The Notebook: Hunt must scrap the tourist tax if the UK wants to stay competitive
Where the City’s movers and shakers have their say. Today, James Chapman, Director of Soho Communications, takes the Notebook pen.
The tourist tax is causing the UK to fall behind European rivals
Ahead of his Spring Budget, Chancellor Jeremy Hunt is casting around for measures to promote that most elusive of things, economic growth.
It’s a feeling I know well from my days at the Treasury as an adviser to George Osborne.
Happily, there is one pro-growth measure Mr Hunt can take down from the shelf and announce on March 6 that will win plaudits from across the business community and stimulate the economy.
For the last year, the PR firm I co-founded, Soho Communications, has been coordinating a campaign to scrap the so-called ‘tourist tax’. Clients including Rocco Forte Hotels and Kurt Geiger told us their businesses were being hit by the removal of tax-free shopping for tourists by Rishi Sunak in 2021.
For decades, overseas visitors to the UK had been able to claim the VAT back on goods they purchased while here. Now, they can’t. Every country in the EU still offers tax-free shopping, meaning visitors are increasingly flocking to Paris, Berlin and Milan instead of coming here.
The Prime Minister has previously argued that it’s just luxury retailers in a tiny corner of London’s West End who are affected. But high street businesses like Primark and M&S have signed up to our campaign. Other signatories to an open letter being sent to the Chancellor this week include British Airways, Heathrow, Gatwick, Burberry, Mulberry, the British Fashion Council, Lord Lloyd Webber, Shakespeare’s Globe, the Royal Academy of Arts, the Royal Opera House, Victoria Beckham, Jigsaw, Bicester Village and even London’s largest McDonald’s franchise chain.
Analysis by the Centre for Economics and Business Research shows that scrapping the tourist tax would boost visitor numbers to the UK by two million a year and provide a net gain of more than £2 billion to the public finances.
Current Government policy doesn’t make sense and puts the UK economy on the back foot compared to our EU rivals. Be bold, Chancellor, and scrap the tourist tax.
The Westminster bubble
I worked in Westminster for 15 years as a journalist and then a Government adviser. While I loved much of my time there, and proximity to power is an intoxicating thing, having stepped away I don’t miss it at all.
It’s called the ‘Westminster bubble’ for a reason. It’s removed from the real world and spending too long there can lead to a misguided belief that what you’re doing is more important than what’s going on anywhere else. For me, in the end it also proved corrosive to my mental health. To my former fellow bubble dwellers thinking of a change, I say this: there’s a whole world waiting for you outside.
Advertising is saying you’re good. PR is getting someone else to say you’re good.
Former Apple executive Jean-Louis Gassée perfectly summed up my business and why it’s so important. Today, the speeding up of news cycles brought about by social media means reputations can be won or lost in a matter of minutes. What others are saying about you, and how you seek to influence and engage with that, matters more than ever.
A worrying precedent for press freedom
I was dismayed to hear Government minister Huw Merriman, engaged in the latest hapless round of Tory culture wars, claim that a BBC reporter he named as “Neil Buchanan” was biased against the Government’s welfare reforms.
Mr Merriman meant social affairs correspondent Michael Buchanan (Neil Buchanan was the presenter of a children’s art programme in the 90s). Even though he couldn’t get the name right, we’ve come to a pretty pass when ministers start attacking the work of individual journalists they don’t like. They should have more respect for the freedom of the press.
Great music in a top London venue
For me, one of the best things about living within striking distance of central London is that I can see lots of live music. Last year’s highlight was undoubtedly The Japanese House, otherwise known as indie pop musician Amber Bain. She and her band were spectacular, and I urge you to check out their latest album In the End It Always Does, but the cherry on the cake was the venue, Outernet London. It’s a new space hidden four storeys under the vast LED screen installation at Tottenham Court Road. It can accommodate a crowd of 2,000 and has the most incredible, crystal clear sound quality I have ever heard. A treat for the ears.