- He is the latest minister to pile pressure of Jeremy Hunt to ditch the levy
Conservative Party chairman Greg Hands privately backs scrapping the disputed tourist tax, The Mail on Sunday understands.
He is the latest Cabinet Minister to pile pressure on Chancellor Jeremy Hunt to ditch the levy in a bid to boost British tourism.
Sources close to Mr Hands say the MP for Chelsea and Fulham understands the benefit that returning tax-free shopping would provide – particularly for businesses in Central London.
It comes after Business Secretary Kemi Badenoch revealed that firms often raise the issue of bringing back VAT-free shopping with her, and that she was ‘keen for them to know we understand their arguments’.
This newspaper has led a campaign to ‘scrap the tourist tax’, which was reintroduced after last year’s mini-Budget. But Treasury insiders last night insisted they had no plans to row back on the controversial charge in the Autumn Statement due November 22.
A senior Government source has also told the MoS that Mr Hunt’s agenda will be ‘more of a Budget’ and bigger in scope than expected.
Government whips have scheduled three days of debate and votes on the Autumn Statement, which suggests it has more fiscal measures ‘akin to a mini-Budget’, another explained – despite the Chancellor’s expected lack of fiscal headroom. A Treasury insider added: ‘Budgets can be small and Autumn Statements can be big.’
It comes as new figures estimate the Treasury missed out on more than £200 million last year because of the lack of VAT-free shopping.
The tourist tax is also thought to have cost British retailers £1.5 billion in lost sales in 2022, according to figures compiled by the Association of International Retail (AIR).
It claimed the extra funds could have supported 26,000 jobs – meaning the employment market is suffering, too.
The research has been submitted to the Treasury to provide evidence of the impact of ending tax-free shopping. It has been seen by at least one senior Cabinet member, The Mail on Sunday understands.
AIR wants the Chancellor to commit to launching a review into the issue in the Autumn Statement as it fears the Treasury did not take into account the impact the tax has had on other parts of the tourism industry – such as restaurants and hotels.
AIR is just one of hundreds of retailers and organisations calling for the levy to be scrapped.
Mulberry, Marks & Spencer, Fortnum & Mason and Bicester Village are among more than 400 groups that have signed a petition asking for the Chancellor to reconsider.
A Treasury spokesman said: ‘The key motivators for tourists visiting the UK are our rich history and vibrant towns and cities – not shopping.’