As Crawley MP and Chair of the Future of Aviation All-Party Parliamentary Group, which I initially established in 2020 to counter the effects of the Covid-19 pandemic, I continue to stand up for the Gatwick and UK aviation industry which is responsible for so many jobs in our area.
While the sector recovers its way back from the pandemic we need to be innovative in how we search for new ways for the industry to prosper further.
One such way is the introduction of duty-free shopping for passengers arriving at airports, as well as at international rail and ferry terminals in this country.
Last year, the Government introduced more generous duty-free personal allowances as a result of our departure from the EU, but without allowing duty-free stores on arrival into the UK.
The consequence of this is incentivising British nationals to spend money abroad. Currently, it is the economies of other nations which are benefiting at our expense.
By introducing arrivals duty-free stores we can make this UK tax policy work for UK consumers and businesses for the first time.
Such a move would see significant economic benefits to the UK, allowing our aviation and travel industry to play their full role in growing our economy, without costing the taxpayer.
I am leading efforts in Parliament in urging the new Chancellor of the Exchequer to deliver this boost to UK aviation and travel, which would ensure the creation of new jobs and the generation of additional tax revenues.
Already, some 65 countries have arrivals duty-free stores in place, including in Asia, the Middle East and Oceania. In recent years arrivals duty-free has been successfully implemented in countries such as Switzerland and Norway, without causing any negative effects to state revenue or high street sales.
This policy would be of no cost to the taxpayer, with costs borne wholly by industry. Research has shown that arrivals duty-free has the potential to increase UK sales of duty-free products by up to £100 million per year, also calculating that such an increase in sales, as well as the income tax from the jobs created, could generate an additional £50 million in tax revenues.
Whether or not this policy is implemented, these products will still be purchased: duty-free on arrival shops will ensure the economic benefits are realised in the UK.
Through leaving the EU, we must take the opportunity to drive retail sales higher than our neighbours. A 20 to 30 per cent passenger spending increase is predicted if duty-free sales on arrival to the UK was introduced.
The net result would be more jobs, more investment and more economic growth in communities throughout the nation.
Henry Smith MP
