They were joined by bosses of Heathrow, Gatwick and London City airports, who warned London was losing out to cities like Paris and Milan as tourists abandoned the capital due to the loss of the tax break.
Business LDN, which represents some of London’s biggest firms, believes scrapping the tourist tax — which effectively makes prices 20 per cent higher in Britain — could generate £4.1 billion annually for the UK economy. It said: “We must do all we can to boost it.”
Businesses including leather goods companies Ettinger, Pickett London and The Cambridge Satchel Co, and Savile Row tailors Norton & Sons and Gieves & Hawkes, have written to Chancellor Jeremy Hunt to urge him to reinstate the tax concession. Trevor Pickett, boss of Pickett London, told the Daily Mail: “There’s an opportunity to encourage international customers to spend a little bit of extra money. The extra cash would not make a massive dent in the pockets of affluent tourists but would make a huge difference to me.”
London City Airport’s chief executive Robert Sinclair said: “The removal of VAT shopping is something we find, and the whole industry has found, very, very disappointing.” The Federation of Small Business, which represents 150,000 traders, backed the call. FSB spokesman Craig Beaumont said the tax hurts independent traders as well as bigger firms.
He added: “Many luxury goods desired by tourists from China and the US are bespoke products — if you want bespoke, posh or designer stuff, it is normally produced here.” The Standard has been campaigning for the reintroduction of VAT-free shopping for tourists, scrapped in 2021 when Britain left the EU.
The New West End Company said the amount spent by US travellers was down one per cent in the three months to June, compared with pre-pandemic levels, with a 17 per cent drop for visitors from the Middle East. But spending by Americans rose by 183 per cent in France and 174 per cent in Spain, with tourists from the Gulf spending 118 per cent extra in France and 112 per cent more in Italy.
Mayor Sadiq Khan has described tourism as a “key contributor” to London’s economy and said he will continue to urge the Government to reinstate VAT-free shopping.