§ 5. Mr. Michael McNair-Wilsonasked the Chancellor of the Exchequer what were the total increases in yield resulting from the increases in purchase tax and the duties on tobacco, spirits, wine, beer and petrol, respectively, between October, 1964. and June, 1970; and what are his latest estimates of the reduction in the annual yields for each as a result of the measures introduced since June, 1970.
§ Mr. Maurice MacmillanAs regards the second part of the Question, the purchase tax reductions which were made in July were estimated to reduce the annual yield of the tax by about £235 million.
The answer to the first part is as follows:
If the quantities of goods on which tax was paid in the financial year 1969–70 had been charged at the rates prevailing in October, 1964, instead of those prevailing in June, 1970, the yield of the taxes would have been less by approximately the following amounts:
£ million Purchase tax 390 Tobacco 270 Spirits 105 Wine 30 Beer 120 Road fuel 465 These figures are not, however, accurate indications of the increases in yield due to higher tax rates, since no reliable estimates can be made of the higher level of consumption that would have prevailed if tax rates had been unchanged since 1964.