§ Mr. ParryTo ask the Chancellor of the Exchequer what conclusions he has reached from available information on the regressive nature of excise duties on tobacco and alcohol.
§ Mr. RyderThe amount of duty paid by a household depends on the expenditure it makes on tobacco and alcohol. As households are free to choose that expenditure in accordance with their own preferences, there is no necessary link between duty payments and income.
§ Mr. Chris SmithTo ask the Chancellor of the Exchequer what is the impact of indexation of excise duties by product on(a) inflation and (b) revenues in 1990–91 and a full year.
§ Mr. RyderThe impact of indexation of excise duties by product on the retail prices index and revenues in 1990–91 and a full year is shown in the table:
Duty Item Retail prices index Revenue/Yield 1990–91 Revenue/ Yield Full year Per cent. £ million £ million Tobacco 0.16 265 290 Petrol 0.14 480 495 Derv 0.01 110 115 Beer 0.07 160 175 Wine 0.06 55 55 Spirits 0.04 80 85 Vehicle excise duty 0.06 230 230 Cider negligible 5 5 Rebated oils negligible 15 15 Total 0.54 1,400 1,465 The indexation factor used is the 7.7 per cent. rise in the retail prices index between December 1988 and December 1989.
§ Mr. Chris SmithTo ask the Chancellor of the Exchequer what is the proportion of excise duties, broken down by product, paid by those on different incomes.
§ Mr. RyderI refer the hon. Member to an article entitled "The effects of taxes and benefits on household income, 1986" in the December 1988 issue ofEconomic Trends.