UK businesses urge Labour to scrap the tourist tax

Leading businesses are calling on Shadow Chancellor Rachel Reeves to axe the hated ‘tourist tax’ if Labour wins the election.

Bosses of firms including Mulberry, Marks & Spencer, Kurt Geiger and Selfridges have said reinstating tax-free shopping could turbo-charge the economy.

It comes days after Reeves said she wants to become the most ‘pro-growth Chancellor’ in UK history. Rishi Sunak abolished tax-free shopping for international visitors in 2021. 

The Mail and Mail on Sunday have been campaigning for the policy to be reversed.

The Conservatives have refused to heed the calls from business to ditch the tax, which is a brake on growth. 

The levy is costing the economy more than £11billion a year, according to the Centre for Economics and Business Research, as tourists who come on shopping trips also splash out on hotels, restaurants and theatre trips.

The Tories asked the Office for Budget Responsibility to assess the tax ahead of the March Budget, but ultimately kept it. 

The Mail on Sunday understands that Labour does not support ditching the levy.

Firms want the party at a minimum to pledge to launch a formal assessment.

Hotelier Sir Rocco Forte, who spearheaded a protest backed by more than 500 bosses, said keeping it would make ‘a complete mockery’ of Labour’s growth promises.

He added: ‘If the Conservatives won’t do it, an incoming Labour government should if it really wants to fire up the economy.’

Paul Barnes from the Association of International Retail – which represents firms including Bicester Village and Harrods – implored Reeves to agree to review the Government’s forecasts. 

He said: ‘She will be pleasantly surprised by the billions of pounds of additional spending and tax revenues the real data shows will be generated.’

Kurt Geiger’s boss Neil Clifford said the policy had ‘put a big hole in the British economy’ by hurting the entire country, not just shops in the West End.

Clifford added: ‘Brexit was to open us up to the world and then we shut the door on ourselves.’

Marks & Spencer’s boss Stuart Machin said: ‘Cities like Paris and Milan are taking full advantage of the decision to add VAT to tourists visiting our cities and it is felt way beyond retail – harming our economy at a time when London’s major shopping streets need to encourage shoppers back.’