Cigarettes (Hansard, 27 January 2003)

§ Matthew Taylor
To ask the Chancellor of the Exchequer pursuant to his answer of 16 January 2003,Official Report, column 748W, on cigarettes, what assumptions he made regarding affordability and profitability of trips; and if he will make a statement. [92777]

§ John Healey
The profitability and affordability of trips depend on several factors, including the price of tobacco products, the cost of passage to other EU member states and the level of disposable income available to different shoppers. Variations in cost between routes and products, in shoppers' income and in their understanding of existing unlimited shopping rights, prevent explicit or quantifiable relationships being derived about the likely response—in terms of the 603W number of shoppers, the frequency of their trips and the scale of their purchases—to changes in indicative levels for tobacco. The assumptions used to inform the estimates of the revenue impact of the new indicative levels reflect Customs' best judgment on the basis of the available evidence.

§ Matthew Taylor
To ask the Chancellor of the Exchequer pursuant to his answer of 16 January 2003,Official Report, column 748W, on cigarettes, what proportion of travellers who previously purchased at the indicative level were expected to increase their purchases to the new indicative level; and if he will make a statement. [92797]

§ John Healey
As I stated in my answer of 16 January 2003, HM Customs and Excise's survey data of cross-channel travellers shows that the majority of travellers make no purchases of cigarettes and that, of those who do make purchases, two-thirds purchase below the previous indicative level of 800 cigarettes, and that a further 15 per cent. purchase above. The recent change to the levels can be expected to have little effect on the shopping patterns of these travellers.
The assumptions for the public finance forecasts relate to the impact on behaviour of those travellers purchasing at the previous indicative levels for tobacco. For this group of travellers it was assumed that: those who are purchasing with intent to resell illegally in the UK would increase their purchases to the new indicative level; and the remainder would increase their purchases to an average level of 1,600, equivalent to a three-month supply for an average smoker.