Tourist Spending: VAT

Baroness Foster of Oxton Excerpts

Wednesday 24th May 2023 Lords Chamber

[Baroness Penn (Con)]

I do absolutely appreciate the point that the noble Baroness is making. As part of the research that we did in considering this question, HMRC surveyed VAT RES users and the scheme did not make the top 10 in their list of reasons for visiting Britain—and that was for the 8% of visitors who qualified for the scheme who actually used it. We also asked them whether they would continue to purchase in the way they had previously. Two-thirds of those surveyed said that they would have purchased the same items regardless of the scheme, and 95% of people said that they would still shop. I appreciate that there is a wider impact, but we considered that when taking this decision.

[Baroness Foster of Oxton (Con)]

My Lords, tourism in England generates £106 billion to the Treasury and underpins 2.4 million jobs. I could never understand why we stopped encouraging people and businesses with the VAT situation and when they were in-bound at airports. I ask my noble friend seriously to reconsider this. Why we would wish to encourage tourists to shop and holiday in different countries around Europe and around the world when we have the greatest capital city on the planet is beyond me.

[Baroness Penn (Con)]

My Lords, the Government are a strong supporter of the UK’s tourism industry and absolutely recognise the contribution that it makes to our economy. As I said earlier, we previously surveyed users of VAT-free shopping. Fewer than 8% of non-EU visitors used it and, for those who did, it was not in their top 10 reasons for visiting the UK. There are many great reasons to visit our country and we will continue to promote and advocate them to people across the country and across the world.