Tourist Spending: VAT - Question

Part of the debate – in the House of Lords at 3:17 pm on 24 May 2023.

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Photo of Baroness Penn Baroness Penn The Parliamentary Secretary, HM Treasury 3:17, 24 May 2023

My Lords, I would say to the noble Lord that the Government have looked very carefully at the Oxford Economics analysis, and we do appreciate that some of the costs would be offset by higher visitor numbers and their spending. However, the OBR’s and the Government’s previous analysis suggested that the offset was marginal and the policy still comes with significant fiscal costs. One of the key differences between the Government’s costings and those produced by Oxford Economics is the assumptions around additional visitor numbers, with the OBR estimating that VAT-free shopping could bring in 50,000 to 80,000 additional visitors and the industry commission report suggesting 1.6 million additional visitors.