Britain’s tourist tax is putting Gatwick at a “competitive disadvantage” to rival European hubs, the airport’s chief executive has warned.
Stewart Wingate told the Telegraph the tourism tax was holding back Gatwick’s push for growth as it vies to compete against European competitors such as Madrid, Milan and Paris.
“Our position is that we, alongside London and the South East, are at a competitive disadvantage because when the passengers think where should I go and which city should I choose, part of the decision-making is whether they can shop tax-free,” he said.
“Some of these passengers want to buy significant amounts of goods. But if you want to come to the heart of London and shop for luxury goods, then perhaps you are going to think twice.”
Wingate joins a string of business leaders in hitting out against the government’s decision to axe VAT-free shopping in 2020.
Heathrow’s new chief executive Thomas Woldbye told City A.M. in a February interview the move was a “missed opportunity.” Recent analysis from the Centre for Economics and Business Research revealed nearly £11.1bn had been wiped off UK GDP as a result.
Bringing the tax break back was debated in parliament late last year and Jeremy Hunt pledged in the Autumn Statement to review the numbers. However, the Spring Budget made no mention of any planned changes.
Wingate said: “We will continue to say, whoever the Government is, that we feel that we are at a disadvantage to other capital cities.”
The warnings come as Gatwick reaches a critical stage in its £2.2bn bid to expand. The West-Sussex hub is looking to significantly increase capacity by bringing its emergency runway into routine use.
It estimates expansion will create 14,000 new jobs and pump £1bn into the economy, while boosting its ability to tackle the long-haul market.
“At the moment, Heathrow is full,” Wingate said. “And Gatwick is currently operating close to capacity in the peak summer months.
“For the country, this is certainly the quickest way by quite some margin to create a significant number of additional peak hourly slots.”
In its full-year results, Gatwick said passenger traffic had reached 94 per cent of pre-pandemic levels, with some 40.9m passing through last year.
Earnings before interest, taxes, depreciation, and amortisation (EBITDA) came in at £617.7m, up 38.4 per cent.
The Treasury was approached for comment.