HC Deb 15 December 1976 vol 922 cc1531-2
The Chancellor of the Exchequer (Mr. Denis Healey)

To finance this additional expenditure on investment and employment, I must look for some contribution from the specific Revenue duties, which are fixed in money terms and are therefore continually eroded by inflation.

I have decided to use my regulator powers to increase by 10 per cent. all the revenue duties charged on tobacco and alcoholic drinks. The increases will come into force for the Customs duties on imported tobacco at midnight tonight, and for the duties on tobacco products and drinks on 1st January. They will have no effect on prices during the Christmas and New Year holidays.

If fully passed on, these duty increases, taking into account the consequential increase in VAT, will add rather over ½ per cent. to the Retail Price Index. They will raise the tax charge on a pint of beer of average strength by a little under 1p, and on a standard bottle of spirits by about 31p. They will increase the charge on a standard bottle of table wine by about 5p, and on a bottle of fortified wine such as sherry by about 7p. The tax on a packet of 20 filter cigarettes of average size will be increased by about 4p. The additional revenue raised will be £50 million in the remainder of this financial year and £280 million in 1977–78.

I believe that the British people will accept that these increases in the cost of less essential goods are fully justified at this time, particularly when the proceeds are intended to create more jobs and more investment.