§ 21. Sir George Youngasked the Chancellor of the Exchequer what representations he has recently received from Action on Smoking and Health concerning the relationship between the tax on tobacco and its consumption.
§ Mr. Denzil DaviesMy hon. Friend the Financial Secretary met a deputation, including the hon. Member for Ealing, Acton (Sir G. Young) on 11th March. It represented that the price of tobacco is a major determinant of changes in consumption and advocated that the tax on cigarettes should be substantially increased so as to discourage young people from starting to smoke them and to encourage existing smokers to adopt safer smoking habits.
§ Sir G. YoungIs the Minister prepared to use the fiscal weapons at his disposal in order to reduce the consumption of tobacco in this country?
§ Mr. DaviesThe points made by the deputation are most important and are being studied. I am not entirely convinced that fiscal policy is always the right way to protect the public as the hon. Member would wish.
§ Mr. PavittDoes the £50 million spent by the tobacco companies in promoting sales, particularly sales to young persons, qualify for tax relief?
§ Mr. DaviesAny sums spent by a company for promoting its sales, of tobacco or otherwise, are usually treated as a business expense if they are wholly and exclusively incurred.
§ Mr. Peter BottomleyIf the Government put up the duty on tobacco and raised tax allowances to balance, it would have a relatively adverse effect upon the retail price index. Will the Minister therefore give some thought to preventing that effect percolating through the rest of the economy?
§ Mr. DaviesIf indirect taxes generally are increased, that has an effect on the retail price index.