§ Mr. Ralph Howellasked the Chancellor of the Exchequer what would be the extra yield if duties on tobacco and drink were increased to equal their 1950, 1960 and 1970 values, respectively.
§ Mr. Peter ReesThe extra revenue, including the additional VAT, would be £3,150 million, £1,150 million and £1,600 million respectively.
The estimate was made by increasing the duty rates in line with changes in the retail price index. Some arbitrary 777W assumptions have had to be made because of changes in the structure of the duties during the period. The yield from restoring the real value of taxation on these goods is overstated as the comparison takes no account of the abatement of the duties which took place when VAT was introduced in 1973.