PM’s ‘own goal’ over VAT for tourists

UK is ‘least attractive shopping destination’ due to his decision

RISHI Sunak has been told that the UK is the “least attractive” place to shop in Europe, as he attempts to rebuild his party’s relationship with business.

The Prime Minister, inset, yesterday launched the Business Connect conference in London, aimed at encouraging companies to engage with the Government over growth.

He told around 200 high-profile chief executives at the conference that the Government has “got your back”.

However, Gerry Murphy, the chairman of Burberry, told Mr Sunak that he had caused a “spectacular own goal” by removing the VAT refund for tourists.

Mr Murphy said the Government was “obviously more businessfriendly than some predecessor administrations”, but he challenged the ex-Chancellor’s role in Britain’s exit from the EU, and any benefits that it had lost out from.

He told Mr Sunak: “It is somewhat perverse that on the day that we left the single market, a decision by you as Chancellor to remove the VAT refund for tourists made the UK the least attractive shopping destination in Europe.

“Leaving the EU has had a significant friction effect on trade, hopefully not forever … but it is the case it was a drag on growth.

“So we ask you to look at this specific one (VAT), this is a spectacular own goal, one that can be reversed by a decision from you or from the Chancellor.”

Mr Sunak insisted there “were good reasons for it” but said he would look at the data to “see if things are panning out as we expected to, or not”.

It comes as Labour has made inroads in its attempts to woo business leaders, as Rachel Reeves, the Shadow Chancellor, aims to repair Labour’s patchy reputation for management of the economy.

The Conservatives saw its support in the business community wane under previous leaders, during Brexit, the pandemic, and more recently the handling of the economy under Liz Truss. In 2018, Boris Johnson refused to deny claims he used an expletive when asked about businesses’ concerns around leaving the EU.

Chancellor Jeremy Hunt told reporters at the conference: “We had a very bumpy period politically last year. I think if you talk to the executives here today, a massive crosssection of the business community, what they say is that stability has come back. We see all sorts of signs of increasing optimism.”

The Government came under further scrutiny after more than 100 politicians from around the world called on the Conservatives to drop its strikes Bill.

It comes as a new report by the Resolution Foundation think tank said it was the time to make “workers’ rights a reality” by forcing companies to abide by labour market rules.

The report notes that there have been some improvements in workers’ rights over recent decades, including a fast-rising minimum wage, but too many firms are flouting them, causing “financial harm to often low-paid and vulnerable workers”.

It noted that 900,000 workers report they had no paid holiday, costing these workers £2 billion per year, and 1.8 million saying they do not receive a payslip, both rights by law.

The latest estimates suggest that almost one-third of workers paid at or around the minimum wage floor are underpaid, by an estimated £255 million per year.

Lindsay Judge, Research Director at the Resolution Foundation, said: “It is time to make workers’ rights a reality, with a Single Enforcement Body and new ‘super complaints’ that protect workers. We should double both the number of labour market inspectors and the fines that are awarded when they find workers have been mistreated.”