HL Deb 20 January 1986 vol 470 cc1-3
Lord Gainford

I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether competition for duty-free shops in airports will be increased to minimise prices and maximise efficiency.

The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness)

My Lords, the scope for increasing competition is limited by the restricted space which is available in airport terminals. The airport authorities seek to achieve the benefits of competition by inviting at regular intervals competitive tenders for the concessions for operating the duty-free shops.

Lord Gainford

My Lords, I thank my noble friend the Minister for that Answer. Can he tell me whether Her Majesty's Government willl encourage this work, particularly in view of the very good contribution that these shops make toward the export drive?

The Earl of Caithness

Indeed, my Lords, I would confirm to my noble friend that we wish to encourage the work and in fact expand it. As my noble friend probably knows, the Monopolies and Mergers Commission reported on the 10th December last year and we are looking at this report to see whether we can improve the competitive position.

Lord Tordoff

My Lords, could the noble Earl tell us what will be the position with regard to competitive tendering when the airports are privatised?

The Earl of Caithness

My Lords, the airports will be subject to the normal competition rules.

Baroness Gardner of Parkes

My Lords, is the noble Earl the Minister aware of how uncompetitive our airports shops are in comparison with those in most other countries?

The Earl of Caithness

My Lords, I believe it varies from airport to airport, but some of our airport shops are very competitive.

Lord Jacques

My Lords, is the Minister aware that to those acquainted with retailing the gross profits of these shops appears scandalous and in no way competitive?

The Earl of Caithness

My Lords, I think they are very competitive with the duty-free goods which can be offered on the airlines themselves.

Lord Bruce of Donington

My Lords, has the noble Earl given consideration to whether the use of the term "duty free" is thoroughly justified?

The Earl of Caithness

Better people than I, my Lords, have given consideration to that.

Lord Monson

My Lords, can the noble Earl say whether the Government have any plans to follow the excellent example which has been set by Singapore and one or two other countries, and allow duty-free goods to be sold to incoming passengers as well as to outbound ones? Would this not enormously enhance airline safety as well as saving millions of gallons of aviation fuel every year?

The Earl of Caithness

My Lords, I do not know whether that comes within the report of the Monopolies and Mergers Commission, but as we are undertaking a study of it, I shall bring the matter to the attention of my right honourable friend.

Lord Bruce of Donington

My Lords, since the noble Earl has already replied that consideration has been given by Ministers better qualified than he is to whether the term "duty free" is a correct one, will he now tell the House what is the result of their thoughts upon the subject? Is it or is it not a justifiable title in the mind of Her Majesty's Government?

The Earl of Caithness

My Lords, so far as I am aware, it is justified in everybody's mind.

Viscount St. Davids

My Lords, is the noble Earl aware that in the eyes of many travellers these shops are in fact making much too high profits and putting up charges much too high and that competition is not as it should be? Should not the whole matter of competition be taken much further?

The Earl of Caithness

My Lords, I can see the logic behind the argument of the noble Viscount but the profits from these shops go towards reducing the cost of airport charges for other passengers as well.

Baroness Seear

My Lords, the noble Earl the Minister has still not given an answer to the question which was put by the noble Lord, Lord Bruce of Donington. Either the Government are collecting tax on these goods or they are not. Which is it?

The Earl of Caithness

My Lords, I think I shall write to the noble Baroness on that matter.

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