HC Deb 06 June 1980 vol 985 cc851-2W
Mr. Cant

asked the Chancellor of the Exchequer whether he will list the domestic

Full year revenue yield Approximate increase in retail price of typical item
Budget proposal £ million To maintain real value since 1977*£ million Budget proposal To maintain real value since 1977*
Cigarettes 195 490† 5p 13½p on 20 cigarettes
Cigars 5p 10p on 5 wiffs
Handrolling tobacco 6½p 22p per 25 grams
Pipe tobacco 4p 20½p per 25 grams
Beer 205 400 2p 4p per pint
Spirits 40 50 50p £1.60 per bottle of whisky
Wine 40 120 8p 25p per 70 cl. bottle of table wine
Total 480 1,060
* Based on the movement of the retail prices index between January or April 1977 and February 1980. The February index was the latest available at the time of the Budget.
†Since the last substantive increase in duty rates in April 1977, the duty on cigarettes has been restructured and its specific and ad valorem elements subsequently varied. Comparisons over the whole period are complicated also by the interaction of VAT with the tobacco duty. For the purpose of this question, it has been assumed that the specific duty on cigarettes in April 1977 was at the level actually fixed in August 1979.

economic consequences of the 18 per cent. increase in real terms, allowing for inflation differentials with the rest of the world, of sterling's trade weighted exchange rate in the past 12 months.

Mr. Lawson

The rise in the exchange rate over the last year has had and will continue to have a direct impact on domestic prices, both by reducing the cost of imports and also by putting pressure on domestic producers to price competitively and to hold down the growth in their costs. To the extent that costs are not held down, there will also be a reduction in profits and in the level of output.