HC Deb 11 March 1991 vol 187 cc374-5W
Mr. Amos

To ask the Chancellor of the Exchequer what representations he has received in favour of(a) an increase in the taxation of tobacco products and (b) decreasing the taxation of tobacco products in his forthcoming Budget; if he will list them; and if he will make a statement.

Mrs. Gillian Shephard

I have received many letters this year about the taxation of tobacco products. Those asking for a freeze outnumber those asking for an increase. I do not propose to list all those that have written. However, most of those asking for a freeze consist of small shopkeepers acting on a campaign organised by the Tobacco Alliance while the majority of those asking for an increase consist of various health organisations, regional health authorities and members of the public.

Mr. Amos

To ask the Chancellor of the Exchequer what was the yield, in current and in real terms, from tobacco tax in each of the last five years for which figures are available; what is the estimated yield for the current year; and if he will make a statement.

Mrs. Gillian Shephard

Following is the available information:

£ million
Tobacco Duty Receipts Estimates of VAT on Tobacco Expenditure
At Current prices At 1989–90 prices At Current pices At 1989–90 prices
1985–86 4,459 5,470 920 1,130
1986–87 4,755 5,650 990 1,180
1987–88 4,767 5,450 1,000 1,150
1988–89 4,990 5,380 1,050 1,130
1989–90 5,035 5,035 1,080 1,080

The 1990 autumn statement forecast of receipts in current prices from tobacco duty for 1990–91 was £5.5 billion. Comparable forecasts for the other elements shown in the table are not available. The next estimate for the yield from tobacco duty in 1990–91 will be published in the Financial Statement and Budget Report.

Mr. Amos

To ask the Chancellor of the Exchequer what would be the effect on the retail prices index of raising the tax on a packet of 20 cigarettes by(a) 20p, (b) 32p and (c) 50p; and if he will make a statement.

Mrs. Gillian Shephard

If the increases in tax were fully reflected in cigarette prices the direct effects on the retail prices index would be approximately as follows:

Increases in tax on 20 cigarettes Percentage points effect on RPI
20p +0.4
32p +0.6
50p +0.9

Mr. Amos

To ask the Chancellor of the Exchequer how much revenue would arise in a full financial year from raising the tax on a packet of 20 cigarettes by(a) 20p, (b) 32p and (c) 50p; and if he will make a statement.

Mrs. Gillian Shephard

The revenue yield from these tax increases can be estimated by using the tax revenue ready reckoner in table 4.7 of chapter 4 of the 1990 autumn statement.