Scrap the tourist tax to boost retail and hospitality, says ALEX BRUMMER

By now we should have had our fill of potential tax changes that will be detailed in tomorrow’s spring budget.

The conservatives find themselves in a last chance and the main economic escape route is tax relief.

Following the latest set of forecasts from the Office for Budget Responsibility, Jeremy Hunt is struggling to find the least offensive revenue-raising and public spending savings measures to achieve results without breaking fiscal rules.

We have become a nation addicted to mid-course corrections. Last November’s Fall Statement included 50 new tax and spending decisions, and 67 if previous ad hoc measures are included.

Hunt’s direction of travel has been clear. His goal is to improve labor compensation, as demonstrated by the 2 percent reduction in social security contributions, which was approved in January.

Hunt also aims to get some of the estimated 750,000 people added to welfare rolls since Covid-19 into the workforce by tightening enforcement.

Compared to the overall tax burden, as a result of frozen subsidies, and the sclerotic pace of public administration, the political impact has been minimal.

In the run-up to fiscal events, it is quite unusual for CEOs to venture outside their comfort zone.

So all credit should go to Stuart Machin, one of M&S’s comeback team, for a forceful intervention accusing the Government of “economic illiteracy”.

For a decade, a reform of commercial rates has seemed necessary to reflect changes in the country’s purchasing habits and a distorted system.

Machin points out that with an effective tax rate of 45.7 per cent (including business rates), retailers are paying some of the highest taxes despite lower profit margins than other FTSE 100 companies.

Furthermore, the apprenticeship tax does not work due to regulation and bureaucracy. M&S has effectively self-funded the training of 12,000 young people.

Finally, he recognizes the validity of the Mail’s campaign to end the farce of charging tourists 20 per cent VAT for shopping in Britain.

The issue has remained silent despite signs that the Office for Budget Responsibility could give the go-ahead for abolition.

Machin is hopeful M&S can help restore Oxford Street as the country’s favorite shopping spot now that it is overcoming Michael Gove’s opposition to the redevelopment of its flagship Selfridges-adjacent store.

Reducing VAT for overseas visitors would be a big boost for retail and hospitality. It’s time to give our nation of traders something to celebrate.

Homecoming

Lloyd’s of London, along with the Bank of England and the London Stock Exchange, is one of the three pillars of the City.

The ‘Names’ scandal of 1988-92, the migration of unions to Bermuda and the settlement of sexual harassment charges more recently have diminished the prestige of the London insurance market.

So it’s great that Amanda Blanc is returning Aviva to Lloyd’s after two decades away, with the £242m purchase of Probitas.

Offers specialized underwriting, such as professional liability and property catastrophe.

Founded by former Eagle Star executive Ash Bathia and backed by Saudi Re, the change of ownership from Probitas to Aviva is a boost for Lloyd’s and Square Mile.

Since taking control of Aviva in 2020, Blanc has sold most of Aviva’s global operations and sacked activist investor Cevian.

Expansion plans now consist of bolt-on acquisitions in wealth and risk management rather than large deals.

Encouraging.

Secrets out of place

It’s hard not to feel schadenfreude following the National Audit Office’s report on the Bank of England’s ethical record.

The Bank is known for its rigor in ensuring that media exuberance is suppressed, locking up journalists for several hours when key monetary reports are published and removing newspapers from its distribution list if embargoes are violated. .

Despite reviewing its own internal compliance, there were 628 minor and 28 serious breaches (none identified) among colleagues in the year to August 2023.

As a school report would say: “He has difficulty completing work in a timely manner.”