We attract millions of international visitors every year, but we are not doing enough to persuade them to spend while they are here. At his Autumn Budget, the Chancellor should review the last government’s disastrous decision to scrap tax-free shopping – a simple measure that could give our visitor economy a substantial boost.<\/p>\n
The evidence is compelling. New research by the Centre for Economics and Business Research (Cebr), commissioned by Heart of London Business Alliance and published today, estimates that restoring tax-free shopping would generate \u00a311.5 billion in additional economic output, support 153,000 jobs and deliver a \u00a32.6 billion net benefit to the Exchequer.<\/p>\n
These are not marginal gains. They are the sort of numbers that should make any Government focused on “growth in every postcode” sit up and take notice.<\/p>\n
The problem is that while international visitor numbers have broadly recovered since the pandemic, their spending has not. In 2024, overseas visits were just 1.3 per cent below 2019 levels, yet real visitor expenditure was still 8.7 per cent lower. Average spending per visit had fallen from \u00a3848 to \u00a3786.<\/p>\n
In short: we are getting the tourists back, but too much of their spending is going elsewhere.<\/p>\n
International tourism is about much more than retail. A visitor who spends in a shop also spends in a hotel, restaurant, theatre, museum or taxi. Their spending supports jobs and businesses throughout the economy and across the country. Cebr estimates that restoring tax-free shopping could attract up to 2.35 million additional international visitors and generate \u00a34.1 billion in additional tourism spending.<\/p>\n
Meanwhile, our European competitors continue to offer tax refunds to eligible international visitors. France, Italy and Spain have all retained schemes that make their destinations more attractive to high-spending tourists.<\/p>\n
Britain should be competing on a level playing field, not conceding ground to its rivals in this way.<\/p>\n
There is also an opportunity here that we should not overlook. The rules have changed since Britain left the EU. A restored scheme would include visitors from both the EU and the rest of the world. That would give Britain something our European competitors simply cannot offer in the same way: the ability to compete for tax-free shoppers from the huge EU market while also attracting high-spending visitors from North America, the Middle East and Asia. That is a competitive advantage – a potential Brexit benefit, if you want to call it that – that we should be making the most of.<\/p>\n
The benefits would not be confined to London. Cebr estimates that restoring tax-free shopping could generate \u00a31.3 billion in additional economic output in Scotland, around \u00a31 billion in the North West, \u00a3900 million in the South East and almost \u00a3400 million in the West Midlands, alongside significant gains in Wales and elsewhere.<\/p>\n
The Government’s growth ambitions extend to every part of the country. Tourism is one of the clearest ways of spreading that growth because international visitors spend across so many sectors and regions.<\/p>\n
The Government does not need to make a leap of faith. Like our European rivals, we had a tax-free shopping scheme for decades that we know worked well and attracted tourists to the UK. Ministers need to look at the evidence and ask a straightforward question: why is Britain making it harder for international visitors to spend money here when our competitors are actively encouraging them to do so?<\/p>\n
The answer should be clear. We should welcome the visitors, welcome their spending and give Britain’s tourism economy every chance to compete.<\/p>\n
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Ros Morgan is chief executive of the Heart of London Business Alliance.<\/strong><\/p>\n LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.<\/strong><\/p>\n