Henry Smith MP has led a House of Commons Adjournment Debate (on Wednesday, 6th September) calling for the Government to provide a boost for the aviation, travel and tourism sectors by introducing duty-free shopping on arrivals at airports, international rail and ferry terminals in Great Britain.
Commenting after the debate had concluded, Henry said;
“The introduction of arrivals duty-free stores would offer a significant boost for British competitiveness with a direct benefit for airports including Gatwick.
“These are sales currently taking place abroad on departure – we can act to ensure they happen instead on arrival in Britain, boosting our economy rather than those of global competitors.
“As Crawley MP and Chair of the All-Party Parliamentary Group for the Future of Aviation this is a cause I’ll continue to pursue.
“I’m grateful to the Financial Secretary to the Treasury, Victoria Atkins, confirming that she is happy to meet myself and colleagues to discuss this issue further and I look forward to making further representations going forward.”
Speaking during the debate in the House of Commons, Henry said;
“I rise to speak as the Member of Parliament for Crawley, a constituency that proudly includes Gatwick Airport within its boundaries, and as the Chair of the All-Party Parliamentary Group for the Future of Aviation, for which I declare an interest. It is in those roles that I have been determined to support the aviation, travel and tourism industries as they continue to recover from the Covid-19 pandemic, and I call on the Government to introduce duty-free shopping on arrival at airports and international rail and ferry terminals in Great Britain.”
On the effect of this policy on the recovery of the travel industry from Covid-19, Henry said;
“As the sector continues to recover, we know that travel hubs need non-aeronautical revenues such as retail and duty-free. Indeed, as much as half of total airport income can come from those activities. All UK airports and international terminals will benefit from duty-free on arrival stores.”
On the implementation of arrivals duty-free stores in Norway, Henry said;
“Being a non-EU nation, Norway introduced duty-free on arrival stores in 2005 and there was an immediate impact on Aberdeen airport. Sales to Norwegian-bound passengers fell by 40 per cent, with the average spend per passenger halving.
“The resulting growth on commercial revenues in Norway was invested in route development, which allowed it to attract new airlines by lowering charges. Norway now has the lowest aeronautical charges per passenger in the whole of Europe.
“More passenger growth, more income and more investment—all without the need for the Government to fund support.”
On the impact on British competitiveness, Henry said;
“We know that more than 60 countries have now implemented duty-free on arrival, including most major travel hubs in Asia, the Middle East and Oceania, as well as fellow non-EU countries. If the EU implemented arrival duty-free stores before we did, it would have a detrimental effect on British ports of entry.
“European Travel Retail Confederation modelling predicts arrivals duty-free gross value added boosts would be some €300 million for Spain, €190 million for Italy and €580 million for France. Such sales would have a devastating impact on UK port departure stores.
“However, the UK Government could get ahead and legislate for arrivals stores first, future-proofing the sector.”
On the importance of choice and the passenger experience, Henry said;
“The modern passenger has come to expect the retail element of the travel experience. Duty-free purchases on arrival will contribute to a more seamless travelling experience. Arrivals shops are a separate market in competition with departure duty-free sales from airports abroad. The lack of arrivals duty-free is placing us at a competitive disadvantage.”
Concluding his speech, Henry said;
“In closing, it is clear that the introduction of arrivals duty-free stores would support economic growth and provide a timely boost to the recovery of aviation, travel and tourism from the pandemic. This plan would be funded by industry and would be at worst cost-neutral for the Exchequer. It is a low-risk policy that has already proven successful in some 65 countries around the world. There would likely be no impact on domestic high street sales, due to limited market overlap and differing customer behaviours in duty-free stores.
“By introducing duty-free stores on arrival, the Government can reaffirm their commitment to supporting the aviation, travel and tourism sectors, and the economic prosperity that they afford by providing employment to so many of my constituents, and to communities across the entire country.
“The policy is also popular with the electorate, so I hope that the Government will act swiftly to achieve this additional Brexit freedom.”
Please click here for the full text and video of Henry’s speech.