Lord Tunnicliffe
Main Page: Lord Tunnicliffe (Labour - Life peer)
Baroness Penn (Con)
My Lords, as I have just noted, it is in fact culture that drives visitors to the UK rather than VAT-free shopping. The route of VAT-free shopping is still available through Shop & Ship. To support the wonderful cultural sector in the UK, we of course have the £1.57 billion cultural recovery fund.
Lord Tunnicliffe (Lab) [V]
My Lords, when the UK withdraws the VAT retail export scheme, we will become the only country in Europe not to offer tax-free shopping to international visitors. The Government will have had representations on the effect that this might have, putting retailers and tourism providers at a competitive disadvantage when tourism hubs are already struggling due to Covid-19. Can the Minister outline what engagement was undertaken with businesses and their representative bodies and why the scheme is ending in January 2021 rather than later?
Baroness Penn (Con)
My Lords, January 2021 represents the end of the transition period, and the Government have to make a decision on whether to extend the scheme to all visitors, including EU visitors, who do not currently benefit from it, or to withdraw it. Our view was that extending the scheme could cost up to £0.9 billion, and we had to assess the value for money of that against other priorities that the Government have.