I know you’ll share my profound disappointment that the government has decided not to proceed with its policy to return tax-free shopping: a policy that, in our view, would have quickly delivered growth and given our sector a crucial tool to accelerate post-pandemic recovery.
Its impact would have been felt in every part of the UK. It would also have been a significant boost to UK manufacturing, which depends on strong sales in our cities, and helped support the wider luxury visitor ecosystem of Britain’s exceptional cultural institutions and hospitality venues. It’s a scheme that, as we are only too aware, supports jobs and investment the length and breadth of the country. What’s more, it is a policy that genuinely encourages growth whilst at the same time being a net contributor to the exchequer.
We have talked before about how the scheme could deliver direct retail sales of at least £1.2bn as well as that wider associated spend across tourism and hospitality. You’ll remember from Walpole’s recent Bain study into high-end tourism that, until 2019, the UK had a unique advantage, and high-end international visitors to the UK spent 14x mainstream tourists, an injection of around £2000 per person per day into our economy.
And you’ll also be aware, not only from our research but from your own experience, that having become the only country in Europe without tax-free shopping was a significant impediment to post-pandemic recovery, risking our competitiveness, and risking stultifying a £30bn industry.
Whilst we understand the context in which this decision was taken, it doesn’t lessen the disappointment. As you would expect from Walpole, we will not let this setback push us off-course. We will continue to work tirelessly on your behalf with our political engagement on the importance of the VAT Res scheme.
As an immediate priority, we are asking the Government to do a full economic review, to understand the value that such a scheme might bring. Above all, we will seek to work closely with the new Chancellor to reach an outcome which supports the sector and the countless jobs and industries it supports. If you would like to help us in lobbying the Government, please do email us as it is vital that MPs understand how important this scheme is to your businesses.
Chief Executive Officer, Walpole
