By Andy Silvester
SADIQ KHAN has warned that instability at the top of British politics could hit London’s status as a desirable investment destination.
Investors are “not sure that the stability and certainty that existed in London will be there going forward,” the Mayor of London told City A.M. yesterday.
“Instability is good for no-one,” he added.
A series of tax cuts announced by the now-sacked Chancellor Kwasi Kwarteng were reversed almost in their entirety by his successor Jeremy Hunt on Monday.
A cut in corporation tax, described by Kwarteng and the Prime Minister Liz Truss as a boon to investment, is amongst the u-turns.
“There is confusion about the pound, confusion about the bond market, confusion about the future of policies going forward,” he added.
Khan also took aim at the government’s u-turn on tax-free shopping for foreign visitors to the capital – a measure announced by Kwarteng and ditched by Hunt.
Under Kwarteng’s plans, tourists would have been able to reclaim VAT from purchases in the capital – a practice commonplace in other countries.
“VAT-free shopping for international tourists isn’t trickle-down economics – it’s enticing people to London rather than Paris, Dublin, Barcelona, elsewhere where they’re is tax-free shopping,” Khan told City A.M. yesterday.
“Here’s the point the government doesn’t get: if tourists are coming here because they’re enticed by tax-free shopping, they are spending in our shops, they’re staying in our hotels, they’re eating in our restaurants, they’re going to our live gigs,” Sadiq Khan added.
Paul Barnes, the chief executive of the Association of International Retail, told City A.M. last night that the reintroduction of tax-free shopping would “spark significant economic growth across London and the wider country.
“With tax-free shopping available on the Continent, we are already seeing international visitors moving away from London and instead spending in Paris and Milan,” he said.
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