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Badenoch accused of U-turn after she pledges to bring back tourism VAT refund scheme she scrapped when minister
Kemi Badenoch has pledged to bring back tax-free shopping for tourists by reversing a post-Brexit rule change, the Press Association reports. PA says:
The decision to scrap the VAT refund scheme for international visitors in 2021 left the UK “less competitive” than many other European destinations as the country left the EU, the Tories said.
Badenoch, who personally announced the abolition of the VAT refund scheme when she was a Treasury minister in 2020, said retailers were being “let down by a policy that is driving their customers away.”
Business chiefs including the bosses of Fortnum and Mason, Paul Smith and the operator of Claridge’s hotel hailed the policy change as “pro-growth” and “pro-jobs”.
Visitor numbers to the UK have returned to near pre-Covid levels, but real-terms spending remains 8% lower than before the pandemic, according to estimates from tourism agency VisitBritain based on data from 2024.
The Tories said returning the VAT refund would be partly offset by a proposed “crackdown” on so-called “health tourism”, including more consistent charging of patients ineligible for free treatment.
Tax-free shopping could also be extended to cover EU tourists subject to evidence, with the rollout complete by the end of the next Parliament, the party said.
Commenting on the announcement, a Labour spokesperson said:
The Tories have pulled off a spectacular U-turn. Kemi Badenoch used to say tax-free shopping was a costly giveaway and now she’s trying to sell it as an economic miracle.
If they really think it’s such a great idea, they should explain why they scrapped it in the first place and how they’d pay for bringing it back.
A Treasury spokesperson said:
The UK is one of the most-visited countries in the world with international tourism driving billions into our economy. We are supporting the continued growth of this industry and the government is working to meet our ambition to welcome 50 million international visitors a year to the UK by 2030.
Visitors can still claim VAT relief where the items purchased are shipped directly to their home country as exports.
Key events
Ed Davey has also claimed that Liberal Democrats are now a tax-cutting party.
Asked on the Today programme if that was an accurate way to describe the party, Davey replied:
Yes. Yesterday I talked about the need to have a temporary tax cut in fuel duty because people are paying a huge amount of the pumps, and we showed how we could pay for it. I’m showing through our growth strategy how we can pay for more tax cuts.
Davey said more proposed tax cuts would be announced in his speech tomorrow.
Davey says split on right in UK politics presents ‘historic opportunity’ for Lib Dems
Ed Davey has said the split on the right in UK politics gives the Liberal Democrats a “historic opportunity” to overtake the Conservatives.
In his interview on the Today programme this morning, Davey said:
I’m excited by the prospect of more Liberal Democrat MPs and building on the success we’ve had in recent years.
I think there’s a moral responsibility to stop the far right. I really take that very seriously. It wears heavily on my shoulders. We have to win to stop Mr Farage and stop Kemi Badenoch giving him the keys [to Downing Street].
But we also have a huge opportunity, a historic opportunity, because the right is split. The right is fragmented for the first time in parliamentary history.
I don’t think this is recognised enough. With them being split for the first time in 200 years of parliamentary election, that Liberal voice can not only be heard louder, but can come through and win many, many more seats.
Davey was referring to the way the Conservative party and Reform UK are essentially competing for the same voters and that without a pact – which both parties have rejected – the split could allow progressive parties to win in right-leaning seats at the next election.
Davey even claimed his party could beat the Tories at the next election. He said that developments in the Conservative party under Kemi Badenoch meant that liberal conservatives and pro-European conservatives were increasingly attracted to the Lib Dems and he went on:
And that’s why I think there’s a real chance we could end up with more MPs than the Conservatives after next election.
But when the presenter, Justin Webb, asked Davey if that meant, in his conference speech tomorrow, he would be telling his members to “go back to your constituencies and prepare for government”, Davey declined to say that he would copy the David Steel soundbite that became a much-mocked emblem of Liberal hubris. Laughing at the reference, Davey just said he would be talking about what the Lib Dems stand for.
Davey urges Burnham to ‘take a stand’ when PM meets Trump in New York tomorrow
Ed Davey has urged Andy Burnham to deliver some “home truths” to Donald Trump when they meet at the UN tomorrow.
Asked how Burnham should treat the US president, Davey told Sky News:
Take a stand, please. And the cosying up to him that was done by Keir Starmer absolutely failed miserably.
Davey praised Mark Carney, the Liberal Canadian PM for “standing up to Trump with success” and, referring to what he wanted to see from Burnham, he said:
You have to stand up to them. And this is a man who’s ruining our world. He’s ruining his own country, but he’s hitting people in our country.
His disastrous war in Iran is leading to the hike in oil and gas prices, which means people are paying more for petrol and diesel.
So if Andy Burnham is going to represent Britain’s interests and the interests of British people, he needs to tell Donald Trump some home truths, whether it’s on the economy and defence, whether it’s on Iran, whether it’s on NATO.
I’m afraid, under President Trump, we no longer have a reliable ally in the White House … You can’t trust this man. And I think, while he may want to choose his words slightly more diplomatically than I’m giving to you, he needs to stand up for Britain and British interests.
With Trump deeply unpopular in the UK, it is easy to see why Davey criticises him harshly. But prime ministers who have had to negotiate with Trump have tended to be more tactful and, in her preview of what is likely to happen when Burnham meets Trump tomorrow, Pippa Crerar, the Guardian’s political editor, says Burnham is not angling for a fight. She says:
Downing Street insiders expect Burnham to be a bit more forceful [than Keir Starmer was] when he feels there’s a need to stand up for British interests. But there is no suggestion he will follow the more combative approach of Mark Carney, the Canadian prime minister.
Instead, one source said he would probably take a “third way” between Starmer and Carney, pushing back more than his predecessor publicly and privately, but avoiding open diplomatic warfare. A second source said the prime minister had three ambitions for Tuesday’s talks: bond with Trump, make the case for Ukraine, and avoid any drama.
Ed Davey rejects claims party is ‘sleepwalking into irrelevance’ under his leadership
Good morning. Ed Davey became Lib Dem leader in 2020, which means he is technically the longest-serving leader of a national party in the UK. (“Technically” because, while Nigel Farage only became leader of Reform UK in his current incumbency in 2024, he had led it before when it was called the Brexit party and, if you include Ukip, he has been leader of the anti-migrant, anti-EU right in British politics for more than 20 years.) After six years in charge, it is inevitable that some Lib Dems are starting to complain and, with the Lib Dem conference taking place in Brighton, Davey has been giving interviews this morning where he has had to respond to complaints from his critics.
The most vocal has been Julian Brazil, the leader of Devon county council, who told the BBC yesterday that the Lib Dems were “sleepwalking into irrelevance” with Davey at the helm.
Not surprisingly, Davey does not agree.
Asked about Brazil’s comments, the Lib Dem leader told BBC Breakfast:
We’ve grown really fast in recent years under my leadership. Record number of MPs. We’re running more councils than the Conservatives – councils up and down the country.
[I’m] really proud of that record and it means when you have a bigger party, you can’t please everyone all the time.
And Davey was a bit more blunt when asked the same question on Sky News.
I would say to the Devon councillor, we’ve now got six Liberal Democrat MPs in Devon. That’s not happened since the 1920s.
We have a huge number of councillors across Devon and are leading the way in Devon, and I could go around the rest of the country.
I happen to know Brazil. We’ve rarely seen eye to eye. So, all I would say is, we’re going to build on the success we’ve had.
I will post more from Davey’s interviews shortly.
There is more coverage here of what was happening at the Lib Dem conference at the weekend.
Here is the agenda for the day.
9am: The Liberal Democrat conference proceedings resume in Brighton. The main speech this morning is from Max Wilkinson, the home affairs spokesperson, at 11,50am. Here is the agenda.
Morning: Kemi Badenoch is on a visit in the south of England.
11.30am: Downing Street holds a lobby briefing.
11.45am: Michael Marra carries out a visit in Dundee following his election as Scottish Labour leader at the weekend.
Late morning: Nigel Farage unveils the new Reform UK leader in Wales.
Evening: Andy Burnham leaves the UK for New York, where he is attending the UN general assembly and meeting Donald Trump tomorrow.
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