As the local MP for Gatwick, I am no stranger to the UK’s world class airports. They are our vital gateways, connecting us with the world and underscoring the UK’s global role in the aviation sector. It is an industry synonymous with innovation, connectivity and growth.
With this sector recovering to pre-pandemic levels of travel, I am urging the Chancellor to introduce duty-free stores on arrival in Great Britain. It is a straightforward Brexit benefit, a boost for airports across our country, and a welcome perk for travellers returning home. It promotes airport growth, supports jobs, and enables the development of important airport infrastructure and new routes for carriers to fly.
After the UK left the EU, the Government took the decision to substantially increase inbound duty-free allowances. This was a good decision that should be commended – providing an opportunity for Brits flying home from a work trip or their holidays to take advantage of a tangible Brexit benefit. However, what the Government failed to do at the time was make the necessary policy changes so that benefit was also felt by British airports and businesses.
Currently, passengers flying back into Britain from an international destination can only purchase duty-free products at their point of departure – abroad. This means that airports in Europe and further afield have directly benefitted from increased UK allowances, all at the expense of airports here. This is particularly damaging for our smaller, regional airports such as Teesside or Southampton, where duty-free revenues are particularly important for financial sustainability.
The solution to this imbalance is clear and can be implemented as part of the forthcoming Spring Budget. The Government should introduce arrivals duty-free for passengers arriving in Great Britain.
I am a proud advocate for UK aviation and our airports. In my role as Gatwick’s local MP and the Chair of the All-Party Parliamentary Group for the Future of Aviation, I have been leading the calls in Parliament for this boost for our airports for several years. I hope the Government is now open to making this simple, but meaningful change.
The case for arrivals duty-free is compelling. The creation of a new revenue stream would generate substantial benefits for British airports, supporting them to continue competing on the global stage. At present, 65 countries have now implemented duty-free stores on arrival. This includes most major travel hubs across Asia, the Middle East and Oceania, as well as countries in the European Economic Area. When introduced in Norway, duty-free on arrival in Oslo very soon produced enough revenue to fund other airport nationwide.
This is not just about bolstering our major airports like Heathrow, Manchester and, of course, Gatwick. It is also about supporting our regional airports, for whom non-aeronautical sources of revenue are particularly important.
Airports are not just transit points, they are bustling economic hubs. Gatwick provides significant value to our local community, supporting thousands of jobs across a sub-region from south London to the south coast, improving local infrastructure, and generating many millions of pounds for the area economy. Gatwick is a clear example of how airports can maximise the economic benefits of a region. This has a domino effect – supporting a broad spectrum of jobs in retail and hospitality.
The revenue generated from duty-free sales can be reinvested in airport infrastructure, leading to improved facilities, more routes, and increased passenger capacity. This, in turn, supports a wide range of jobs – from retail and hospitality to logistics and airport operations.
It is also a policy that directly benefits consumers. The modern passenger has come to expect duty-free as a key part of their travel experience. Allowing passengers to make their duty-free purchases at the end of their journey allows for a much more seamless experience, meaning they do not have to carry bulky or heavy purchases on their plane journey.
Better still, all this would come at no additional cost to the British taxpayer. By essentially repatriating sales that are already taking place at airports abroad, like Charles de Gaulle or Schiphol, arrivals duty-free will have next to no impact on domestic sales. This means no disadvantage to our high streets and no negative implications for overall Crown revenues.
At worst, arrivals duty-free would be a cost neutral policy in this Spring Budget. At its most successful, the growth in sales at British airports would drive new jobs and greater revenue for corporation tax-paying companies.
Support for arrivals duty-free is strong among my Conservative parliamentary colleagues. Last year, I wrote a letter to Treasury ministers, co-signed by 25 of my parliamentary colleagues. I also secured a House of Commons debate on the issue, putting the case directly to the Financial Secretary to the Treasury and met with him to make the case that arrivals duty-free is exactly the sort of policy that aligns with our values as Conservatives: good for business, good for growth, and fiscally sound.
The time is right for the Chancellor of the Exchequer to use this Spring Budget as an opportunity to take more advantage of our Brexit freedoms and introduce arrivals duty-free. It supports local economies, enhances the international competitiveness of our airports and aviation sector, and offers greater convenience to consumers – all without burdening the taxpayer.
Introducing arrivals duty-free in this Budget would be more than just a boost for our aviation sector. It would demonstrate the UK’s commitment to fostering growth and connectivity in a post-Brexit era.
Henry Smith MP
