Tobacco Products (Hansard, 29 January 1997)

§ Mr. Cummings
To ask the Chancellor of the Exchequer what estimate he has made of the additional excise and VAT revenue yield in a full year which would result from reducing the minimum guide levels set for tobacco products provided under article 9 of directive 92/12/EEC. [12565]

§ Mr. Oppenheim
No such estimate has been made.

§ Mr. Cummings
To ask the Chancellor of the Exchequer when he expects to set minimum guide levels for tobacco products under article 9 of directive 92/12/EEC. [12563]

§ Mr. Oppenheim
Article 9 of directive 92/EEC, setting down guide levels which are used to help distinguish between commercial consignments, which must bear duty in the member state of destination, and private consignments which will have borne duty in the member state where the goods were brought, was implemented in UK legislation on 1 January 1993 by the Excise Duties (Personal Reliefs) Order 1992, SI 1992 No. 3155. For the benefit of the travelling public, these guide levels are reproduced in Customs and Excise notice No. 1 "A Guide for Travellers", copies of which have been placed in the Library.

§ Mr. Cummings
To ask the Chancellor of the Exchequer what assessment he has made of the impact of article 9 of directive 92/12/EEC on the United Kingdom yield of excise duty; and what plans he has to reduce the minimum guide levels set for tobacco levels. [12564]

§ Mr. Oppenheim
The purpose of article 9 is to help distinguish between commercial consignments, which must bear duty in the member state of destination, and personal consignments which will have borne duty in the member state where the goods were bought.
Customs' estimate of excise duty revenue lost from legitimate personal importation of duty paid alcoholic drinks for the year ending 30 June 1996 is £145 million and for tobacco products, £55 million, making a total of £200 million. Additionally, value added tax receipts of £60 million for alcoholic drinks and £15 million for tobacco products, a total £75 million, are estimated to have been lost. Thus the estimate for the total loss of tax revenues from such legitimate cross-border shopping for the year ending 30 June is £275 million.
There are no plans to reduce the minimum guide levels for tobacco products. The UK did well to negotiate, against considerable resistance, the existing levels and it would require unanimous agreement to change them. This is most unlikely to be forthcoming, given that some member states seriously doubt the need for any such indicators.

§ Mr. Malcolm Bruce
To ask the Chancellor of the Exchequer if he will estimate the(a) first-year and (b) full-year costs of raising tobacco duties by the equivalent of 5p per standard packet of 20 cigarettes. [12749]
237W

§ Mr. Oppenheim
[holding answer 27 January 1997]: Increasing the tobacco duties by the equivalent of 5p per standard packet of 20 cigarettes plus value added tax would yield £210 million in 1997–98. The first year yield would depend on the date of implementation assumed. Costings take account of the effects on behaviour where they are likely to have a significant effect on the yield and any consequential changes in receipts from related taxes including VAT; and they are measured against a non-indexed base.