Tax-free Shopping

Baroness Kramer Excerpts

Thursday 15th December 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

Well, it has been considered—as I say, we had a round table in November—and the benefit is pretty marginal. As far as I can tell from walking around London, the visitors are still flooding into Britain. We also need to look to next year, when we have the Coronation, and remember that we must look after the visitors who come here. But, as I pointed out, the actual benefits are marginal.

[Baroness Kramer (LD)]

My Lords, will the Government consider doing a proper cost-benefit analysis of this, which they have never done? Small shops are very much reporting that the actual spend has dropped very significantly. At a time when retail is under so much pressure, that additional loss will drive people out of business.

[Viscount Younger of Leckie (Con)]

We do not have any plans to analyse this further. As I have said before, fewer than one in 10 non-EU visitors used the previous VAT-free shopping scheme, indicating that it is really not a pull factor for tourists. Canada and New Zealand also do not offer this type of tax-free shopping on the high street, and the USA does not have a countrywide system, yet all these countries are popular tourist destinations.