Labour has avoided an attack on the Tories’ new policy to restore tax-free shopping for foreigners. Was the government considering it itself…
Sunak as Chancellor scrapped the VAT Retail Export Scheme for non-EU visitors in 2021. It is now Tory policy to bring back the relief for non-EU visitors and extend that to EU visitors if the results are good. Labour has only attacked the Tories’ U-turn and criticised the party for failing to say in enough detail how it would be paid for. But no criticism of the policy itself…
The issue divides Labour figures. Recently ennobled Sadiq Khan called for the relief to be reintroduced this month, saying:
“London is a globally renowned tourist destination, but the decision to remove tax-free shopping by the previous Government was a huge mistake which has led to us trailing behind other European cities on visitor spending for too long.”
Last year Culture Secretary Lisa Nandy said she had heard “very loud and clear” calls from figures in the fashion industry to reinstate the relief and that the government would be “happy to look at the evidence.” Asked in parliament, Treasury ministers said the government “carefully considered external analysis estimating that a new tax-free shopping scheme would generate more revenue than cost for the Exchequer, as well as supporting data from a wide range of business stakeholders across the UK. However, these do not provide sufficient evidence that a new tax-free shopping scheme would have greater benefits to the UK than costs.” Something that could change with the analysis…
Businesses have welcomed the Tory policy. Did Badenoch spike one of the easy tax cuts Burnham put in his back pocket to justify further hikes?
Andy Haldane, Burnham’s recent adviser on the economy who has not taken up a No10 job, told Andrew Marr on LBC:
“The market now suspects that this is a traditional tax-and-spend socialist government with better TikTok videos…
imposing windfall taxes on oil & gas or on banks or upping capital gains tax would […] repeat the mistake that Rachel made […] The Achilles heel, the fiscal Achilles heel of this government thus far has been its unwillingness and/or inability to cut public spending.”