Tory Mayor candidate Shaun Bailey calls on Rishi Sunak to U-turn on scrapping Duty Free for tourists

Conservative Mayor candidate Shaun Bailey today upped the pressure on chancellor Rishi Sunak to reverse the plan to end duty free shopping for tourists.

The government has announced it would stop tourists being exempt from VAT, saving the Treasury £521 million in lost taxes every year.

However, retailers, entertainment and hospitality companies have warned the move will put big spending tourists from China, the Middle East and elsewhere off coming to London and cost as many as 60,000 London jobs.

Bailey wrote: “I appreciate that we need to save money, but there’s a real risk that ending duty-free shopping will cost us more than it saves.”

He said tourists were extremely price sensitive, as shown by the 38% surge in tourist duty free spending that followed sterling’s fall after the 2016 Brexit referendum.

Citing a poll by researcher Global Blue, he said “three in five high-spending tourists from the Middle East, China and the Far East would no longer visit the UK if these duty-free changes go into effect.

“This would have all kinds of knock-on effects for businesses across the UK, but it would disproportionately hurt London.

“Fewer tourists mean less spending and, ultimately, fewer jobs.

“In the middle of a pandemic, we can’t afford to let that happen. So I’m asking you to retain the duty-free scheme as it is.”

Global Blue has calculated the VAT refund cut will end up costing the economy £6 billion a year in lost tourist spending, reducing tax revenues by £3.4 billion as tourists choose to shop in Paris and Milan instead.

London will suffer around £3 billion of that lost spending, it calculated.

Selfridges chief executive Anne Pitcher told the Evening Standard it would stop businesses investing in their operations and creating new jobs.