By Marco Passoni
Dear Prime Minister,
Congratulations on your new government. Now I have a request to make, on behalf of the country, the economy and both the tourism and retail markets: it is time to reverse the decision to scrap tax-free shopping.
A new Government is a fresh start. A time to take a new look and a new approach, and maybe to right some of the wrong decisions made in the past. And make no mistake, the decision to cut tax-free shopping following Brexit was a wrong decision.
The numbers on this matter speak for themselves. Figures from the Centre for Economics and Business Research showed that the loss of tax-free shopping is costing the economy £10.7bn every year and turning 2 million tourists away from our shores. Shoppers from key, high-spending destinations from America to the UAE are already choosing to visit and shop with our European neighbours to get more favourable retail opportunities. France and Italy, for example, have so far gained two-thirds of the tourists now shunning UK shores, and the Association of International Retail believes the UK stands to lose £1.5bn per year to its neighbours who do offer tax-free shopping.
To make a decision which cuts off these shoppers is madness. To keep it in place is being actively damaging. Data from Global Blue shows that these tourists are also spending more than ever before; with average spend up about 31% last year compared to 2019. This is too big an opportunity to be missing, especially at a time when the UK needs its income and global standing more than ever.
The luxury sector, which contributes £81bn to the economy and £25.5bn in tax, according to Walpole, has been hit too. Selfridges, that hallmark of London luxury, has cut jobs due to the loss of trade brought about by the decision and Watches of Switzerland has seen share prices drop as aspirational luxury shoppers avoid spending their money here.
This is, pure and simple, a decision which is damaging business and finances, as well as the UK’s standing as a tourist destination and a home of common sense and good practice.
But none of this should come as a surprise. Business leaders, retail leaders and entire industries warned of the incredible damage this policy could bring about. And we have been proven right.
Now Prime Minister, as you set up your new government and look to build the country up for success, I know I join many others in urging you to end this foolish policy and let businesses which have been a driving force for this country for many years become so once more. We can build better together.
Kind regards,
Marco Passoni
