Clause 4
Finance (No. 2) Bill
5:15 pm
John Healey (Financial Secretary, HM Treasury; Wentworth, Labour)
The clause increases the rate of excise duty charged on still wine in line with general inflation. The duty on sparkling wine is unchanged. Wine accounts for about 28 per cent. of total alcohol duty receipts. The increase, with the VAT, is equivalent to1p on a glass of wine and 4p on a bottle of wine. It is necessary, as is the measure on beer, to maintain this important source of revenue to support our investment in public services.
I am also aware that there are concerns in the wine trade, which argues that the demand for wine is beginning to weaken. We recognise that and that the wine trade plays an important part in our economy. However, we need to maintain our revenue and support for public services. The increase is modest and is in line with inflation only. It does no more than maintain the real value of the revenue from that part of the alcohol duty regime, so I commend the clause to the Committee.