HC Deb 19 March 1968 vol 761 cc278-9

I now come to the taxes on alcoholic drink and tobacco. First drink. I have already explained that, though I think it right to raise the greater part of the revenue I require from indirect taxation, I should like to do so in as selective and unregressive a way as possible. I therefore abstain from raising the beer duty, I do, however, propose to raise the duties on spirits by £1 1s. 6d. a proof gallon, equivalent to 2s. 6d. on a bottle of whisky or gin; and to increase the wine duties by 6s. a gallon for sherry, port and other heavy wines, and by 3s. a gallon for table wines, equivalent to 1s. a bottle and 6d. a bottle, respectively. There will be similar alterations in the duties on British wine. All these increases will come into force tomorrow and it is estimated that they will produce additional revenue amounting to £8 million from spirits and £7 million from wines.

In the case of the tobacco duty, I propose an increase from tomorrow of 4s. 4d. a lb., which will mean a price increase of 2d. per packet of 20 for most brands of cigarettes, and 3d. to 4d. an oz. for pipe tobacco.

I expect this to raise an extra £30 million of revenue a year. The relative modesty of this proposal is accounted for partly by some lack of buoyancy in the revenue—which I have of course taken fully into account in calculating the yield—and partly by the sharply adverse effect of a tobacco increase on the cost of living. But smokers of cigarettes, which account for about 90 per cent. of the revenue from tobacco, may derive some offset later on from possible developments on coupon trading and on resale price maintenance.