By Marco Passoni
Staggering. Disappointing. Diabolical. There are many words which were used last week to describe the decision of the UK government no to scrap its Tourist Tax in the Spring Budget. In fact, some of the words and descriptions I heard from colleagues do not bear publication here.
In the months leading up to last week’s announcement, it seemed that all the evidence was pointing to only one outcome. Figures from the Centre for Economics and Business Research (CEBR) and the Association of International Retail (AIR), alongside data from tourism companies, showed that the decision to scrap VAT-free shopping for international travellers to the UK in 2021 was costing millions in visitor numbers and billions of pounds to the economy. None of this came as a surprise to most of us in the industry – we warned that it would happen. Heathrow Airport has shown that retail recovery is not as rapid as expected, and long-haul traveller numbers returning to cities such as Paris and Milan outstrip that seen in London.
So to say Jeremy Hunt’s decision to ignore the Tourist Tax in his budget was surprising would be an understatement. It was a horrific error. But among all the words being thrown around about this decision, the one I did not expect to see was: appropriate.
To say Jeremy Hunt’s decision to ignore the Tourist Tax in his budget was surprising would be an understatement. It was a horrific error.
It appears that the UK’s leaders did not just ignore the Tourist Tax, they have decided that this costly and ruinous policy is a good idea. The Office of Budget Responsbility was asked to look into the Tourist Tax in early February, and it has ruled that the figures it used to recommend the policy in 2020 “still seem appropriate”.
I, for one, cannot possibly imagine what figures they are looking which make a decision which is costing the country more than £11 billion seem like a good idea.
Even more amazing, it seems that other governments in the UK recognise what those in Westminster seem to be failing to understand. The Scottish government has backed the return of tax-free shopping, with Finance Secretary Shona Robison telling the parliament she and her party would support the move. Unfortunately, the final decision still rests with those in charge in London, who it seems to me have shown they are either ill-informed, not bothered, or actively trying to damage the country, its finances and its international standing.
It appears that the UK’s leaders did not just ignore the Tourist Tax, they have decided that this costly and ruinous policy is a good idea
So, what do we do now? All we can do is what one must always do when faced with a fool – try to show them the error of their ways. If the government are incapable of working it out for themselves, we must keep presenting them with irrefutable evidence and telling them to look again. The campaign which launched at Heathrow Airport a few weeks ago, the demonstration by business leaders in London and the open letters have all been a good start, but the work must continue in the hope that we can get this decision reversed before it does irreparable damage.
Being right is not always easy, but it is the duty of the sighted to lead the blind and that is what we must do here.
It is the duty of the sighted to lead the blind and that is what we must do here
