- Number of people visiting the UK was still 1% below 2019 levels last year
Labour’s refusal to scrap the hated tourist tax has been blamed as visits to the UK languish below pre-pandemic levels.
More than 500 business leaders have backed a Mail campaign to bring back the VAT refund scheme for foreign visitors, arguing it would encourage tourists to come to the UK.
The number of people visiting the UK was still 1 per cent below 2019 levels last year, lagging behind other European countries with 42.6 million visitors.
And these visitors splashed £32.5billion, which was 8 per cent lower than pre-pandemic, the Office for National Statistics revealed.
The alarming figures will stoke fears in the business world that the Government is missing a chance to boost economic growth by ignoring calls to reinstate the shopping scheme.
Instead of spending money in Britain, tourists are flocking to Paris and Milan, leaving these economies to reap the rewards at the UK’s expense.
Burberry has had to shrink its shop in Heathrow Terminal 2 due to slower sales while rival Mulberry shut its shops
Derrick Hardman, chair of the Association of International Retail (AIR), said: ‘Once again, this is more evidence that Britain is falling behind, at a time when we should be leading global tourism recovery.
‘This data shows the urgent need for the Chancellor to launch a review into the fiscal benefits of tax-free shopping and help to restore the UK’s competitiveness’.
His remarks follow those of Heathrow’s retail boss Fraser Brown, who said since the scheme was ditched in 2021 there has been a ‘material, significant’ fall in sales at the airport.
British fashion label Burberry has had to shrink its shop in Terminal 2 due to slower sales while rival Mulberry shut its shops, Brown told The Times.
By contrast, comparable figures show that in Italy, there was a 13 per cent rise in spending from tourists while visitor numbers shot up 3 per cent last year.
Spain also saw spending increase by 13 per cent while it was up 5 per cent in France.
Chancellor Rachel Reeves has been urged to prioritise boosting economic growth at this autumn’s Budget amid fears last year’s tax raid is stifling jobs and investment.
But the Treasury is not planning to address the campaign at the upcoming Budget, The Mail on Sunday reported earlier this month.
Campaign supporters include luxury brands Burberry, Mulberry and Harrods, as well as Primark and Marks & Spencer.
Axing the tourist tax would mean the UK becomes the only European destination to offer rebates to 450 million EU customers, as well as tourists from elsewhere.
Before the initiative was axed in 2021 under the Conservatives, tourists from outside the EU could receive a 20 per cent refund on purchases in the UK.
Now the UK has left the EU and its customs union, EU residents would be able to shop tax-free alongside high-spenders from China and the US if the VAT exemption was restored.
There are fears of another tax raid this autumn as the Chancellor struggles to make her Budget numbers add up.
The bosses of firms such as Tesco, Sainsbury’s, John Lewis, Boots and Currys wrote to Reeves last week to warn her against further tax hikes on business.
The industry estimates that measures in the Budget, including the rise in national insurance, have cost it £7billion.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .