§ Mr. SpearingTo ask the Chancellor of the Exchequer if he will tabulate in theOfficial Report those commodities subject to proposals for harmonisation of excise duty set out in the draft regulations of the Commission of the European Economic Community and tabulated in the eighth report of the Select Committee on European Legislation, HC 43 viii, stating for each category of goods (a) the basis of excise duty levied in the financial year 1987–88 and that proposed by the Commission, (b) the approximate respective revenue for each assessment that has accrued or would accrue to Her Majesty's Government, in 1987–88 prices, (c) the percentage increase or decrease in excise duty levied and (d) the approximate increase or decrease in retail sale price, together with indications of where the proposed increases in the rate of value added tax would further increase or decrease final price to the purchaser, adding totals for each broad category of commodity and totals of cumulative increase or decrease, together with net grand change in expected revenue.
§ Mr. Lilley[holding answer 18 March 1988]: The information requested is given in the tables.
Tables (a) and (c):
125WThe European Commission's proposals for harmonisation of rates of excise duty would require changes to the 1987–88 United Kingdom duty rates' as follows:—
Product Commission proposal 1987–88 United Kingdom duty rate Approximate per cent. rate changes Cigarettes 19.5 ECU (£13.11) per 1,000 plus 52–54 per cent. of retail selling price £30.61 per 1,000, 21 per cent. of retail selling price -11 Pipe tobacco1 Excise duty + VAT to comprise 54–56 per cent. of retail selling price £24.95 per kilogram -17 Cigars1 Excise duty + VAT to comprise 54–56 per cent. of retail selling price £24.95 per kilogram -49 Hand rolling1 tobacco Excise duty + VAT to comprise 54–56 per cent. of retail selling price £24.95 per kilogram -53 Road fuel Leaded petrol 34 ECU (£22.85) per hectolitre £19.38 per hectolitre + 18 Unleaded petrol 31 ECU (£20.84) per hectolitre £18.42 per hectolitre + 13 Derv 17.7 ECU (£11.90) per hectolitre £16.39 per hectolitre -27 Minor oil products Gas oil 5 ECU (£3.36) per hectolitre £1.10 per hectolitre + 205 Fuel oil 1.7 ECu (£1.14) per hectolitre £0.77 per hectolitre + 46 (1 ECU = £0.672099 at 14 March 1988). 1 It will be noted that in some cases the proposals would modify the basis upon which the duty is calculated, as well as the duty rates. TABLE (B)
Based on the main duty rates given above the approximate respective revenue for each assessment at 1987–88 prices is as follows:
£ million 1987–88 prices Product Commission proposal 1987–88 United Kingdom duty rates estimated net yield Alcoholic drinks 2,000 4,400 Tobacco products 4,350 4,800 Hydrocarbon oils 8,450 7,800 Because of the very large changes in duty levels involved, estimates of the revenue effects are subject to wide margins of error.
TABLE (D)
The duty rate changes implied by the approximation proposals would have the following effects on retail sale prices:
Approximate price changes (including consequential VAT at 15 per cent.) Product £ p Alcoholic drinks Spirits (per 70cl bottle) -2.50 Beer (per pint) -0.16 Table wine (per 75cl bottle) -0.74 Fortified wine 15 to 18 per cent. (per 70cl bottle) -0.90 18 to 22 per cent. (per 70cl bottle) -1.10 Tobacco products Cigarettes (per 20 King size) -0.12 Pipe tobacco (per 25 grams) -0.12 Cigars (5 whiffs) -0.26 Hand rolling tobacco (per 25 grams) -0.76 Road fuel Leaded petrol (per gallon) + 0.18 Unleaded petrol (per gallon) + 0.13 Derv (per gallon) -0.23 Minor oil products Gas oil (per gallon) + 0.10 Fuel oil (per gallon) +0.2