The chair of Burberry has called Brexit a “drag on growth” and asked Rishi Sunak to reverse a decision to remove tax-free shopping for tourists that has left Britain nursing the “weakest” Covid recovery among its big markets.
Gerry Murphy, the chair of the £10bn trench coats to handbags fashion house, told the prime minister that a decision to remove VAT refunds in 2020 has hurt the economy and was a “spectacular own goal”.
Speaking from the audienceat an event for business leaders organised by government in London, Murphy labelled the decision – made in 2020 by Sunak when he was chancellor – as “somewhat perverse” and that it had made the UK the “least attractive shopping destination in Europe”.
He said Burberry, the UK’s largest fashion brand, had analysed sales data across Europe including in Paris, Milan and Munich and that Britain was showing “by far the weakest recovery” from Covid of its big markets. He said Britain was “actively exporting business as a result of that policy to our continental competitors”.
The government’s decision to withdraw the VAT retail export scheme made the UK the only European country not to offer tax-free shopping to non-EU tourists.
Murphy told Sunak: “I would ask you in the spirit of making Britain a more competitive environment, in the spirit of fostering growth – and not just in the luxury industry, but also it knocks on to travel to hotels, airlines airports – to reconsider that decision.”
Murphy, who has chaired Burberry since 2018, said it had warned the Treasury of the impact of the policy and that was playing out as tourism returned after the pandemic.
Murphy said: “I would ask you and the chancellor to revisit this. It was a bad decision made for the right reasons. I understand the
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