Trade minister backs ditching tourist levy

TRADE minister Greg Hands has backed scrapping the controversial ‘tourist tax’ in today’s Budget to give the economy a boost.

The former Conservative Party chairman said it would bring ‘benefits’ to the capital to reintroduce VATfree shopping to foreign visitors.

He added his voice to those of hundreds of businesses who say the policy is harming the economy and benefiting cities like Paris where tourists do not have to pay the charge.

Speaking yesterday to LBC’s Nick Ferrari, Mr Hands said: ‘I think it would bring benefits to London to reintroduce VAT-free shopping for visitors.

‘I think it will give a real boost to the West End, to Chelsea – like Kings Road in my constituency.’

Rishi Sunak scrapped tax-free shopping for overseas tourists in 2021 when he was Chancellor – with the Treasury claiming it was a ‘costly relief which does not benefit the whole of GB equally’.

Since then, there have been calls for the rebate to be reintroduced and the Mail’s Scrap The Tourist Tax campaign was launched in support. Last month, Chancellor Jeremy Hunt ordered the Government’s economic watchdog to investigate whether the policy costs more than it raises.

The Office for Budget Responsibility will investigate the ‘costs and benefits’ of Mr Sunak’s 2020 decision to scrap tax-free shopping for tourists.

The Treasury has insisted that reinstating the tax break would cost the Exchequer around £2billion a year.

But critics argue the entire economy would benefit from VAT-free shopping as it would encourage tourists to splash out on restaurants, hotels, transport and spending sprees.

Analysis by the Centre for Economics and Business Research has suggested the tourist tax costs the wider economy more than £11billion.