§ I turn to alcoholic drink and tobacco. For tobacco, spirits and beer, I propose to incorporate the Regulator surcharges into the substantive rates of duty, but to make no other increases. In the case of tobacco and spirits, I am satisfied that further increases now would endanger 1022 the revenue. In the case of beer, an increase would have a disproportionately heavy effect on the retail price index. There will, however, be certain minimum alterations to take account of international commitments. Details of the new rates are given in the Budget Report. There is nothing in them to justify any increase in prices, or to affect the revenue in any significant degree.
§ Very much against my own personal inclination, however, I have decided that these considerations against a further increase do not apply to wine. Consumption has grown at a remarkable rate. Between 1960 and 1968 it rose by 125 per cent. for imported light wine, and 48 per cent. for imported heavy wine. The comparable figures are 35 per cent. for whisky, 10 per cent. for other spirits, and 18 per cent. for beer. Not all wine is imported, but 76 per cent. of it is, and the consumption even of the 24 per cent. which is not has been more buoyant than other alcoholic drinks. Our import bill, on wine account, has more than doubled since 1960—from £21.7 million to £44 million. I therefore propose to replace the surcharge, from today, by an all-round increase—above the pre-surcharge rates—of 9s. a gallon. This will mean an increase, above the present rates, of about 1s. 1d. a bottle for table wines, and about 9d. for most heavy wines such as sherry. This reverses the normal pattern that, when increases have taken place, heavy wines go up more than light; but I think that this is sensible in relation to the pattern of consumption. The additional revenue will be £10 million and the effect on the retail price index very small.