Minister breaks cover and calls for tourist tax to be scrapped
...as Burberry chief joins chorus of protest
THE first government minister yesterday broke cover and backed calls to scrap the tourist tax holding back Britain’s economy.
Paul Scully, the technology minister, admitted his ‘struggle’ to agree with the Government’s stance against the campaign to bring back VAT-free shopping.
The London mayoral hopeful said ‘hundreds of millions of pounds’ was being lost because shoppers were choosing to go to European cities rather than London – hitting all aspects of the economy.
Mr Scully appealed to the Treasury to undertake ‘dynamic modelling’ to calculate the benefits of bringing back tax-free shopping for tourists.
He told LBC Radio that he had been ‘campaigning within government’ on the issue, though as a minister was expected to abide by collective responsibility. He added: ‘But there are a few little areas where I struggle to hold the line, shall we say, and this is one.’
Mr Scully said while some people viewed the campaign as ‘ big shops getting a tax rebate’, he believed it would bring in ‘ hundreds of millions pounds of lost revenue to this country’.
He added: ‘You see people going to Milan, going to Paris, rather than coming to London and then that money working its way through the system for, as you rightly say, taxi drivers and people that are working in our restaurants. So there can be so much more. What I’ve asked the Treasury to do is, instead of seeing it as a cost of lost revenue, the static modelling, they just see it [as] £2billion they’re going to lose, do some dynamic modelling, see what the behaviours change as a result of restoring VAT-free shopping.
What they’ll find is they get more money in revenue and tax.’
While Mr Scully is the first minister to publicly back the campaign, others are known to have privately taken up the case.
Business Secretary Kemi Badenoch is understood to have heard complaints from businesses and has been raising their concerns with colleagues. Conservative Party chairman Greg Hands – whose Chelsea and Fulham constituency is heavily affected by the tax – is also thought to strongly back the campaign. Earlier this week, trade minister Nigel Huddleston urged hospitality and retail bosses to share new data on the impact of the tax.
Downing Street said taxation was ‘a matter for the Chancellor’.
Mr Scully’s comments came as the boss of Burberry said the fashion label would keep pushing for the tourist tax to be overturned as the UK was ‘at a competitive disadvantage for global shoppers’.
More than 200 business leaders back the Mail’s bid to Scrap the Tourist Tax, with heavyweights including Harrods and British Airways urging the Government to restore VAT-free shopping.
Rishi Sunak is facing growing pressure to scrap the tax, especially ahead of a rebound in international travel from China this summer. Burberry chief executive Jonathan Akeroyd said he was ‘really hoping’ a tax incentive could be revisited. He added: ‘ We are disappointed the Government chose to scrap the VAT retail export scheme. We think it leaves the UK at a competitive disadvantage for global shoppers.’
The firm’s trading suggested the UK was ‘underperforming versus the rest of continental Europe’, with a ‘ much stronger performance’ of tourist sales in countries such as Spain, Italy and France.
‘It is something we are going to keep campaigning for’, he said.
The chief executive said he was also concerned by a ‘big surge’ in British tourists heading to mainland Europe to buy designer clothes and accessories.
SEMICONDUCTORS are the building blocks of modern life, from national defences to transport and mobile phones.
If China carries out its threat to invade Taiwan, the global hub for producing this technology, the impact would be devastating. So Mr Sunak is wise to take steps to protect supplies of microchips, including investing £1billion to bolster the UK’s superconductor industry.
At last, ministers are learning the lessons from the shortages of protective kit during Covid and batteries for electric cars today. Unless we produce our own cutting-edge equipment, Britain’s prosperity, safety and security will always be at risk.
▪ TORY minister Paul Scully has risked the Whips’ Office’s wrath by backing our campaign to scrap the ‘tourist tax’ on foreign shoppers. Why? Cynics say the London mayoral hopeful wants to be seen fighting a policy that is costing countless millions. But maybe he realises, unlike the Chancellor, that pushing big- spending visitors abroad is economic lunacy.