Scottish Daily Mail

Tourists ‘will desert Bri­tain if duty-free gets the chop’

- By Tom Payne Trans­port Cor­re­spon­dent t.payne@dai­ly­mail.co.uk

TOURISTS will aban­don Bri­tain if the Chan­cel­lor scraps duty-free shopping, the Gov­ern­ment’s eco­nomic watch­dog has warned.

The Of­fice for Bud­get Re­spon­si­bil­ity (OBR) also says the de­ci­sion will raise only £195 mil­lion in the first year – £300 mil­lion less than orig­i­nal es­ti­mates.

It warns that the plans are based on a ‘highly un­cer­tain es­ti­mate’ of how vis­i­tors will re­act to the changes, and pre­dicts it will make the UK ‘less at­trac­tive for af­fected tourists rel­a­tive to al­ter­na­tive EU des­ti­na­tions such as Paris or Mi­lan’.

The Trea­sury has said that as of Jan­uary 1, tax sav­ings on goods bought by out­bound trav­ellers will ap­ply only to al­co­hol and tobacco.

As part of the move, min­is­ters are also abol­ish­ing the VAT re­bate scheme for tourists, which will hit shopping cen­tres across the coun­try and put up to 70,000 jobs at risk.

The plans have at­tracted i nter­na­tional ridicule, with French news­pa­per Les Echos ac­cus­ing the Trea­sury of ‘shoot­ing it­self in the foot in terms of com­pet­i­tive­ness’.

It emerged yes­ter­day that the French Na­tional As­sem­bly had ap­pointed two of­fi­cials to take ad­van­tage of the UK’s changes. Their first move was to lower the amount vis­i­tors must spend to re­claim French VAT from €175 (£157) to €100 (£89).

More than 40 Tory MPs have pres­sured Rishi Su­nak to re­think the de­ci­sion and Heathrow Air­port has launched a ju­di­cial re­view – the first time it has em­barked on a le­gal chal­lenge against the Gov­ern­ment.

The Trea­sury i nsists the scheme mostly ben­e­fits Lon­don and does not sup­port the Gov­ern­ment’s l ev­el­ling- up agenda. It has dis­missed claims the changes will hurt the UK’s com­pet­i­tive­ness.

But the OBR re­port high­lights the po­ten­tial for ‘neg­a­tive con­se­quences’ as mil­lions of vis­i­tors aban­don the UK.

A spokesman for Heathrow said: ‘Fail­ure to in­tro­duce a new tax-free shopping regime will jeop­ar­dise the Gov­ern­ment’s “global Bri­tain” am­bi­tions just as other Euro­pean coun­tries such as France and Ire­land take the op­po­site ap­proach to be­come more at­trac­tive to in­ter­na­tional vis­i­tors, in a postBrexit world.

‘Brexit is meant to be about mak­ing the UK more com­pet­i­tive, and all eyes are on this Gov­ern­ment to make a suc­cess of it. It will be an ex­tremely wor­ry­ing start if the Chan­cel­lor fails to recog­nise new fig­ures and ap­proaches oth­ers are choos­ing to en­sure they re­main at­trac­tive. He must do all he can to steal a march on our Euro­pean neighbours, not fall be­hind them.’

A spokesman f or the UK

Travel Re­tail Fo­rum added: ‘ The OBR’s anal­y­sis of the Trea­sury’s de­ci­sion to re­move air­side tax-free sales shows the Trea­sury can ex­pect to re­cover only a very mi­nor amount of rev­enue – and al­most cer­tainly less than the com­bined eco­nomic im­pact travel re­tail could have had on the econ­omy if tax-free sales had been ex­tended to trav­ellers af­ter Brexit.’

The group has sub­mit­ted sev­eral pro­pos­als to the Trea­sury that it be­lieves ‘ad­dress the con­cerns raised by the Gov­ern­ment, while giv­ing air­ports and travel re­tail­ers the op­por­tu­nity to re­cover from the pandemic and con­tinue de­liv­er­ing this travel ben­e­fit to pas­sen­gers’.

Rishi told: It’s your duty to save tax-free shopping

The Mail, Novem­ber 16

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