Tax-free Shopping

Debate between Viscount Younger of Leckie and Earl of Clancarty

Thursday 15th December 2022 Lords Chamber

[Viscount Younger of Leckie (Con)]

Well, what I can say is that, on 28 November, HMRC and HMT officials held a round table with industry stakeholders to collate feedback on the Chancellor’s decision to withdraw the introduction. As I indicated in my initial Answer, evidence from VisitBritain continues to show that the key motivators for tourists visiting the UK are our rich history and heritage and vibrant towns and cities, and less so shopping.

[The Earl of Clancarty (CB)]

My Lords, international tourists used to make up half of Mulberry’s trade in London; now it is almost none. Does not that immediately tell the Government something about the significant effect this is now having on the tourist trade? European cities will be the winners and we will be the losers unless the Government change their mind.

[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%.