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Tobacco Products
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]
29 Jan 1997 : Column: 237
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.
Mr. Rowlands:
To ask the Chancellor of the Exchequer on how many occasions Finance Ministers have discussed the European Commission document COM (96) 328: "A Common System of VAT"; and if he will make a statement [12480]
Mr. Oppenheim:
None. The European Commission's programme for a common system of VAT, outlined in document COM(96)328, has not been discussed by EC Finance Ministers, although it was briefly presented--for information only, and with no debate or discussion--by Commissioner Monti to a meeting of the Economic and Finance Council in October 1996.
Mr. Malcolm Bruce:
To ask the Chancellor of the Exchequer what is his Department's policy in respect of extending value added tax to areas (a) zero rated and (b) exempt; and if he will make a statement. [12798]
Mr. Oppenheim
[holding answer 27 January 1997]: The Government have no current plans to extend VAT to goods and services that are either zero rated or exempt from VAT. Furthermore, any changes to European Community provisions in respect of VAT require unanimity, and so there is no question of the UK being forced to alter any aspect of our current VAT system.
Mr. Forman:
To ask the Chancellor of the Exchequer if he will estimate the cost to the Exchequer in 1997-98 of moving to a single 20 per cent. rate of income tax, assuming the abolition of all reliefs, allowances and exemptions, except for a personal allowance of £5,000 transferable between spouses. [13012]
Mr. Jack:
The estimated full-year cost of introducing a single 20 per cent. rate of income tax at 1997-98 income levels would be about £11 billion. This assumes a personal allowance of £5,000 transferable between spouses and the abolition of all other income tax allowances, and mortgage interest relief, tax relief on employee's contributions to occupational pensions and personal pension schemes, reliefs for tax-exempt special savings accounts, personal equity plans and profit-related pay, national savings certificates, employee share schemes and charitable giving.
This estimate does not take into account the substantial behavioural effects which might result from the introduction of such a change, nor do they allow for any subsequent changes to the tax system, such as changes to tax relief on employer's contributions to pension schemes or relief for investment income in pension funds.
29 Jan 1997 : Column: 238
Mr. Malcolm Bruce:
To ask the Chancellor of the Exchequer if he will estimate the (a) first-year and (b) full-year costs per person of raising the basic rate of income tax by 1p in the pound for (i) each adult in the United Kingdom and (ii) each income taxpayer in the United Kingdom. [12748]
Mr. Jack
[holding answer 27 January 1997]: The average tax increases at 1997-98 income levels of increasing the basic rate of income tax by 1p is about £28 in the first year and £38 in a full year for each adult--aged 18 and over--and about £49 in the first year and £66 in a full year for every income taxpayer in the United Kingdom.
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 fuel duties by 3p per litre or equivalent. [12751]
Mr. Oppenheim
[holding answer 27 January 1997]: Increasing the duty rates on petrol and diesel by 3p per litre plus VAT would yield £1,400 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.
Mr. Malcolm Bruce:
To ask the Chancellor of the Exchequer if he will estimate the cost of reducing the value added tax on domestic fuel from 8 per cent. to 5 per cent. [12794]
Mr. Oppenheim
[holding answer 27 January 1997]: The estimated cost of reducing VAT on domestic fuel and power is about £430 million in a full year. This estimate is based on the costings methodology explained in annexe A to chapter 6 of the 1997-98 "Financial Statement and Budget Report". It therefore incorporates assumptions about changes in behaviour in response to the reduced rate of VAT, but excludes any effect of the tax change on the overall level of income and spending.
Ms Ruddock:
To ask the Chancellor of the Exchequer if he will list the (a) White Papers, (b) Green Papers, (c) consultation papers, (d) draft regulations and (e) circulars, for which his Department has been responsible issued in 1996 which his Department assesses could give rise, (i) directly and (ii) indirectly to significant environmental effects. [12700]
Mr. Oppenheim
[holding answer 27 January 1997]: The Government are fully committed to taking significant environmental impacts into account, where appropriate, alongside all other relevant costs and benefits during policy appraisal. The Treasury's commitment to this is demonstrated, for example, by the air quality package announced by the Chancellor as part of this year's Budget.
29 Jan 1997 : Column: 239
Mr. Malcolm Bruce:
To ask the Chancellor of the Exchequer what estimate he has made of the cost to the Exchequer of mortgage interest tax relief in (a) 1997-98 and (b) 1998-99. [12792]
Mr. Jack
[holding answer 27 January 1997]: The estimated total cost of mortgage interest relief in 1997-98 is £2.4 billion. This estimate is provisional. It is based on the assumption, by convention, of no change from the current estimated average building society interest rate of 6.43 per cent. The cost of the relief in 1998-99 would depend on future interest rates, the future distribution of the number and value of outstanding mortgages, and the rate and limit of relief.
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