Duty Free is a subsidy for global warming. It must be stopped.
By George Monbiot. Published in the Guardian 1st May 1999.
For the International Duty Free Confederation, the war in Kosovo could not have come at a worse time. It was hoping that, at either the European Summit at the end of March or the informal gathering of heads of state in the middle of April, European leaders would turn their collective wisdom to the weighty question of whether or not we should continue to be entited to tax-free cigarettes. Regrettably the heads of state saw fit, instead, to devote their attention to the trifling matter of bombing the Balkans. Duty free sales in Europe, as a result, look set to be prohibited as scheduled on June 30th.
To the defenders of duty free shopping, this is a great disappointment. The British government had assured them that it would do its best to defend the exemption. Its loss, the confederation argues, will destroy thousands of jobs, raise the price of travel, and spoil the fun of millions of holiday makers. It’s astonishing that this self-serving bunkum should ever have been taken seriously.
Duty free is a subsidy that the poorest people in Europe pay to some of the richest. It undermines state attempts to discourage smoking and excessive drinking. It distorts the travel market in favour of aeroplanes and against more sustainable forms of transport, such as trains.
Even if duty free is removed, air travel will remain the most heavily subsidised means of locomotion in Europe. Aviation fuel and agricultural diesel are, as far as I can discover, the only engine fuels which attract no tax in the EU. As a result of this indemnity, the airlines are able to ensure that society pays the costs they should incur.
In the middle of April, the Intergovernmental Panel on Climate Change published its report on aircraft emissions. Air transport, it maintains, is currently responsible for 3.5 per cent of the total human contribution to global warming. This could rise to as much as 15 per cent by 2050. Technological fixes won’t be able to solve this problem: air travel is growing so swiftly that even a significant increase in fuel efficicency would be cancelled out. As global warming makes the drier parts of the world still drier, and the wetter parts still wetter, tens of millions of the world’s poorest people will be driven from their homes: in part because of the subsidised luxuries of the rich.
The local impacts of air travel are scarcely less severe. People living within ten kilometres of an airport consume 14 per cent more anti-asthma drugs and eight per cent more sedatives than the national average. The reading ability of 12-14 year olds whose schools lie under flight paths is impaired by 23 per cent. These issues, at last, are beginning to be taken seriously in some places: the European Union says that, from May 1, it will ban American aircraft whose emissions of pollutants breach European safety standards. The US has threatened to launch a trade war in retaliation.
Not only does duty free subsidise stress, pollution and global climate change, it also drains the public purse of £1.5 billion a year. While some of this money goes into the pockets of passengers, the state subsidy on drinks, tobacco and chocolates has made the trade immensely profitable. A survey published in Business This Week in April showed that the price of some duty free goods is almost identical to the price on the high street. Perhaps we shouldn’t be surprised to learn that the 18th richest man in Britain made his money from a chain of duty free shops.
Though the Balkans war has driven them back into their coffins, the duty free vampires have not yet given up their attempts to suck the rest of us dry. In 1993 their murderous perquisite won a six-year reprive. Today, by means of lawyers and lobbying, they’re attempting a similar trick. The German government has been talking about a compromise, under which airport sales would be subject to VAT, but excused duty until 2002. Tony Blair is said to support the idea. The International Duty Free Confederation has promised to fight abolition “until the last stroke of midnight on the 30th of June”.
The confederation will appeal, as it has done before, to our ignorance and greed. We will be told that something which belonged to us all will be taken away, that the bureaucratic and unscrupulous European Union is trying to deprive us of one of life’s last free lunches. In truth, these sales free some of the most profitable industries on earth from the duty to respect anything except their bottom line.