As the Brexit debate rages on, and with the end of the transition period looming, the pressure is on to draw a line under deal talks by the end of October. Much has been made of the potential benefits for UK consumers in the event of no-deal – a Brexit Bonus, if you will. But this is not the only avenue that the UK has for reaping rewards from Europe.
Earlier this month, New West End Company – along with 100 other businesses from across the UK – sent the Treasury a letter urging the government to make EU visitors eligible for tax-free shopping when we leave the bloc at the end of the year.
Brexit presents a unique opportunity for us to make this change, with or without a deal. Currently visitors from EU member states are specifically excluded from the tax-free shopping scheme. But changing just six words in our regulation would open the door to throngs of new customers for our struggling retailers.
About 70 per cent of all international visitors to the UK come from the EU, and they will only grow in importance as the country eases its way out of the coronavirus pandemic. Not only are they more likely to return quicker than long-haul visitors, but they are also more likely to spend throughout the entire country.
Providing these essential EU shoppers with tax free shopping would generate an estimated additional £1.4bn in annual retail sales. This would secure 28,000 retail jobs, and boost the wider tourism economy to the tune of £2.1bn This is the shot in the arm that is so desperately needed after a chastening six months.
The lockdown has hit UK cities and their high streets hard. Despite shops reopening three months ago, footfall remains dangerously low, with footfall across the West End down 63 per cent year on year.
Yet, if we do not swiftly change our stance on tax-free shopping, it will not simply be the case of losing potential shoppers from the EU, but also domestic trade too. EU countries have long looked hungrily at the spending power of UK shoppers, and no doubt will be keen to offer tax-free shopping to those Brits seeking city breaks.
While retailers and leisure occupiers alike struggle with empty high streets and the prospect of increased costs from business rates on the horizon, it is vital that we consider the worst case scenario. It is a bleak scene of barren high streets, boarded up shops and thousands without jobs.
This goes beyond London into other key retail markets such as Manchester and Edinburgh. But we should be most concerned with the West End.
The area is so much more than a collection of high streets. It is the shop window to Britain, a tremendous source of foreign investment and the first port of call for global brands when they reach our shores.
If we want to protect this status beyond 2021, we must urge the government to act now, and use tax-free shopping to help protect our cities as we start on the road to recovery.
Jace Tyrell is chief executive of the New West End Company.