REVERSE DAMAGE TO ECONOMY BY RESTORING SHOPPING INCENTIVE FOR TOURISTS, URGE SCOTLAND’S BUSINESS COMMUNITY

Representatives of Scotland’s business community have joined forces to call on the Chancellor to restore a tax-free shopping incentive for international tourists. The campaign, led by the Scottish Chambers of Commerce (SCC) and the Federation of Small Businesses Scotland (FSB Scotland), seeks to:

1. Level the playing field as other countries such as France see visitor spending recover faster than the UK;
2. Reverse the economic damage as shops lose out on £1.5bn a year as non-EU visitors take spend elsewhere; and
3. Work with the Chancellor to introduce a competitive scheme which could boost the economy by £10bn.

Sarah Medcraf, CE of Moray Chamber of Commerce said: "We know that customers end up spending more with tax free shopping as they feel they're getting more for their money. We need to be competitive, and if we are serious about the UK growing our visitor numbers and our tourism economy, then this is a good place to start."

Dr Liz Cameron CBE, Director & Chief Executive, Scottish Chambers of Commerce, said: “The Chancellor has a clear opportunity to show the United Kingdom is open for business. It is now indisputable that the removal of tax-free shopping has damaged UK’s retail offering and has disincentivised international tourists from spending whilst in the UK. Our European competitors are providing a more competitive offering for visitors and are seeing visitor spending recovering much faster than the UK. We cannot be left trailing behind and this policy must be restored.

“By introducing a new internationally competitive tax-free shopping scheme, the Chancellor can help industry to turbocharge our retail offering for international visitors, revive our high streets, boost economic growth and generate tax revenues.”

Colin Borland, Director of Devolved Nations, FSB Scotland, said: “Introducing tax-free shopping would be like switching on a huge, neon “welcome” sign for British business. After years of turmoil, small firms across the UK are looking for reasons to be positive, and a £10bn benefit to the economy from a new tax-free shopping scheme, expanded to include the EU, would be a game-changer.

“With the Spring budget just a couple of weeks away, small firms in retail, hospitality and the supply chain across the regions and nations will be looking to the Chancellor for a bold move like this – more visitors, more spend, more growth and prosperity, more jobs and more consequential tax revenues for HM Treasury.”

Fraser Brown, Retail Director, Heathrow said: "Heathrow serves seven destinations across Scotland, facilitating trade, inward investment and tourism to some of the most remote parts of the country.

“The UK being the only country in Europe not to offer a proper tax-free shopping incentive means that although tourists are visiting, they are not spending. Iconic Scottish brands like Johnstons of Elgin are out of pocket as tourists are choosing to spend in Paris and Milan where goods are up to 20% cheaper, rather than in Edinburgh or London.

“Businesses big and small from across the country are clear, there can be no more delay. The Chancellor must act at the Spring Budget to level the playing field and introduce a new, competitive tax-free shopping scheme for international visitors.”

Dear Chancellor,

We, the undersigned, are writing to urge you to introduce a new, internationally competitive, tax-free shopping scheme for international visitors at the Spring Budget.

As the collective voices of Scotland’s business communities, operating across retail, tourism, manufacturing, hospitality, culture, and real estate, we collectively employ huge swathes of the public and contribute significantly to the Scottish and UK economy. The removal of tax-free shopping has had a negative impact on business revenue in Scotland, and for some, forced us to downsize operations, take steps to reduce our UK footprint and mitigate the impact across supply chains. Tourism is a vital part of the Scottish economy, and we were encouraged by your comments on making the British tourism and retail industry competitive at the Autumn Statement, and welcome your decision to review the economic impact of the removal of tax-free shopping. Research by the Association for International Retail shows that British shops are losing £1.5 billion per year as non-EU international visitors choose instead to spend in France, Italy, and Spain where tax-free shopping schemes are in place.

Businesses across Scotland would greatly welcome a decision to introduce a new internationally competitive scheme. From manufacturers and retailers to businesses and hospitality venues, in towns and cities across Scotland, to both big and small businesses - we would all benefit from a boost in visitor numbers and spend increase to match those we have seen in nations we compete with on the world stage. The Government seeks to position the UK as a global leader, secure its economic recovery, and boost the local economies up and down the country. We urge you to introduce a new, internationally competitive tax-free shopping incentive for all overseas visitors at the next fiscal event, a scheme that works for the Exchequer and the economy.

Yours sincerely,

Dr Liz Cameron CBE, Chief Executive, Scottish Chambers of Commerce
Andrew McRae, Scotland Policy Chair, Federation of Small Businesses (FSB)
David Lonsdale, Director, Scottish Retail Consortium
Liz McAreavey, Chief Executive, Edinburgh Chamber of Commerce
Colin Marr, Chief Executive, Inverness Chamber of Commerce
Marc Crothall MBE, Chief Executive, Scottish Tourism Alliance
Roddy Smith, Chief Executive, Essential Edinburgh
Kyron Keogh, Chair, Glasgow City Centre Retail Association
Adrian Watson, Chief Executive, Aberdeen Inspired BID
Russell Borthwick, Chief Executive, Aberdeen and Grampian Chamber of Commerce
Mike Stuart, Inverurie Whisky Shop & Foghouse Gin
Ron Duncan, C R Developments Ltd
Richard Cumming, Sirology, Elgin
Jamie Stewart, Juniper, Aberdeen
Peter Crome, The Carnegie Club at Skibo Castle
Neil Hampton, Royal Dornoch Golf Club
John & Nicola Sugden, Campbell’s of Beauly
Andy Johnstone, The Jail, Dornoch
William Crawford, The Old School, Beauly