Baroness Doocey
Main Page: Baroness Doocey (Liberal Democrat - Life peer)
Baroness Penn (Con)
Well, my Lords, I am sure that we will keep the impact of this decision under review. With regard to Shop & Ship, it is a much more effective way to deliver on the international norm when the consumption tax is paid in the country in which the good is consumed. The VAT RES is open to much more potential for fraudulent use compared to Shop & Ship.
Baroness Doocey (LD)
My Lords, this issue was last considered in 2013, when tourism was benefiting from the prestige of the 2012 Olympics. Even at that boom time, HMRC strongly backed tax-free shopping, because it encouraged large numbers of high-spending international visitors to come to the UK. We need tourists now more than we have ever needed them before, and I have not met one person within the tourism industry who agrees with this; they totally disagree with what the Government are saying. So why are the Government insisting on doing this against the advice of the industry? Because the industry believes—and it does know what it is talking about—that this will lead to very significant job cuts.
Baroness Penn (Con)
My Lords, the change in the position since 2013 is that the Government can no longer apply the scheme only to non-EU visitors. The end of the transition period and WTO rules mean that we are faced with the decision to extend it to all visitors or get rid of the scheme altogether. Given the costs associated with the scheme and our understanding of the primary drivers of people’s reasons for visiting the UK, we have taken the decision that we have.