Tax-free Shopping

Lord Watts Excerpts

Thursday 15th December 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

I do not agree with the noble Earl. Introducing VAT-free shopping would come at a significant fiscal cost because it would subsidise a large amount of tourist spending that already occurs without any relief in place. This is supported by OBR estimates which found that the withdrawal of the previous schemes would reduce visitor numbers by only 0.07%.

[Lord Watts (Lab)]

My Lords, do the Government understand that it may not affect the number of tourists who come to the UK, but they will stop spending in the shops and that will be lost revenue? Will the Minister not reconsider this matter?

[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.