OPINION - The Standard View: The Government must axe the tourist tax harming London
Ministers often stress that they are here to listen to business. A good place to start would be to axe the tourist tax on foreign shoppers before yet further damage is done to the capital’s global reputation — and economy.
The Evening Standard has long led the campaign against scrapping VAT-free shopping by the then chancellor, now Prime Minister, in January 2021. This decision instantly made it 20 per cent more expensive for foreign visitors to shop in London. And it represents a classic false economy — it made the capital more expensive and diverted high-spending tourists to other European cities.
Reintroducing tax-free shopping is “an absolute no-brainer”, in the words of Chris Hayward, policy chairman at the City of London Corporation. That is because high-value visitors are vital to the overall economic vibrancy of our city, spending money not only in shops but restaurants, hotels and other attractions.
Ministers need not wait for the Autumn Statement. The Government should act now, as part of its pledge to grow the economy and create better-paid jobs.
Housing is key to votes
There are not enough homes in this country — that is the view of the Housing Secretary, Michael Gove. The Labour Party agrees. So why can we not build more, not least in the capital?
The provision of housing will be a key election issue, and Keir Starmer is looking to own it. The Labour leader wants to give local councils the final say on whether homes can be built on green belt land, a policy likely to raise hackles. But it is a calculated risk.
First, because Londoners are crying out for places to live. The lack of supply is forcing costs up. Average monthly rents in the capital have hit a new record high of £2,210, a rise of 17.2 per cent on the year. Meanwhile, home purchase affordability is at its lowest since Victorian times. This supply squeeze also acts as an unnecessary constraint on the supply of labour, hampering economic output.
Second, Starmer can try and demonstrate leadership while the Prime Minister appears to be boxed in by his own party. Rishi Sunak was compelled to ditch plans for compulsory housebuilding targets following a backlash from his backbenchers and party members.
Politicians can dabble around the edges, with Help to Buy or stamp duty holidays. But the only permanent solution to ending the housing crisis is to build more homes.
Cannes’ wow factor
Glitz, glamour, not caring about what anyone else thinks — it must be Cannes. The film festival is underway with the usual quirks, auteurs and even the odd blockbuster.
The movies are still the main attraction, of course, but a close second may be a hoped-for chance to watch Indiana Jones star Phoebe Waller-Bridge dancing with fellow A-listers at the Disney party, on a golden sandy beach.