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The boss of Shakespeare’s Globe, Neil Constable, says that its ticket sales have fallen since a tax-free shopping scheme for international visitors was ended.
VAT-free shopping for tourists was scrapped in January 2021, only for Kwasi Kwarteng, when he was chancellor, to reintroduce it in his mini- budget.
Business briefing Morning and midday updates on financial and economic news from our award-winning business team. Sign up with one clickHowever, Jeremy Hunt, his successor, reversed the planned reinstatement. Business leaders have called for the scheme to be restored, with its repeal dubbed a “tourism tax”.
Constable said: “We at the Globe join in support of this campaign in asking the government to help create a dynamic economy which appeals to foreign investors and visitors.”
A study by the Centre for Economics and Business Research consultancy found that the economy would be £10 billion a year better off if the VAT refunds were reinstated. The Treasury also could benefit from an annual boost of £2 billion, it said.
During the pandemic the Globe called for urgent funding to avoid insolvency because of the “devastating” impact of the coronavirus. Constable said the pandemic had created a “hugely challenging environment for everyone in the UK and so it’s more important than ever to find long-term solutions to create an economically and culturally successful future. The UK should aim to be the most natural choice for those wishing to spend hard-earned cash at our incredible cultural offering, not just in London but UK-wide.”
Emma Fox, chief executive at Berry Bros & Rudd, Britain’s oldest wine and spirit merchant, said that if the government wanted to “guarantee the future of luxury British retail, we need to compete with other shopping destinations around the world and encourage tourists to make the most of all that London and British shopping has to offer”.
Last week Mulberry revealed a £14.8 million loss from the closure of its Bond Street shop in central London, which the luxury retailer shut after the tourism tax damaged trading.
The Treasury has said VAT-free shopping, which the government abolished after Brexit, does not directly benefit Britons.