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Duty-free scandal - deceit and mis-information from big business |
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On the 1st of July 1999, duty-free was abolished for goods purchased on trips within the EU. The EU had announced its intent several years ago but concerned about its loss of privilege, the travel industry launched a campaign to retain duty-free. The campaign was both deceitful and misleading but, shamefully, the British government supported the industry calls.
While duty-free is nice for those who fly, it is simply tax avoidance. It cost the UK government and thus UK citizens well over £400 million pa. When everyone else has to pay tax on goods such as drink and cigarettes, there is no justification for people who happen to be flying abroad avoiding tax. Duty-free is, in effect, a subsidy to airlines and better-off people (it is mainly the better-off who fly).
A strident campaign was organised by industry in which ridiculous claims of job losses and increases in price of holidays were made. Unsubstantiated figures as high as 140,000 jobs at risk and 30,000 lost in the EU were quoted if duty-free were to be abolished. BAA even mounted a poster campaign at Gatwick Airport, claiming that the price of a holiday for a family of 4 would rise by £60. A proper study was made by the European Travel Research Federation for the industry, which came up with a far smaller effect on jobs and prices. These results were ignored in the campaign ... for obvious reasons.
The EU, thankfully, was unmoved by these claims. It also pointed that any job losses that did arise from abolition of duty-free would be offset by jobs created as a result of the revenue diverted from the duty-free subsidy. A point which any intelligent observer could well understood.
Now, a few months after abolition, there is no evidence of the claimed job losses and price rises. So much so that the Financial Times has called claims of the industry fraudulent.
There is an environmental aspect to duty-free. Carrying bottles of drink across the sky wastes fuel and increases emissions of pollutants and greenhouse gases. Using figures from the industry study, the Aviation Environment Federation (tel 020 7248 2223) has estimated that abolition of duty-free will save 300 million litres of fuel in the EU and reduce emissions of carbon dioxide by 760 thousand tonnes .