§ There are compelling health arguments for increasing the duty on tobacco in real terms. Besides consolidating the increases on tobacco and tobacco products announced last December, I therefore propose to raise the duty on a packet of 20 cigarettes by 4p, with a corresponding increase on hand-rolling tobacco. A further increase on other tobacco products would not be justified at present; in particular pipe tobacco plays an important part in the life of many retired people. The increase, which will take effect from Monday 4th April, will produce an extra £150 million in a full year, including VAT.
§ The increase of 4p per 20 cigarettes which I have just announced will be added to the tobacco products duty as a flat rate per cigarrette. This is in itself a move towards the new structure of taxation on tobacco required by the EEC. The Financial Statement and Budget Report refers to the remaining stage of the transition, which will be reached on 1st January 1978. My hon. Friend will explain the details later in the debate. I propose no other changes in the excise duties.