§ Mr. RedwoodTo ask the Chancellor of the Exchequer what would be the additional revenue to the Exchequer in (i) 1989–90 and (ii) a full year if(a) there were a 5 per cent. increase in duties on cigarettes, tobacco and alcoholic drinks, (b) value added tax were levied on new construction at 15 per cent., (c) the taxable benefit of company cars were increased by 25 per cent. and (d) mortgage interest relief were limited to the standard rate of tax.
§ Mr. Norman Lamont(a) It is estimated that the net additional revenue yield from a 5 per cent. increase in the duties on cigarettes, tobacco and alcoholic drinks would be £355 million in 1989–90 and £385 million in a full year;
(b) It is estimated that, if value added tax were levied on new construction, both domestic and non-domestic, at 15 per cent., the net additional revenue yield from the private sector would be £1,280 million in 1989–90, and £1,670 million in a full year. Because of the uncertainties involved in estimating the effects of such a change, particularly on the housing market, the figures should be taken as no more than a general indicator of the additional revenue which would accrue;
(c) It is estimated that the revenue yield from a 25 per cent. increase in the scale charges for company cars would be £120 million in 1989–90 and £140 million in a full year;
(d) It would be premature to provide an estimate for 1989–90 of the additional revenue from the restriction of mortgage interest relief to the basic rate, since the yield will depend on the amount of mortgage lending and the level of interest rates as well as on the 1989–90 income tax rates and bands. The revenue yield in a full year at 1988–89 levels of lending, interest rates and tax rates would be £330 million.