Tax-Free Shopping: Economic Impact

Debate between Lord Harlech and Lord Pitt-Watson

Monday 26th October 2026 Lords Chamber

[Lord Pitt-Watson (Lab)]

I can come back on that. I think we all understand that visitors can still reclaim VAT on purchases; they just need to have them shipped directly. If they are shipped directly, they are then caught by customs in the country to which they are shipped. The statistics are the 2019 to 2024 statistics. UK tourism receipts recovered to 111% of their 2019 levels after adjusting for inflation. In France, they recovered to 107%, in Italy to 103% and in Germany to 83%. We were beaten only by Spain with 117%. The notion that loads of people who were coming here who are now not coming here is difficult to stand up on the evidence.

[Lord Harlech (Con)]

My Lords, I declare an interest in that my wife works for a British fashion house.

Lost sales equals lost jobs. One of the areas hit hardest in the rising NEETs situation is retail and hospitality. What are the Government doing to improve sales in these areas and get young people back into retail jobs?

[Lord Pitt-Watson (Lab)]

There are a number of things for the broader retail industry. In particular, I note the new deal on business rates support, with retail and hospitality saving nearly £1 billion a year, covering 750,000 properties. The Government continue to review the wider business rates system. However, if there is to be any change to that, we need to wait for the Budget.