§ Miss HoeyTo ask the Chancellor of the Exchequer what is his most recent estimate of the loss of revenue from cross-channel shopping; if he will make a statement on his underlying assumptions in formulating this estimate; and what estimate he has made of the number of cross-channel trips made annually for the primary purpose of avoiding excise duties. [14261]
§ Mr. Heathcoat-AmoryHer Majesty's Customs and Excise's latest estimate of the loss of revenue cross channel shopping is as follows:
Total revenue losses £ million 12 Months to June 1995 Excise duty VAT Total Alcoholic drinks 160 60 220 Tobacco products 120 30 150 Total 280 90 370 Source:
OPCS Omnibus Survey.
423WThe estimate of revenue loss assumes that only 50 per cent. of cross-border purchases of alcohol represent a loss of UK sales and duty; the other 50 per cent., is assumed to be additional spending associated with the lower prices on the continent. For tobacco, it is assumed that all cross-border shopping replaces UK sales. The calculation also requires assumptions about the average strength of alcohol purchased abroad and the average prices at which this alcohol or tobacco would have been sold in the UK.
The omnibus survey does not identify how many trips are made for the primary purpose of purchasing alcohol or tobacco abroad.