Khan: Tourist tax-free shopping u-turn bad for London’s businesses

Sadiq Khan has slammed the government’s decision to u-turn on a plan to give tourists tax-free shopping.

The Mayor of London said he “absolutely” shared the concerns of West End businesses, who have expressed disappointment that the capital will lag behind other cities’ in efforts to welcome high-spending foreign visitors.

“VAT-free shopping for international tourists isn’t trickle-down economics – it’s enticing people to London rather than Paris, Dublin, Barcelona, elsewhere where they’re is tax-free shopping,” Khan told City A.M. this morning.

“Here’s the point the government doesn’t get: if tourists are coming here because they’re enticed by tax-free shopping, not only are they spending in our shops, they’re staying in our hotels, they’re eating in our restaurants, they’re going to our live gigs.

“Removing tax-free shopping isn’t benefiting the Burnleys, the Manchesters, the Glasgows, the Cardiffs, it’s benefiting the Parises, the Madrids and so forth,” the Mayor added.

The move has been slated by retailers in the West End, who had hoped the plan – announced in Kwasi Kwarteng’s mini-budget in September but ditched by new Chancellor Jeremy Hunt this week – would provide a welcome boost to the post-pandemic rebound of central London’s shopping areas.

Khan was speaking at a preview of the new Bond Street station on the Elizabeth Line, due to open later this month.