Latest posts by Martin Moodie (see all)
- Why Penny’s Bay remains key to the big prize - December 3, 2021
- They may both be Greek but Omicron is not Armageddon - November 28, 2021
- Flying with butterfly wings towards better times - November 24, 2021
“Screw the box, I think outside the straight jacket.”
So utters the Mad Hatter in the most recent film reprise of English author Lewis Carroll’s timeless 1865 novel Alice in Wonderland, the much-loved tale of a young girl who drops down through a rabbit hole into an underground fantasy world inhabited by a series of strange creatures.
One of Alice’s increasingly bizarre adventures sees her stumble into a tea party, hosted by the Mad Hatter, alongside the March Hare and a Dormouse. It turns out to be a never-ending tea party as the Mad Hatter has been punished by time standing still at 6pm, tea time.
The scene culminates with Alice walking out, claiming “This is the stupidest tea party that she had ever been to”.
I’m not a very likely Alice (in fact, believe it or not, my first dramatic role was way back in 1968 when I was cast as the Mad Hatter, a role that saw me wear a top hat saying 10/6 – representing 10 pounds and sixpence), but having recently departed the English shores I too feel that I have left the stupidest party (in multiple senses) behind.
The casting of the Mad Hatter in this case is irresistibly straightforward. Prime Minister Boris Johnson was almost born for the role and many of the original Mad Hatter’s quotes could have come straight from the Tory leader’s playbook. Particularly, I think, this (edited) excerpt.
The Hatter was the first to break the silence. “What day of the month is it?” he said, turning to Alice: he had taken his watch out of his pocket, and was looking at it uneasily, shaking it every now and then, and holding it to his ear.
Alice considered a little, and then said “The fourth”.
“Two days wrong!” sighed the Hatter. “I told you butter wouldn’t suit the works!” he added looking angrily at the March Hare.
“What a funny watch! It tells the day of the month, and doesn’t tell what o’clock it is!’
“Why should it?” muttered the Hatter. “Does your watch tell you what year it is?”
“Of course not,” Alice replied very readily: “but that’s because it stays the same year for such a long time together.”
“Which is just the case with mine,” said the Hatter.
Boris and his T(ory) party companions seem equally stuck in time. They certainly don’t appear to know what day of the week it is, and perhaps neither what month of the year given that Brexit is racing up towards the nation at the speed of Lewis Hamilton coming down the British Grand Prix finishing strait.
There have been numerous examples of the Mad Hatter’s… well, madness, but surely, surely, surely, the government’s announcement on Friday about the future structure of the tax and duty free business takes the biscuit to accompany the tea.
To recap, and let’s start with the good news, travellers departing the UK for EU countries will be able to purchase duty free liquor and tobacco from 1 January 2021. But, and it is a BUT written in giant JCDecaux-style billboard lettering, tax free sales will be simultaneously withdrawn for all outbound passengers from airports on goods other than liquor & tobacco.
Thirdly, the inbound allowance on liquor will be raised significantly (including 4 litres of spirits or 9 litres of still wine). And finally, VAT refunds for overseas shoppers in Britain’s shops will be removed (unless the goods are shipped to the customer’s home by the retailer).
When my colleague Dermot Davitt published this story late Friday afternoon London (and Galway) time, I was sound asleep in my Hong Kong bed. When I awoke, all hell had broken loose. Of 9,873 e-alerts sent out by Dermot, 8,133 had been opened. That just doesn’t happen.
My inbox was overflowing with an unholy barrage of emails asking for clarification on the story. “Are you sure this is right?” queried one reader, “it can’t be.” “I’m frankly struggling to fully comprehend the important decision related in your article below,” noted another. One used a well-known Anglo-Saxon adjectival expletive that, while singularly appropriate cannot be repeated here.
Having digested our article, I set about speaking to various well-informed sources in the lobbying and aviation communities. Yes, it was true (though the wording of the government text was vague); yes, they were shocked; no, there had been no consultation with industry before the bombshell was dropped. After I commented on the story on our LinkedIn page, more reaction began to pour in.
“Another example of this government not thinking things through and making policies on the hoof. Our only hope is they do their usual U-turn,” wrote experienced industry executive Gavin McKechnie.
“The UK government makes yet an attempt to isolate the British Isles from the rest of the world. This incomprehensibly unintelligent move will wipe out modern air traffic in the Kingdom,” wrote Johan Horstmann, CEO of 99ML by Horstmann.
“Short-sighted, incomprehensible and, let’s say, quite masochistic decision! I love this country, but sometimes I hardly understand it,” noted TW.O & Partners Senior Executive VP Marco Passoni.
“Anger is totally palpable Martin!!” responded Jilly Brocklebank of prominent UK aviation sector consultancy One Red Kite. “We have already been in touch with our local MPs – our local one and one where the business is based. One has already come back to me offering support to discuss with the Minister.”
Salient reaction too from Jason Cao, Founder & Publisher of DutyFreeExpert in China, who has commented often on the admirably pro-business, pro-consumer duty free policies of the Chinese government, particularly in Hainan. “Seems the logic of government decision making is totally different [in the UK]. Basically a government should create a healthy environment for people and business growth.”
Ah, yes Jason, but little is logical at a Mad Hatter’s Tea Party.
Now I know, that the UK airport tax free trade did not help itself with its ham-fisted handling of criticism that the tax-concession was not always being passed on to consumers a couple of years ago, but this still makes no sense.
Let’s put all this madness into context. If instigated the legislation will:
- Offer a big boost in the alcohol allowance for travellers entering the UK. But without duty free arrivals shops in Britain (though they are apparently under consideration), only foreign retailers (including those in the European Union that the Mad Hatter, the March Hare and all the assembled half-asleep dormice are so anxious to leave behind) will benefit from the hike in sales. EU 1- UK 0.
- End the tax-free benefit to UK-departing passengers on a wide range of goods. Yet inbound UK travellers will be able to buy such items tax free at overseas airports. EU 2 – UK 0
- Places the future of those categories in British airports in serious jeopardy. What exactly would the great beauty brands of the world be investing in? A high street offer transplanted into the airport with similar (or even greater due to operating costs) pricing? But overseas airports will benefit from their much more attractive shoppers offers. EU 3 – UK 0
- Encourage foreign shoppers to visit outlet malls and stores abroad where they can claim back the VAT or equivalent. You can imagine how management at, say, Harrods or Bicester Village feel right now. EU 4 – UK 0
And, of course, the current tax free contracts (Dufry’s P&C business at Heathrow, for example) now become a minefield that neither travel retailers nor Britain’s hard-pressed airports need to cross right now.
I can’t help but compare and contrast with the Chinese government’s offshore duty free shopping policy, already both consumer- and business-friendly, which was much enhanced in July to stimulate business and consumption. The allowance was more than tripled; the number of duty free categories boosted; the value allowance on a single purchase removed.
The result? An astonishing surge +250% surge in sales to RMB5 billion (US$723.8 million) in the period 1 July to 18 August; a sharp spike in visitor numbers; a big boost for China Duty Free Group and the local economy; and a whole lot of delighted consumers.
Consumer-friendly, business-friendly. They are words that can go together, and ones that the Mad Hatter, the March Hare and the Dormouse seem to have forgotten as they stumble from one abject crisis (mostly of their own making) to another. Thinking from outside the straight jacket? It appears that they are thinking from inside a giant collective one.