Sajid Javid’s decision means travellers to and from the EU would see prices tumble

This article is more than 1 year old

This article is more than 1 year old

The government will reintroduce duty-free purchases of cigarettes and alcohol with immediate effect if Britain leaves the EU without a deal on 31 October, the chancellor, Sajid Javid, has announced.

In the latest attempt to win public support for Boris Johnson’s Brexit stance, the Treasury said travellers to and from the EU would see prices tumble as excise duties were removed.

Under a no-deal Brexit, UK excise duty would no longer be due on alcohol and cigarettes bought when leaving Britain, the Treasury said, meaning a bottle of wine bought at Heathrow by a departing passenger would be up to £2.23 cheaper.

People returning from the EU would have the choice of continuing to purchase and bring home unlimited amounts of cigarettes and alcohol with duty paid – as is the case now – or to buy limited amounts at duty-free shops in EU countries instead. According to figures provided by the Treasury, someone buying two crates of beer would save £12.

Some estimates put the cost of the policy at £250m.

In what will be seen as a fresh sign that the government is gearing up to fight a general election over the coming months, Javid said: “As we prepare to leave the EU, I’m pleased to be able to back British travellers.

“We want people to enjoy their hard-earned holidays and this decision will help holidaymakers’ cash go that little bit further.”

The return of duty free will only apply if Britain leaves the EU without a deal because under the terms of the withdrawal agreement the UK would stay in the single market and the customs union for the duration of a transition period, and this means keeping the current system in place.

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At the end of that period, the UK would have to decide whether to remain aligned with EU rules on duty free but leaving without a deal gives the government the freedom to set its own rules.

Ministers, who think the announcement is certain to be popular with the public, are keen to counter some of the negative stories surrounding a no-deal Brexit with examples of how consumers will see some tangible and immediate benefits.

The travel industry has been calling on the government to reintroduce duty free, which stopped when the European single market was introduced.

Duty-free shopping is already permitted for travellers going to non-EU countries. The Treasury said a consultation would also be launched soon on its long-term duty-free policy.