Labour leader Keir Starmer is facing growing calls from business leaders to scrap the so-called tourist tax, which they argue is damaging the UK's retail and hospitality industries. The controversial policy, which ended VAT-free shopping for international visitors, has been blamed for deterring high-spending tourists from visiting Britain.
Business Leaders Sound the Alarm
Prominent figures in the retail and hospitality sectors have warned that the tax is putting the UK at a competitive disadvantage compared to European rivals like France and Italy, where VAT refunds remain in place. They argue that wealthy tourists are now choosing to spend their money elsewhere, hitting British businesses hard.
Impact on Key Sectors
The removal of VAT-free shopping has had a particularly severe impact on:
- Luxury retail stores
- High-end hotels and restaurants
- Cultural attractions and tourist hotspots
Industry experts estimate that the policy change has cost the UK economy billions in lost revenue since its introduction.
Political Pressure Mounts
With a general election looming, Starmer is under increasing pressure to clarify Labour's position on the issue. Business leaders are urging him to commit to reinstating VAT-free shopping if Labour wins power, arguing that it would provide a much-needed boost to the UK's economic recovery.
The debate comes as new figures show a significant drop in spending by international visitors in London and other major UK cities since the tax was introduced.
