Heathrow, Selfridges and Harrods warn shoppers will leave London for Milan

By Adrian Zorzut, Local Democracy Reporter

The bosses of Heathrow, Selfridges and Harrods have warned that shoppers will leave London for Milan or Paris unless the Government reinstates duty-free shopping.

The heads of the UK’s top high-end shops claimed they were at a disadvantage because shoppers could simply travel to rival European destinations to spend their money.

It comes after the Mayor of London, Sadiq Khan, co-signed a letter on Tuesday to the Chancellor of the Exchequer, Jeremy Hunt, calling for the shopping perks for international visitors to the UK to be reinstated.

He wrote: “Our rich ecosystem of shops, hospitality venues and cultural attractions is heavily dependent on both domestic and international tourists.

“That is why together, London’s business groups and I have repeatedly called on the Government to support the return of international tourists back to London, in what is a highly competitive international market, by reinstating tax-free shopping for overseas visitors and also extending this to EU visitors.”

Steve Medway, chief executive of the Knightsbridge and King’s Road Partnerships, representing more than 500 businesses in the Kensington and Chelsea area, including major signatories to the letter, said: “The Mayor’s letter hits the nail on the head; the withdrawal of tax-free shopping puts London as an international tourist destination at a disadvantage.

“London has everything to offer, and much to gain, if the Chancellor sees reason and reintroduces a benefit that visitors from newly reopened China can get if they choose Paris or Milan instead of London.”

Kay Buxton, chief executive of Marble Arch London BID, which signed the letter, claimed research showed that reinstating duty-free shopping could add £3bn to the UK economy.

An HM Treasury spokesman said: “The Chancellor has been clear that being responsible with the public finances is a priority.

“Introducing a wide-ranging VAT-free shopping scheme would come at too high of a cost, as has been supported by previous estimates from the Office for Budget Responsibility.

“Tax-free shopping continues to be available for all non-UK visitors who purchase items in store and have them sent directly to their overseas address.”

He said the Office for Budget Responsibility found that removing Vat-free shopping would raise a significant amount of revenue and have a limited effect on people’s choices to visit or spend their money in the UK.

Pictured top: Harrods, in Brompton Road (Picture: Michael Craven)