Business and tourism leaders are asking Chancellor Jeremy Hunt to bring back tax-free shopping for overseas visitors to boost local economies by hundreds of millions of pounds.
The Association of International Retail is calling for the return of tax-free shopping, saying the move could bring billions into the Ƶ economy. It says the measure would “restore the £1.5bn loss of spending by non-EU visitors and create a unique new EU shopping-led tourism market worth £10bn annually.”
£5bn of that new EU market spending would be outside London, and that airside tax-free shopping could generate £2bn “with much of that spent in regional airports”. It estimates that £10bn EU market could support 200,000 retail, hospitality and travel jobs.
That call has been backed by business and leisure leaders in Liverpool city region, Cheshire and Warrington - who have also written to the Chancellor to urge him to make the tax change in his Budget statement in March.
The letter from Liverpool to Jeremy Hunt is signed by Bill Addy, CEO of Liverpool BID Company, Lucy O'Shaughnessy, commercial director at Liverpool John Lennon Airport, Jennina O’Neill, centre manager at Metquarter and chair of the city’s Retail & Leisure BID, Donna Howitt, place strategy director at Liverpool One; and Marcus Magee, general manager at Hilton Liverpool and chair of Liverpool Hospitality.
It talks about Liverpool’s strong visitor economy and appeal to international businesses.
And it says: “Tax-free international shopping is a valuable aspect of this. We can see the impact of this on our spend data. The total International Spend in Q3 of 2023 is down -10.5% compared to Q3 of 2022. International tourist spend outside of Europe has dropped -34.6% in Q3. This lack of international tourist spend outside of Europe is being impacted greatly by the lack of tourists from the Middle East. For example, we have seen a -48% decrease in spend from Saudi Arabia which attributes to £493k in spend. We can also see a decrease in spend in Kuwait (-73.7%) which attributes to £469k worth of spend.
“The re-introduction of tax-free shopping would provide a much needed boost to our city centre economy translating to valuable jobs, and economic self-sufficiency. It would increase footfall in key destinations within the city centre, boosting the city’s visitor economy and tourism spend.
“Tax-free schemes boost retail spending by tourists. This increase in consumer spending would increase the city’s GDP and stimulate job creation. Not only would this impact retail and hospitality, but the ripple effect along the supply chain to the wider city region and beyond would have a positive impact throughout the North West.”
The Cheshire and Warrington letter has been signed by political and business leaders including Louise Gittins, leader of Cheshire West and Chester council, Hans Mundry, leader of Warrington council, Trevor Brocklebank, chair of Marketing Cheshire, and chief executives of local chambers. It asks the Chancellor to “supercharge the continued recovery and growth of our tourism industry by reintroducing tax-free shopping for visitors from the EU.”
It says: “The Cheshire and Warrington visitor economy continues its upward growth towards, and in time, beyond pre-pandemic levels. There is considerable work taking place in our region to improve our visitor offer, accessibility and promotion.
“We urge you to support us by reintroducing tax-free shopping to EU visitors. This would accelerate that growth, and signal your Government’s backing for, and commitment to, level up the Ƶ visitor economy. It would seize on a major benefit of leaving the EU, providing Ƶ Plc with the USP we need to attract more European travellers. And it would bring hundreds of millions of pounds of income into the North West, into Cheshire and Warrington, invigorating our economy, safeguarding employment and creating thousands of new jobs.”
