There can be no doubting the anger felt in London business circles over Jeremy Hunt’s decision not to restore VAT-free shopping for foreign visitors in the Budget.
It was not a total “no” however. The door is still open to “further submissions” to the Treasury before a final, final call is made. But hopes that the Office for Budget Responsibility could have provided some cover for a U-turn were well and truly dashed.
The OBR was essentially asked to mark its own homework dating back to 2020 ahead of Rishi Sunak’s original decision to end the perk.
Perhaps not that surprisingly, the OBR number crunchers went through its workings and found that — despite the huge change in the landscape since Brexit — they still deserved a tick.
What has been particularly interesting about the reaction from retail and tourism bosses is not so much the dismay — that was entirely predictable — but the number who have apparently given up on the Conservatives altogether and now look to Labour for salvation.
I could be wrong, but Scott Parsons, who runs London’s two Westfield shopping centres, strikes me as unlikely natural socialist. Yet he could not be clearer that for him the Tories have now run out of road and that Labour “is signalling a more encouraging future for the sector.”
It is not yet clear what Labour would do about the tourist tax. An early move to restore VAT shopping for wealthy tourists who do most of their shopping in central London could throw up presentational problems for an incoming Starmer administration.
But as one element of a responsible pro-growth Budget package — this time structured not to scare the hell out of the bond markets and thoroughly signed off by the OBR — you could see it happening.
