§ I turn now to taxes on spending. Given the need to keep a tight fiscal position, I have decided that the excise duties, taken as a whole, must rise broadly in line with inflation. Within that overall constraint, however, I have some modest adjustments to make.
§ First, for vehicle excise duty, I propose a number of changes to remove anomalies in the taxation of different types of lorries. These changes will also dramatically reduce the present vast number of different VED rates. Last year's Budget removed 80 different VED rates, and I propose to eliminate a further 188 today. This will greatly simplify the system.
§ Vehicle excise duty on cars—the tax disc—will be unchanged once again this year at £100. Nor will there be any change in VED for public or private sector buses, coaches, taxis and many lorries.
§ I will recoup the cost of this by increasing petrol and DERV duties by rather more than strict revalorisation would justify. These will rise by 10 per cent. This will add 9p to a gallon of DERV and almost 11 p to a gallon of leaded petrol. For unleaded petrol, the cash increase will be smaller, at around 9p per gallon. This will widen the tax differential even further in favour of unleaded petrol. This will now amount to almost 16p a gallon. The market share 1021 of unleaded petrol has increased fivefold, to 30 per cent. since the changes in the last Budget. I hope and expect to see it increase even further.
§ For alcohol, with one exception, I propose to raise the duties in line with inflation. This will put 7p on a bottle of table wine, but only 2p on a pint of beer. Spirits, however, have enjoyed a duty standstill since 1985. I propose therefore an increase of 10 per cent., which will increase the price of a bottle of spirits by 54p.
§ Cigarettes also were not increased last year. This year I propose a 10 per cent. increase in duty, which will put 10p on a packet of 20 cigarettes. The duty on cigars will rise similarly, and will add 5p to the cost of a packet of five small cigars. But I do not this year propose any increase in duty on pipe tobacco. This at least will be one measure which should command the total support of the right hon. Gentleman the Leader of the Opposition.
§ Mr. Neil Kinnock (Islwyn)But not of my wife.