ALEX BRUMMER: These well-heeled consumers are vital after Covid battering 

Corporate executives rarely fire fusillades at the government. But if they fear their business is in jeopardy, they are not left behind. The bosses of Harrods and luxury leather group Mulberry have boldly gone on the offensive against Rishi Sunak and Jeremy Hunt for revoking duty-free shopping for overseas visitors to Britain.

The decision dealt a severe blow to high-end stores across Britain. Mulberry’s denunciation was echoed more politely by bosses in Oxfordshire’s Bicester Village, home to prestigious brands and a honey pot for tourists.

Instead of seizing the Brexit opportunity to scrap heavy taxes and better compete with the luxury retail empires in Paris and Milan, our government has done immeasurable damage to the flood of affluent shoppers from the Middle East, Far East and the US. The richest consumers in the world are already moving to other European centers.

As well as beating up Central Britain by freezing duty-free bands until 2028, Hunt’s Autumn Statement dealt a sledgehammer blow to this country’s entrepreneurship and reputation as a great place to shop and stay.

Mulberry revealed that the decision to withdraw the ability for foreigners to reclaim 20 percent VAT on purchases made here has led to a 45 to 50 percent drop in the number of foreigners using its stores.

Other luxury brands such as Burberry, Fortnum & Mason and Harvey Nichols are also concerned. Some advertise special ‘duty-free’ shopping (by absorbing the VAT costs themselves) to try to maintain foreign trade.

Independent forecasters Oxford Economics estimate that duty-free shopping would attract an additional 1.6 million foreign visitors a year, adding to HM Treasury’s coffers with everything else they spend.

Britain is the only G7 country to levy taxes at a time of approaching recession and when interest rates are rising – no doubt a recipe for a deeper recession and stunting economic growth.

For its part, the Treasury claims that reinstating VAT on foreign customer purchases will generate an additional £2 billion a year.

But this is deliberately ignoring warnings that their move will result in lost tax revenue as the luxury goods industry’s profits run out, the country’s top hotels become vacant and fewer seats are sold in theaters and restaurants.

How different it is in France, where the luxury goods company LVMH has been encouraged to become the highest-rated company in Europe.

Britain is the only G7 country to levy taxes at a time of looming recession and when interest rates are rising – undoubtedly a recipe for a deeper recession and stunting economic growth

Here our government is obstructing opportunities for UK companies to build on their creativity and flair to nurture leading global brands. But visitors to Paris enjoy a tax break on purchases, with an immediate VAT refund when they present receipts at the departure desks at the airport, port or train station.

The Tories have traditionally been the party of enterprise, effort and aspiration. But as they become increasingly disdainful of free-market capitalism, they are in danger of getting no better than Labour, which never sees a tax it dislikes, nor misses an opportunity to wage a class war against fighters.

The truth is that encouraging foreign visitors to spend more here would improve Britain’s balance of payments and boost confidence in British pounds.

This is vital at a time when high streets and shopping centers have been battered by Covid and by rising energy bills, leaving even upmarket London shopping areas like Knightsbridge littered with vacant properties to let.

Discouraging wealthy foreign visitors will only add to the misery.