More Tories revolt over VAT-free shopping

Drop-off in high-spending tourists is wreaking havoc’: Rishi Sunak and Jeremy Hunt face a growing rebellion over the scrapping of VAT-free shopping for foreign tourists

Rishi Sunak and Jeremy Hunt were last night facing a growing backbench rebellion over the scrapping of VAT-free shopping for foreign tourists amid fears the UK is losing out to European rivals.

Sir Iain Duncan Smith became the latest heavyweight to call for the Government to reinstate the policy. The former Conservative leader said: ‘What we get for what we give will be far greater and it would help the economy.’

And Tory MP Julian Knight warned Paris had ‘stolen a march’ on London, with a drop-off in high-spending tourists wreaking havoc on restaurants, bars, theatres and hotels.

VAT-free shopping allows tourists to claim back 20 per cent on purchases. It was axed by then-chancellor Mr Sunak when the UK left the EU. Kwasi Kwarteng tried to reintroduce it, but new Chancellor Mr Hunt reversed the plan claiming it would save £2billion a year.

Rishi Sunak (pictured) and Jeremy Hunt were last night facing a growing backbench rebellion over the scrapping of VAT-free shopping for foreign tourists amid fears the UK is losing out to European rivals

Tory MP Henry Smith said the Government’s calculations show a ‘false saving’. Mr Knight agreed, adding: ‘What the Government has done makes Britain a much less attractive place for overseas visitors. The Government loses revenue due to those visitors not coming. It’s no coincidence that the day Britain abolished tax-free shopping, France moved to relax their regime.

‘As a result, Paris has stolen a march on London. And when the Chinese start visiting again, they won’t go to destinations that don’t have tax-free shopping.

‘I call on the Government to ignore the Treasury mandarins that have come up with this scheme.’

VAT-free shopping was axed by then-chancellor Mr Sunak when the UK left the EU. Kwasi Kwarteng tried to reintroduce it, but new Chancellor Mr Hunt (pictured) reversed the plan claiming it would save £2billion a year

The impact of the UK’s status as the only major western economy not offering the tax break is being felt right across the country.

The Oxfordshire designer shopping outlet, Bicester Village, said it has seen a ‘deflection of tourism’ to Europe.

Manchester’s tourism agency Marketing Manchester said the removal of VAT-free shopping had been a ‘hammer blow’, while the New West End Company, which represents hundreds of shops in London, said the decision is having ‘disastrous consequences’.

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