§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what assumption about the price elasticity of demand for spirits was used by his Department in 1994 263W in consideration of altering the levels of domestic duty on spirits in the Budget. [29891]
§ Mr. Heathcoat-AmoryThe Chancellor takes into account a wide range of factors when determining possible tax changes. The revenue implications are estimated using a computer model produced by the Institute of Fiscal Studies. That model has a wide range of both own and cross price elasticities for various categories of consumption. The own price elasticity for spirits is -1.07.