§ Mr. Peter BottomleyTo ask the Chancellor of the Exchequer what were the assumptions for the calculations of the estimated revenue for taxation on whisky and whiskey before and after the last three proposed changes; and if he will estimate the actual revenue in the current year and the past two years and(b) the revenue maximising tax rate. [41141]
§ Mr. Heathcoat-AmoryThe estimated revenue effects for changes in spirits taxation follow normal practice. The responsiveness of spirits sales to changes in price is based on elasticities produced by the Institute for Fiscal Studies. It is assumed that changes in duty are fully passed on to consumers and that consumers' real incomes are constant. The effect on revenue reflects both the changes in revenue from spirits itself and also the change in revenue from diversion of expenditure into or from other goods as a result of the duty change,
The actual revenue from excise duty on spirits in the last two years and the forecast for the current year are as follows:
Revenue (spirits) £ billion Actual 1993–94 1.7 Actual 1994–95 1.8 Forecast 1995–96 1.9 The assumptions underlying the revenue costings described imply that current duty levels are below the revenue maximising rate.