Excise Duty (Hansard, 12 January 1981)

§ Mr. Torney
asked the Chancellor of the Exchequer if he will give details of both the percentage and money increases in excise duty rates on (a) spirits, (b) beer, (c) light wines, (d) heavy wines and (e) made wines since February 1974, and the separate excise duty receipts there-from in both money and percentage increase terms for the fiscal years 1973–74 to 1980–81.

§ Mr. Peter Rees
Since February 1974 the excise duties have increased as follows:

Miss Richardson asked
the Chancellor of the Exchequer by what percentages he estimates the specific duties on tobacco and alcoholic drinks would need to be increased in the 1981 Budget to restore them in real terms to their level when increased (a) in 1977 and (b) in 1980; how much revenue such increases would raise; and what would be the effects on the prices of typical items.

§ Mr. Peter Rees
The Government have not published a forecast of the retail price index at the time of the 1981 Budget. On the basis of the movement of the retail prices index up to November 1980, which is the latest available, the information is:
455W

Duty increase to maintain real value since increases in Full year revenue yield Approximate increase in retail price of typical item

(a) 1977 (b) 1980 (a) (b) (a) (b)

(%) (%) (£m) (£m)

wine 40 5.1 105 15 26/3p per 70 cl bottle of table wine

Total 900 155

* Since the substantive increase in duty rates in April 1977, the duty on cigarettes has been restructured and its specific and ad valorem elements subsequently varied. Comparisons over the whole period are complicated also by the interaction of VAT with the tobacco duty. For the purpose of this question, it has been assumed that the specific duty on cigarettes in April 1977 was at the level actually fixed in August 1979 and that the real value of that duty is under consideration.

§ Miss Richardson
asked the Chancellor of the Exchequer what would be the revenue raised by each 1 per cent. increase in the duties on tobacco, beer, wine, and spirits; and what would be the effect on the price of these items in each case.

§ Mr. Peter Rees
The information is:

Full year revenue yield Approximate increase in retail price of typical item

(£ million)

Cigarettes^* ½p per packet of 20

Cigars 15 ½p on 5 whiffs

Handrolling tobacco ½per 25 grams

Pipe tobacco ½p per 25 grams

Beer 10 negligible

Spirits 4p per bottle

5 1p per 70 c l bottle of

Wine table wine

Total 30

^* 1% increase only in the specific duty on cigarettes.

	Duty increase to maintain real value since increases in	Full year revenue yield	Approximate increase in retail price of typical item
	(a) 1977	(b) 1980	(a)	(b)	(a)	(b)
	(%)	(%)	(£m)	(£m)
wine	40	5.1	105	15	26/3p per 70 cl bottle of table wine
Total			900	155
* Since the substantive increase in duty rates in April 1977, the duty on cigarettes has been restructured and its specific and ad valorem elements subsequently varied. Comparisons over the whole period are complicated also by the interaction of VAT with the tobacco duty. For the purpose of this question, it has been assumed that the specific duty on cigarettes in April 1977 was at the level actually fixed in August 1979 and that the real value of that duty is under consideration.

	Full year revenue yield	Approximate increase in retail price of typical item
	(£ million)
Cigarettes^*		½p per packet of 20
Cigars	15	½p on 5 whiffs
Handrolling tobacco		½per 25 grams
Pipe tobacco		½p per 25 grams
Beer	10	negligible
Spirits		4p per bottle
	5	1p per 70 c l bottle of
Wine		table wine
Total	30
^* 1% increase only in the specific duty on cigarettes.