Rishi Sunak will listen to calls to axe ‘tourism tax’ damaging London’s economy

Prime Minister Rishi Sunak who is open to hearing case for ditching the ‘tourism tax’  (PA Wire)
Prime Minister Rishi Sunak who is open to hearing case for ditching the ‘tourism tax’ (PA Wire)

Rishi Sunak is ready to listen to growing calls to axe the “tourism tax” damaging London’s economy, Downing Street said on Tuesday.

No10 made clear the Prime Minister’s willingness to hear the views of business chiefs in the capital.

The PM’s official spokesman said: “We are always happy to listen to the sector about their concerns and obviously we will respond accordingly.”

The comment came after a trade minister appealed to London hospitality chiefs to give him data on how the “tourism tax” is damaging the economy so he can make the case to the Chancellor to axe it.

Nigel Huddleston, who is also a former tourism minister, stressed that Jeremy Hunt would consider whether to keep the levy when he next examines tax policy for the Autumn Statement.

But he stressed the decision whether to bring back the VAT refund for overseas visitors would be based on a “balance” between encouraging tourism and raising funds needed to pay for public services like the NHS and schools.

Hundreds of firms in the capital are urging the Government to restore tax-free shopping for overseas tourists.

They are warning that scrapping it is leading to more wealthy tourists travelling to capitals such as Paris rather than London.

Mr Huddleston stressed Mr Sunak was lobbied on ditching the tourism levy at a Business Connect event a couple of weeks ago.

Speaking on LBC Radio on Monday, he added: “Tax policy is always looked at in the advance of fiscal events the next one being later on this year.

“(Tax) can influence people and we always keep an eye on what other countries are doing as well to make sure that we are globally competitive.

“We always keep these things under review.”

He added that the tourism economy had “really bounced back strongly” since international visitors could travel after the Covid pandemic.

But he urged tourism and hospitality chiefs to provide his department with “information and data” which they believe shows the tax was “deterring people coming to London”.

He explained: “If we got rid of the tax, then there would be some loss of revenue which we need to pay for our essential services.

“So it’s all a matter of balance. The Treasury will always look at this.

“I engage with the hospitality industry as well as do many colleagues.

“The appeal is please give us the data and the information and then that will help inform our decision-making.”