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How the high street's Tourist Tax campaign captured the attention of government

Consumer Industries
Corporate Reputation
Public Affairs

If the Daily Mail is running a campaign – as is the case of its Scrap the Tourist Tax - it is a pretty good indicator that the government will take notice. Whatever your views on the newspaper, its influence stretches deep into Whitehall and a story in its pages is far more likely to get the attention of a Minister of State than any private conversation ever could. That said, companies must be cautious if they decide to air their policy desires publicly because the notoriously thin-skinned government of the day will could just as quickly cut off communication if Ministers feel a business has been too critical.

The key to a successful approach is to build your asks of government slowly, gain momentum through bringing others in your sector on board and find a media ally who will highlight your cause in a manner that offers solutions, rather than just complaining about problems. With the Scrap the Tourist Tax initiative, all of those ingredients have come together and I would be surprised if the government did not act. The proposal at stake is to bring back VAT-free shopping for foreign tourists who spend money in the UK.

Before Brexit, visitors from outside the EU could reclaim the 20% VAT on purchases made whilst here. But it was subsequently scrapped to save the government some much-needed cash as part of the Brexit deal signed in 2021. Department stores were the biggest beneficiaries of the old rules, as rich tourists from China, the Middle East and the US spent big, particularly in London. They say the changes have subsequently kept tourists away, heading to Europe instead for their shopping trips. This is then having a knock-on effect on the hospitality sector more broadly, as fewer visitors are booking hotels, heading to restaurants and seeing West End shows.

The issue has been on the radar for some time, with industry bodies speaking out to little or no coverage. London Mayor Sadiq Khan gave his backing to the campaign earlier this year, which boosted its profile a little. But it took the chairman of Burberry – perhaps emboldened by the Daily Mail’s campaign – to call out the Prime Minister publicly to scrap it. Behind the scenes, the Mail has been trying to whip up as many businesses as possible to speak out and, with my former journalist hat on, it seems like a no-brainer to get behind a Daily Mail campaign that has limited impact on UK citizens and creates a positive relationship with a notoriously hostile newspaper.

Perhaps that is what emboldened Burberry chairman Gerry Murphy to call out Rishi Sunak at the Business Connect conference last month. He told the PM the decision to scrap the rules a “spectacular own goal”, adding: "It is somewhat perverse that on the day that we left the single market, a decision by, I think it was by you as chancellor, to remove the VAT refund for tourists made the UK the least attractive shopping destination in Europe.”

This public intervention sent the story to the top of the agenda and the PM promised to take a close look at it.  His comments – somewhat surprising from the notoriously risk-averse Burberry – led to other luxury brands and department stores speaking out as it was clear the PM was willing to have the conversation and not feel (at least in public) like it was an unfair challenge to make. No doubt Burberry will now be meeting with senior Government officials to discuss the issue in greater depth and if ever there was a chance to change the rules – now is that moment.

The key point with the campaign is this – businesses are desperate to make an impact on Government policy. They come to consultancies like ours for counsel, intelligence and the best approach to achieve those goals. But the reason consultancies like ours take a joined-up approach to communications and advocacy is because sometimes the best way to get Ministers to listen is through private conversations on the practical solutions needed, backed up with public pronouncements through the media to hammer home their point.