Exiting the European Union (Excise)

Duncan Baker Excerpts

Wednesday 3rd February 2021 Commons Chamber

[Duncan Baker (North Norfolk) (Con) [V]]

It is an honour to speak in this debate. Although I agree that the statutory instrument does not have the snappiest title—Travellers’ Allowances and Miscellaneous Provisions (EU Exit) Regulations 2020—we should not let that hide the importance of this useful piece of legislation. As a former finance director with the unenviable joy of filling out VAT retail export scheme paperwork, I can say that, had I still been sitting in my office, I would be rejoicing at this statutory instrument as it scraps the necessity, once and for all, to fill in such declaration forms.

Why is the SI of such benefit? Well, it is another benefit of leaving the European Union. Now that we have control of our laws and our regulations, we can set out our own policy and regulation around VAT and how we administer it. In my view, it is another piece of red tape and bureaucracy that we can cope without. Those red and cream VAT retail export papers—the 407 form—either have to be extended to all countries in the EU, as we fall onto World Trade Organisation rules, or we can choose to remove the scheme altogether.

Extending the scheme would cost us £1.4 billion a year and for what benefit? None, really. We can quite rightly remove the scheme altogether. There is no real advantage to subsidising customers shopping in the UK from outside the EU and reimbursing them from the VAT on the goods that they purchase. The scheme disproportionately affects central London and places such as Bicester Village, with their high concentration of non-EU customers participating in retail shopping. Let us be honest, many customers do not even use the scheme, let alone know about it, and they certainly do not visit the UK to take advantage of reclaiming VAT. As such, I entirely welcome the move and say let it be a useful boost to the Treasury.

Furthermore, for the estimated 67 million people travelling to the EU, there is the benefit that, for the first time in 20 years, we are providing duty-free sales to UK residents. As my hon. Friend the Member for South Cambridgeshire (Anthony Browne) has said, it is another benefit of Brexit. I agree with his assessment that bringing back duty free has something of the fun factor about it, and it will be enthusiastically met by the public.

Not only is this a welcome move for people travelling to the EU, but it is a huge boost for regional airports, which will now be able to offer duty free to their passengers. Like so many airports, Norwich International —it is not in my constituency, but, at a distance of 35 miles away, it is my nearest airport—has suffered so much, and I can see it welcoming this initiative entirely. This scheme is also extended to ports and international train stations.

Finally, our inbound alcohol allowances are now one of the most generous in the world, with a quadrupling of the entitlement that passengers returning from anywhere in the world can bring into the UK.

As we leave the EU, the newspapers may like to tell us of the bumps in the road that need straightening out. Well, here is a statutory instrument that adds benefit, simplification and removes bureaucracy, and I, for one, will not miss the pink and cream forms. It is a welcome move indeed.