HC Deb 15 December 1992 vol 216 cc119-20W
Mr. Parry

To ask the Chancellor of the Exchequer if he will make it his policy to facilitate the convergence of tobacco and alcohol taxation in the EC by(a) reducing current United Kingdom taxes or (b) making no further increases in taxation, until such convergence is achieved.

Sir John Cope

A commitment to rate convergence is not necessary for the successful establishment of the single market and would unduly constrain my right hon. Friend's Budget flexibility.

Mr. Parry

To ask the Chancellor of the Exchequer when he expects convergence of tobacco taxes to be achieved in the European Community.

Sir John Cope

Recent directives have brought greater uniformity to the coverage and structure of EC tobacco duties, and have set minimum duty rates. For cigarettes the agreed minimum duty incidence is 57 per cent. of the retail price at the most popular price category. We accepted this reluctantly in the interests of agreement on a package of indirect tax measures, as we had been pressing for a minimum duty in cash terms. We intend to return to this issue in the first review of EC duty rates due by the end of 1994.

We are committed to reducing smoking in the United Kingdom and have already undertaken, in the White Paper "The Health of the Nation", Cm 1986, at least to maintain the real level of the tobacco taxes. During our presidency of the EC, we have strongly advocated to finance and health colleagues the merits of using taxation to support health objectives. To avoid our own health and fiscal policy being adversely affected, we would like to see upwards convergence of EC duty rates towards United Kingdom levels.