§ 3.21 p.m.
§ Lord BeswickMy Lords, 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 Governmment what economic advantage is gained by the Treasury by forgoing the collection of taxes and excise duties on certain goods sold at international airports.
§ Lord Young of GraffhamMy Lords, no direct economic advantage accrues to the Treasury, but there are benefits to the United Kingdom economy as a whole including the important contribution of 1158 duty-free shops to the economies of airport and cross-Channel ferry operators and as a shop window for British goods.
§ Lord BeswickMy Lords, I thank the noble Lord for that Answer. Is it not a fact that in earlier days the opportunity of exploiting the duty-free device was a convenient way of subsidising the development of what was a private enterprise? Is there not now a distinct difference when, in effect, the Treasury will be subsidising a private company?
§ Lord Young of GraffhamMy Lords, no; to the best of my knowledge the Treasury will be subsidising private citizens.
Lord Bruce of DoningtonMy Lords, while giving due weight to the observations of my noble friend Lord Beswick, will the noble Lord agree that since all indirect taxation is by nature regressive, any relief that can be granted is extremely welcome?
§ Lord Young of GraffhamMy Lords, no, but I agree that any relief from taxation is certainly to be welcomed.
§ Lord BeswickMy Lords, does the noble Lord agree that if we wish to help private citizens it can be done in other shops and not necessarily in those at the airport? Is it not a fact that in this case the beneficiary is not the seller of the actual article but, to a large extent, the private company (as it will be) because of the rates that it can now charge?
§ Lord Young of GraffhamMy Lords, I am tempted to use one of the forms that I have been given, but I suppose that it will not do as an Answer. It is true that the revenue from duty-free shops at airports helps to carry the cost of airport facilities. If it were not there the cost would be higher and in the end the consumer would be worse off.
§ Lord BeswickMy Lords, I should like to ask a final question. When considering this matter is any weight given to the safety factor? Is it not a fact that the encouragement of extra loading of inflammable liquid adds to the fire hazard?
§ Lord Young of GraffhamMy Lords, I have not seen the calculations but I should imagine that, as a proportion of the fuel on the aircraft, the bottles of whisky and vodka would not add much. However, I am sure that, as with all such matters, the storage of materials is taken into account in looking at the safety aspects of aircraft.
§ Lord John-MackieMy Lords, is not the expression "duty-free" a transgression of the Trade Descriptions Act? It is nothing like duty-free; it is only partly duty-free when one looks at the price of a bottle of whisky on sale at London Airport.
§ Lord Young of GraffhamMy Lords, technically it is free of duty but the cost may not show the full rebate.