The Champs Elysees in Paris
(Picture: CCO/pxhere.com)Amid the stampede of reversing ferrets yesterday one Jeremy Hunt U-turn slipped through with relative little attention. But it means a lot to London.
VAT free shopping for foreign tourists - axed by Rishi Sunak and restored by Kwasi Kwarteng - has once again been lobbed into the long grass, perhaps never to return.
It speaks volumes for the current ineptitude of government decision making that this measure - uncontroversial in virtually every other major tourist destination in Europe - has been the subject of such damaging short term political ping pong.
The Standard has long argued that the perk is essential if London is to recover fully from the lingering after effects of the pandemic. Parisian business leaders will today be toasting their bonne chance that the appeal of their rival across the Channel has once again been hobbled by another act of economic self harm.
Kwarteng’s now utterly discredited growth plan estimated the cost of VAT free shopping to the Treasury at around £1.3 billion in 2024/25 and around £2 billion thereafter. Hardly enough to move the dial in the gilts market but a huge blow to growth not just in London - as the Treasury originally argued - but all around the UK.
Clearly big decisions have been made at very high speed over recent days, but the Chancellor may well come to regret this particular reverse as London loses out on billions worth of spending over the coming years.
The message it sends to the rest of the world is a simple one: Enjoy the Champs Elysees.
