I'll ditch tourist tax to boost Britain: Kemi vows to bring back VAT-free shopping for UK visitors and get country's ailing economy firing again
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By SAM MERRIMAN, POLITICAL CORRESPONDENT
Published: | Updated:
Kemi Badenoch last night vowed to ditch the hated tourist tax to get Britain's ailing economy firing again.
The Tory leader pledged to bring back tax-free shopping to attract millions of overseas tourists and deliver a £4billion boost to the high street.
In a significant victory for the Daily Mail's 'Scrap the Tourist Tax' campaign, Mrs Badenoch said her government would restore the VAT-free shopping initiative for visitors that was axed in 2021.
The pledge draws a clear dividing line between Labour and the Tories after the Government raised the tax burden to a post-war record – and still looks set to come back for more.
While Mrs Badenoch has vowed to scrap stamp duty, reverse the Family Farm Tax, and is exploring ways to abolish inheritance tax, Labour has introduced a new levy on overnight stays and ministers appear to be laying the groundwork for more tax rises at next month's Budget.
The Conservative leader last night accused Andy Burnham of accepting Britain's continuing decline under Labour. 'I am tired of the doom and gloom that says Britain has to accept decline, tax people more and expect less,' Mrs Badenoch told the Daily Mail.
'We should be ambitious about what this country can do. We have iconic retailers, inventive designers, brilliant manufacturers and some of the best places in the world to eat, sleep and visit.
'Five years of sending shoppers to Paris or Milan is more than enough and I thank the Daily Mail for its important campaign to scrap the hated tourist tax.
Tory leader Kemi Badenoch said her government would restore the VAT-free shopping initiative for visitors that was axed in 2021
Prime Minister Andy Burnham meanwhile was accused by Mrs Badenoch of accepting Britain's continuing decline under Labour
'This policy has been terrible for tourism and terrible for the High Street. Britain should be a magnet for tourists who want to spend, not a country that tells them to take their money elsewhere.'
More than 500 UK business leaders have backed the Mail's campaign to bring back the 20 per cent refund scheme to encourage tourism, as is common in most other European destinations and a number of US states.
Big names including Giorgio Armani, Pernod Ricard and the owner of the Westfield shopping centres argue that the cost of such refunds is outweighed by the enormous benefits of encouraging more visitors to Britain.
Under Mrs Badenoch's plan, a Tory government would restore VAT refunds for eligible visitors from outside the EU. This existed before 2021 but was scrapped under the previous Conservative government.
The party said that, if the evidence confirms the scheme pays its way, it would then extend this to visitors from the EU by the end of the next Parliament, potentially opening up a market of hundreds of millions of shoppers.
The Tories pointed to research from the Centre for Economics and Business Research (CEBR), which found that restoring tax-free shopping could attract up to 2.35million additional visitors and generate £4.1billion in extra spending.
The move would benefit shops, hotels, restaurants, transport and the wider tourism industry and stop billions of pounds of spending flowing to rival European destinations, the Tories said.
The announcement contrasts with Labour's decision this month to introduce a 'holiday tax' across mayoral authorities they control, adding to the price of the family holiday and driving people to take vacations overseas instead of in the UK.
Business chiefs including the bosses of Fortnum & Mason, Paul Smith and the parent company of Claridge's hotel hailed Mrs Badenoch's plans as 'pro-growth' and 'pro-jobs'.
Sir Rocco Forte, chairman of Rocco Forte Hotels, said: 'This is a policy that has been crying out to be reversed. Britain is the only major shopping destination in Europe that denies international visitors a tax refund.'
Helen Dickinson, chief executive at the British Retail Consortium, said of a tax-free shopping scheme: 'Done properly, it would boost economic growth and deliver a net benefit to the Exchequer.'
Even Labour Mayor of London Lord Khan has called on the Government to restore tax-free shopping, saying the decision to scrap it was 'a huge mistake'.
A Labour spokesman said: 'The Tories have pulled off a spectacular U-turn. If they think it's such a great idea, they should explain why they scrapped it and how they'd pay for bringing it back.'
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