Duty-Free Sales (Hansard, 3 December 1984)

§ Lord Gainford
My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie)
My Lords, I am assuming that my noble friend is inquiring about the sales made from the duty-free shops located at the airports and the Dover hoverport. The value of such sales is a commercial matter, and I regret to say that the figures are not available.

§ Lord Gainford
My Lords, I am sorry that the figures are not yet available; perhaps my noble friend will write to me when they are. The purpose of this Question is to ask my noble friend whether he has any 1108 information as to whether the considerable use of such shops is aiding British trade and employment.

The Earl of Gowrie
My Lords, I am glad to be able to confirm to my noble friend that that is indeed the case on both counts. Although Her Majesty's Customs and Excise do not maintain statistics of duty-free shops sales—which I think he would agree might interrupt their successful commercial development—the number of international passengers has been continuing to increase. Duty-free price levels related to increasing duty-paid shop prices have also increased. So turnover will have increased by value which will be a thoroughly good thing for the economy.

§ Lord Simon of Glaisdale
My Lords, were the figures not formerly published by the Customs and Excise authorities under the head of "extra statutory concessions"? If so, why has that practice discontinued?

The Earl of Gowrie
My Lords, I suspect that it was on grounds of economy.

§ Lord Beswick
My Lords, I should like to ask the noble Earl three questions. First, if the airports require additional revenue over and above the landing charges, would it not be better to give a straightforward Treasury subsidy so that we can see what it amounts to? Secondly, if tax concessions are to be made, would it not be more logical to make them available to those people who stay in this country and spend their money, rather than to those who go overseas? Thirdly, is any consideration given to the fire hazard posed by the quantities of spirits stored in the luggage lockers?

The Earl of Gowrie
My Lords, I am delighted that the noble Lord, Lord Beswick, is to add his very considerable weight and influence to the liberalisation of trade, domestically as well as abroad. I am certainly on his side as regards that matter. However, it is a fact of life that greater maintenance of records by Her Majesty's Customs and Excise will lead to greater staff time and costs which would be adverse to the trade which the noble Lord is recommending. I think that, with me, he would welcome that the profits generated by duty-free shop sales have been able to compensate for losses under normal airport operations. That seems to me to be good housekeeping. As to the fire hazard. I was not aware that there was one; but I shall look into the matter.

§ Lord Simon of Glaisdale
My Lords, arising out of the noble Earl's supplementary answer to my supplementary question, when an extra statutory concession is made by the Executive, constitutionally should not that be reported to Parliament?

The Earl of Gowrie
My Lords, I was not aware that Parliament was in any doubt about the fact that there is a duty-free system within Europe for those who are travelling abroad and landing at another port.

§ Lord Avebury
My Lords, surely the Customs and Excise authorities keep records of the amount of sales which qualify under this concession? If they do not, how would they be aware that evasion—perhaps on a 1109 massive scale—was not taking place? Can the Minister make up his mind whether it is for reasons of economy that the figures are not revealed or because of the first explanation that he gave—that of commercial confidentiality? If it is the latter, why not just ask the concessionaires whether they would have any objection to the figures being released?

The Earl of Gowrie
My Lords, it may be that I am simple-minded, but I do not think that it would be very easy to evade on a massive scale duty-free sales in this way, as the noble Lord has implied. The noble Lord is at least as experienced a traveller as I am, and he will be well aware of how difficult that would be in practice. My point about economy is that it would seem to me to be asking Her Majesty's Customs and Excise to undertake an unreasonable burden in maintaining statistics of duty-free shop sales because the maintenance of statistics is a very expensive business.

§ Lord Thorneycroft
My Lords, is my noble friend aware that if he can save money by recording rather fewer figures in this world, he shall have a great deal of support from many quarters?

The Earl of Gowrie
My Lords, I have been bailed out by my noble friend, not for the first time, and I hope not for the last.

§ Lord Cledwyn of Penrhos
My Lords, the noble Earl was unable to reply clearly to the authoritative supplementary questions put to him by the noble and learned Lord. Therefore, as a result, the House is in some confusion. Would he be good enough to write to the noble and learned Lord and see that a copy of the letter is placed in the Library?

The Earl of Gowrie
My Lords, with respect to the noble Lord the Leader of the Opposition, I do not think that I was unclear at all. I said that it was an expensive and time-wasting business to maintain statistics of duty-free shop sales. I am thoroughly in favour of duty-free shop sales. I was able to confirm to my noble friend that they had been rising, with consequent effects for employment and the economy.

§ Lord Cledwyn of Penrhos
My Lords, in reply to the question, the noble Earl said that he "suspected" it was due to economies by the Government. He said that he suspected; that is to say, he was not sure about it. Therefore, would he be good enough to write to the noble and learned Lord?

The Earl of Gowrie
My Lords, I confirm that "suspicion" was an unreasonable use of English in that context. It is a matter of economics; and, as the noble Lord is well aware, economics are very important.

§ Lord Campbell of Alloway
My Lords, as a consumer, will my noble friend the Minister agree that there seems to be rather an unduly high profit mark-up in what in effect is a monopoly situation?

The Earl of Gowrie
My Lords, my noble friend has asked me this question as a consumer. As a venal consumer, I am afraid that I am prone to make use of the duty-free facility when it is available to me. But, in the light of what my noble friend has said, I shall now look at my own consumptive practices in a more rigorous manner.

§ Lord Avebury
My Lords, if there are no statistics available how can the noble Earl say that the sales are rising?

The Earl of Gowrie
My Lords, it is a matter of correlating statistical information, and not that people do not know what is going on.

§ Lord Underhill
My Lords, will the noble Earl agree that the commercial undertakings concerned must keep records for their own accountancy purposes? Will he therefore give some indication of how much money is being saved in just adding all those together?

The Earl of Gowrie
My Lords, I refer the noble Lord to my previous answer. Of course, the duty-free shops keep close records, which are open to inspection, on the volume of sales which they undertake. The difficulty I was outlining related to having centralised records of these of the kind that I was being asked for.

Lord Morris
My Lords, may I ask my noble friend whether the rents that are paid to the airport authorities and the harbour boards by the establishments which run these duty-free shops are geared to total turnover? If so, I should have thought it would be quite easy to work out what was the total turnover.

The Earl of Gowrie
My Lords, it is certainly true that the airports and harbours concerned do very well out of this practice and, as a result, reduce the costs on the rest of us.

§ Lord Molloy
My Lords, would the noble Earl the Minister not agree that what has caused concern this afternoon is that he agreed with the noble Lord, Lord Thorneycroft, that the fewer figures given, the better? Is it not a fact that if the Executive, with the support of Parliament, has said that these figures should be provided, it is the noble Earl's job to provide them and not treat them as if they do not exist?

The Earl of Gowrie
My Lords, I am quite prepared to provide Parliament with information of this kind if Parliament will will me the means to do so.