Now Harvey Nicks warns Britain is ‘losing its appeal’ as a shopping destination as visitors are deterred by the tourist tax
- Harvey Nichols chief Manju Malhotra among 200 business leaders to speak out
- Malhotra signed an open letter to the Chancellor that calls the policy ‘puzzling’
The UK is ‘losing its appeal’ as a shopping destination for tourists due to the absence of a VAT-free shopping incentive, the boss of department store Harvey Nichols has said.
Manju Malhotra, chief executive of the 192-year-old company, is among around 200 business leaders to back The Mail’s Scrap the Tourist Tax campaign.
Harvey Nichols – which has stores in Knightsbridge in London, Liverpool, Birmingham, Leeds, Manchester, Bristol and Edinburgh – has heaped pressure on the Chancellor to reverse the change from 2021.
Malhotra signed an open letter to the Chancellor that calls the policy ‘puzzling’, alongside household names like Harrods, Burberry and Marks & Spencer.
Overseas visitors are cutting down the time they spend in London and choosing to splash their cash on expensive handbags and clothes in Paris and Milan instead, Malhotra said.
Manju Malhotra (pictured), chief executive of Harvey Nichols, is among around 200 business leaders to back The Mail’s Scrap the Tourist Tax campaign
Malhotra (pictured with Gary Barlow at Knightsbridge store in December) signed an open letter to the Chancellor that calls the policy ‘puzzling’
Malhotra told The Daily Mail last night: ‘Following the removal of tax-free shopping in the UK, we have seen that international travellers have diverted to other European cities like Paris and Milan for spending and more worryingly, we are seeing that the UK is losing its appeal as an international tourist destination.’
Many tourists plan trips to Europe with a mind on what products they can pick up for a cheaper price tag, meaning price comparisons between the UK and rival cities are ‘a significant consideration’ for potential holidaymakers.
Her words echo similar comments from the bosses of department stores Harrods and Selfridges, who have warned the UK faces an uphill battle to woo Chinese tourists back after lockdown.
Fresh warnings from businesses come as Prime Minister Rishi Sunak faces mounting pressure to scrap the tax.
Backers of The Mail’s campaign include dozens of cross-party MPs and peers, as well as former PM Liz Truss and Labour London mayor Sadiq Khan.
It was not just fashion designers on Bond St impacted by the levy, Malhotra said, arguing tourist spending is ‘the fuel we need to support hospitality, hotels, culture and retail’, which all sustain the wider economy.
She said: ‘This is not an issue confined only to the population of luxury retailers, or wealthy visitors from overseas, but this impacts spending at all levels by visitors to the UK and will compound the current weakness in the UK economy.’
‘Tourists and visitors are fundamental to the UK economy. Their spending is the fuel we need to support hospitality, hotels, culture and retail, which in turn means a stronger economy and increased employment.’
Harvey Nichols – which has stores in Knightsbridge (pictured) in London, Liverpool, Birmingham, Leeds, Manchester, Bristol and Edinburgh – has heaped pressure on the Chancellor to reverse the change from 2021
Backers of The Mail’s campaign include dozens of cross-party MPs and peers, as well as former PM Liz Truss (left) and Labour London mayor Sadiq Khan (right)
Last week government minister Paul Scully (pictured) broke cover and admitted ‘hundreds of millions of pounds’ is lost in revenue because shoppers are choosing to go to European cities rather than London
Harvey Nichols (Birmingham store) had also started to see ‘a change in behaviour’ from UK residents taking advantage of the VAT incentive and buying ‘big ticket items’ in mainland Europe
The retailer had also started to see ‘a change in behaviour’ from UK residents taking advantage of the VAT incentive and buying ‘big ticket items’ in mainland Europe.
Reinstating the scheme could be ‘one clear solution to the UK economic challenges’, as hotels and restaurants are still recovering from the pandemic, Malhotra added.
‘As the important summer season approaches, we need to see genuine engagement as soon as possible from the top of Government with business leaders.’
Last week government minister Paul Scully broke cover and admitted ‘hundreds of millions of pounds’ is lost in revenue because shoppers are choosing to go to European cities rather than London.
He said while some people view it as ‘big shops getting a tax rebate’, he believes it will bring in ‘hundreds of millions pounds of lost revenue to this country’.
But Rishi Sunak reportedly told MPs that his parents-in-law ‘don’t come here to shop’, when responding to those calling for a U-turn.
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