Manju Malhotra’s Post

I just came back from a delightful long weekend in Lisbon and, alongside enjoying the sunshine and incredible food, I did some shopping. Now that I’m back, my shopping experience in particular has me thinking. While I was away, I bought a couple of items from a well-known contemporary fashion brand. After adjusting for European pricing, exchange rate and tax refund, the final cost to me was £680. I was curious to see how much it would be, if I’d shopped in London instead of Lisbon and I was surprised that the exact same items would have cost £978. Put simply: ✨ The purchase was 30% cheaper in Lisbon than in London. ✨ The savings alone covered my accommodation. Looking at these numbers on the eve of one of the most anticipated Budgets - with speculation about a potential tourist tax and the ongoing debate around tax-free shopping - the numbers speak for themselves. London has enormous appeal to international visitors: culture, history, food and shopping, but we can’t ignore the consequences on consumer behaviour of tax policy when both domestic shoppers and international visitors know they can buy the same items significantly cheaper elsewhere in Europe. At the moment, UK retailers are at a price disadvantage with the rest of Europe, and with the potential introduction of a tourist tax, for retailers, their chances of attaining profits will be knocked even further. As Rachel Reeves sets out her plan to boost the economy, if the aim is real economic growth, we should be removing barriers to spending, not adding them.