§ Mr. Michael Spicerasked the Chancellor of the Exchequer by how much revenue to the Exchequer would be increased if excise duties on drink and tobacco were charged at their 1970 real values.
§ Mr. Peter ReesThe extra revenue, including the additional VAT, could be about £1,600 million in a full year.
Because of changes in the structures of the duties since 1970, certain arbitrary assumptions have had to be made in preparing this estimate, which is based on 1970 rates of duty increased in line with the retail price index. As the comparison takes no account of the abatement of duties which took place when VAT was introduced in 1973, the yield from restoring the real value of taxation on these goods is overstated.