Arrivals Duty Free at UK Airports

Lord Goddard of Stockport Excerpts

Thursday 30th March 2023 Lords Chamber

Asked by

[Lord Goddard of Stockport]

To ask His Majesty’s Government what assessment they have made of the (1) jobs created, (2) revenue generated, and (3) tax receipts generated, by the introduction of arrivals duty free at UK airports.

[The Parliamentary Secretary, HM Treasury (Baroness Penn) (Con)]

Duty free on arrival would place additional pressure on the public finances, to which excise duty makes a significant contribution. Any loss in tax revenue would have to be balanced by a reduction in public spending, increased borrowing or increased taxation elsewhere. Although there are no plans to introduce such a scheme, the Government keep all taxes under review.

[Lord Goddard of Stockport (LD)]

I thank the Minister for that Answer. Is she aware that arrival duty-free stores have had considerable success in Norway and Switzerland, where they provide additional commercial revenue streams for the airport to supply growth, and that passenger spending would increase by 30% if they were brought in in this country? Will the Minister ask the Treasury to commit to discuss arrival duty free with airports and ports and explore the wide-ranging economic benefits for the UK through consultation?

[Baroness Penn (Con)]

My Lords, we welcome engagement on this issue, and we have heard the case put forward for duty free on arrival. As I have noted, the Government believe it would place additional pressure on public finances. One challenge is that any potential uplift in spending potentially displaces spending with other domestic duty-paid retailers and therefore could compete against them. The Government would also need to be confident there was adequate infrastructure and resourcing to combat fraud and ensure compliance. We have no plans to consult on duty free on arrival, but we keep all taxes under review and we consider all available evidence as part of the tax-making policy process.