Last week, in her speech at the Conservative Party Conference, Prime Minister Liz Truss said she had three priorities for Britain, "Growth, growth, and growth". Whilst we are all aware we are in the midst of a very challenging economic context, I know that Walpole’s luxury leaders will welcome that commitment to growth. The British luxury sector is an incredible growth driver for the UK economy – pre-pandemic it was growing at 9.8% per year, and has recovered strongly after Covid’s privations. Walpole Member businesses are strong where Britain needs it most: it’s a global calling card for Britain and a brilliant export champion, with 80% of what’s produced destined for overseas markets, not least in markets like the US, China and South-East Asia, and the Middle East. What’s more, Walpole Members create, develop and support long-term, highly skilled employment the length and breadth of the British Isles, not only in their own brands, but throughout their supply chain.
That was why Walpole was both delighted and encouraged by the Chancellor’s announcement of the re-introduction of the tax-free shopping scheme in a new, fully digitised, world-class iteration. It’s exactly this kind of legislative support that helps entrepreneurial, creative, innovative British businesses maximise their own ability to grow. Having campaigned for so long, it is so heartening to know that government has been listening to the needs of business and has understood that given the right tools – not least in the case of tax-free a level playing field with Europe – our sector can achieve the kind of growth the country needs.
I do think it’s worth stressing why tax-free shopping really matters. The reason it’s crucial to support the high-end tourism sector is that it generates jobs for large numbers of UK residents. The eco-system of high end accommodation, culture, entertainment and retail in the UK has exceptional appeal for international visitors (one pound spent in our beautiful hotels results in eight pounds spent in culture, entertainment or retail), but to maximise the value, every element of that interdependent eco-system needs to work. But even if we just look at high end retail, for whom the reintroduction has the most immediate and direct impact, you can see a powerful story of a nationwide network of support for jobs and skills.
Take the example of one of British luxury’s most storied offerings, a Savile Row suit: the ability to buy something so iconic tax free is a powerful draw for customers from the US – someone coming to commission a bespoke suit in, say, a beautiful piece of equally iconic fabric from Harris Tweed Hebrides, is not only supporting the tailor, the cutter, the apprentices and the retail staff at the Savile Row tailor, they are also directly supporting the independent weaver working in his or her home on the Isle of Harris, they are supporting all the workers in Harris Tweed Hebrides mill, a big and much loved employer on the island, and they are also supporting the north country or Scottish farmers who care for the Cheviot sheep whose fleeces go to the mill to be spun into yarn.
I could tell you a dozen similar stories: one purchase, stimulated and encouraged by the tax-free scheme, supporting many jobs.
Luxury is growing as a sector. But the right regulatory framework means it will grow faster and better (the high-end tourism eco-system in the UK alone could triple in value by 2030), supporting the livelihoods of people in manufacturing in every corner of the four nations of the UK, in hospitality, in retail, in our cultural institutions. This really matters, and at a time of such economic turbulence, it matters more than ever.
Chief Executive Officer, Walpole
Picture: Inside the Harris Tweed Hebrides mill.
