Priti Patel leads dozens of MPs and peers calling for Rishi Sunak to scrap the controversial ‘tourist tax’
Dame Priti Patel is among dozens of MPs and peers who yesterday joined the growing clamour for Rishi Sunak to scrap the controversial ‘tourist tax’ holding back Britain.
The former home secretary is the most high-profile Tory yet to join the call to reinstate tax-free shopping for overseas visitors, piling pressure on the Prime Minister to act.
She was one of 40 cross-party MPs and peers who sent an open letter to Mr Sunak warning that the measure was needed to give the economy a shot in the arm.
Failure to act risks permanently damaging the economy and the UK’s global reputation as visitors desert Britain for European countries where tax-free shopping for tourists still exists, they wrote. They added that reintroducing the scheme would lead to more visitors across the country.
The letter, led by Tory MP Henry Smith, was also signed by ex-Cabinet minister Sir John Redwood and three former aviation ministers. It comes after another 40 MPs wrote to Mr Sunak in May calling on him to reinstate the perk.
Dame Priti Patel is among dozens of MPs and peers who have called for Rishi Sunak to scrap the ‘tourist tax’
The pressure is now piling on for the Prime Minister to reinstate tax-free shopping for overseas visitors
Hundreds of leading figures from across the retail, hospitality and tourism sectors have already backed the Daily Mail’s campaign to Scrap the Tourist Tax. Luxury retailers have warned that more wealthy international shoppers are ditching London in favour of cities such as Paris and Milan.
Prior to 2021, visitors to Britain from outside the European Union could claim back the value added tax (VAT) charged on their purchases – giving them a 20 per cent discount. Mr Sunak scrapped the arrangement as chancellor to save the Treasury £2billion a year, but the scheme remains in the EU.
In yesterday’s letter, seen by the Mail, the politicians warned the move was ‘undermining’ Britain’s recovery from Covid and boosting tourism to other nations. They added: ‘The consequences… are being felt across the UK, with tourism, hospitality, retail and manufacturing all reporting this policy is holding back their businesses and the UK economy.
READ MORE: More than 300 high street giants call on Chancellor to scrap the tourist tax
‘Tourism makes a significant contribution to our high streets… with high-spending visitors from the Middle East and the USA a key part of the £29.1billion contribution it made to the economy in 2019. It is vital we are as appealing as possible to these markets otherwise British business will lose out to our nearest competitors.’
They also called for the introduction of duty-free goods at arrivals halls in airports, international rail and ferry terminals. ‘The absence of arrivals duty-free stores is incentivising British nationals to spend money abroad. If introduced, recent research predicts there would be a 20-30 per cent passenger spending increase,’ they said.
Other Tory MPs are privately supportive, but were unable to sign the letter as they are on the Government payroll. Many point to analysis showing there could be a net gain of £350million. An Oxford Economics study suggests it would bring a £4.1billion boost to GDP and support 78,000 jobs.
Mr Smith, chairman of the cross-party Future of Aviation group of MPs, said VAT-free shopping ‘must be reintroduced without further delay’.
He added that the Government ‘must also end the bizarre situation that our more generous duty-free allowance introduced after we left the EU is only benefiting other nations’ economies’.
A Treasury spokesman said VAT-free shopping ‘does not directly benefit Brits’ and that fewer than one in ten non-EU visitors used the previous scheme, adding: ‘The scheme could cost taxpayers around £2billion a year at a time when we’ve already had to take difficult decisions to get debt falling.’
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