HC Deb 15 December 1970 vol 808 cc1099-100
16. Mr. Cronin

asked the Chancellor of the Exchequer what consideration he has given to the reduction of duties on wines and spirits.

Mr. Higgins

These duties will be included in the general review of indirect taxation before the Budget.

Mr. Cronin

Will the hon. Gentleman bear in mind that recent studies have shown that the relationship between demand and price is such that if duties were reduced he would receive in gross a much larger sum? Will he bear in mind that, as a consequence of high duties, people of small means are suffering considerable hardship in this festive season?

Mr. Higgins

Clearly the elasticity of demand for these products is very important, but I do not necessarily agree with the hon. Gentleman's conclusions about what that elasticity may be.

Mr. John Hall

Does not my hon. Friend agree that the present rate of duty has discouraged the selling of table wines in the last year, and does not that prove what the hon. Member for Loughborough (Mr. Cronin) has just said, that high duty discourages consumption?

Mr. Higgins

Clearly a duty of any kind must do something towards discouraging consumption. The question is, what is the exact ratio between change of duty and change of consumption? In that respect, in reply to my hon. Friend, it is necessary to have a run of figures over a time and to look at the matter dynamically rather than in the short run.