Rishi Sunak squirms under questioning by former culture minister who says his refusal to scrap the tourist tax is harming the economy

Rishi Sunak was yesterday made to squirm by a former culture minister who warned his refusal to scrap the tourist tax was harming the economy.

Dame Caroline Dinenage said the removal of tax-free shopping for overseas tourists was hurting the hospitality, retail and cultural sectors.

The Conservative MP urged the Prime Minister to look again at the knock-on impacts of the tourist tax.

She also lambasted the Government’s failure to take advantage of a key ‘Brexit freedom’.

Dame Caroline, who chairs the Commons Culture, Media and Sport Committee, mauled Mr Sunak as he appeared before the Liaison Committee yesterday.

She said: ‘The Association of International Retail told my committee that the absence of tax-free shopping for overseas visitors means the UK economy could be missing out on as much as £12billion in lost spending. Should the Chancellor look at this again?’

Mr Sunak said there were ‘a range of different views about that policy’.

But Dame Caroline responded: ‘Don’t you think more work needs to be done? It’s not only retailers who are affected, it’s whether tourists come and how long they stay.

Mr Sunak said that Chancellor Jeremy Hunt was already ‘open to getting people’s submissions, thoughts, research and evidence’.

Dame Caroline said: ‘But since we left the EU, it’s less attractive for overseas shoppers, it’s more complex for overseas workers in tourism and hospitality, it’s more challenging for overseas school groups to bring tourists over here.

‘I don’t remember one of the selling points of Brexit freedoms meaning that it would make our tourism industry less competitive, do you?’

The Mail’s Scrap The Tourist Tax campaign, which has won cross-party support and the backing of hundreds of high street giants, was launched in support of the calls for the Government to think again.