4th December 2024 Commons Chamber

[Katie Lam (Weald of Kent) (Con)]

The Government have made many claims about this policy that are not credible, but I wish to address only four.

First, they outrageously claimed that they would not do it. The Secretary of State, the right hon. Member for Streatham and Croydon North (Steve Reed), said last year:

“We have no intention of changing APR.”

He said that given the situation that farmers are in, a Government cannot possibly go to people and demand more taxes. I am sorry he is not here today to hear his own words.

Secondly, the Government claim the change is unavoidable as they desperately need the £500 million they claim that it will raise. The £500 million that they give to farms overseas and the £9 billion that they were all too happy to hand over to public sector unions says otherwise.

Thirdly, the Government claim that these people are rich. That completely misunderstands agriculture and the countryside. A farm is not an asset on a balance sheet. Our farmers are stewards of their land, holding it for the next generation and the generation after that. It is not the fault of farmers—especially those in places such as my constituency in Kent, with its astronomical house prices—that their land is so valuable in a way that does not at all reflect their farm’s profitability.

[Dave Doogan]

Is the hon. Member, like me, slightly irate when she hears UK Government Ministers talking about how the terms of the proposed agricultural property relief are much more favourable than the rate that other people have to pay? Inheriting the family farm is not like inheriting your mother’s house. You do not liquidate the asset and then live the high life; you just get on with the job that you were doing the day before and the day before that. There is no enrichment involved, making the Government’s policy utterly baseless.

[Katie Lam]

I could not agree more with the hon. Gentleman. My farmers tell me that these inheritance tax bills will take decades of profit to pay off, so they will keep doing the job that they were doing yesterday, but with a fraction of the cash that they had before—which was not a lot to begin with.

Finally, I want to address the idea that farmers can simply give farms away and live another seven years. It is incredible that the Government should introduce a tax in one breath and encourage people to avoid it in the next, and it makes a mockery of the whole policy. If it is true, then the tax will not raise any money for the Government, but instead increase bureaucracy and advisory fees for farmers. Mostly, though, for many people, it is not an option or it will not work. People have not been given enough time to plan for these changes. My constituent Ross grows hops in Tenterden. As he watched the Budget, his father, who is in his 70s, was suffering from sepsis and fighting for his life in hospital.

Especially in farming, our most dangerous industry, people cannot guarantee that they will live another seven years after having handed over the farm. Another of my constituents is in remission, having recently recovered from cancer. If the cancer returns, it is likely to be terminal. This constituent is in their early 50s. Are the Government seriously suggesting that my constituent should hand over, not just the farm, but the home that they live in to their teenage children?

Many of my farmers live in their farmhouses and are planning to work the rest of their days. They do not have pensions; they do not have plans that would allow them to spend the last decade of their lives—of course, it may be much more—no longer farming the land that they have farmed for the whole of their lives up until this point. Finally, to raise a point that seems to have been almost entirely ignored, doing this will incur eye-watering capital gains tax bills. For some of my farmers, it will mean hundreds of years’ worth of land revaluation that they similarly cannot afford to pay.

[Louise Jones]

Is the hon. Lady aware that the capital gains tax starts from the moment of a person deceasing, not from when they bought that land?

[Katie Lam]

What I have been told by my farmers, based on the tax advice that they have been given, is that the bills—and not just the inheritance tax on decades of profits—will be completely unaffordable.

Farming is hard. It is not like any other industry: it is a culture and a way of life. It is lonely, revenues are uncertain, profits are tiny and cash is tight.

[Andrew Pakes]

Will the hon. Lady give way?

[Katie Lam]

I will not, as I am coming to the end of my speech.

It is absurd and shameful that this Government, looking to fund their union pay rises and vanity energy projects, are putting this pressure on those who do the back-breaking work of growing our food. Farmers already have appalling problems with mental health and suicide: the Royal Agricultural Benevolent Institution tells us that a third of farmers may be depressed and half may be suffering from anxiety. One of my farmers says that his father is now kept up at night by the thought that he will leave his children a crippling debt that will make their lives financially impossible. Another told me that his father says that he just hopes that he dies before the changes come in. This policy is illogical, inconsistent, dishonest and wrong.