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Sunak’s silence on tax breaks for tourists is riling businesses

 (ES Composte)
(ES Composte)

ONE of Rishi Sunak’s pet phrases is that he is“listening”. He said it repeatedly at his Business Connect event last month, billed as the Tories’ re-engagement with business leaders after the dismal Boris Johnson era. The suits, though, aregetting rather tired of Sunak’s smile and earnest nodding and assurances. What is the point of saying you’re listening, then doing nothing?

At the gathering of corporate chiefs, Gerry Murphy, chairman of Burberry, said the Government had scored a “spectacular own goal” by scrapping tax breaks for tourists. There’s no question that Murphy is right. It’s obvious to anyone visiting the designer boutiques and department stores of the West End or the luxury shops at the airports that they’re unnaturally quiet. Travellers who would normally be spending their money are choosing not to do so, saving it for a more tax-friendly destination. This newspaper has long argued it is a nonsense.

It should be, as the City of London Corporation says today, a no-brainer, to reverse the policy. It does not raise much and Sunak says he has heard. Yet it remains.

Why? Because he is stubborn and does not want to admit to a mistake, and possibly he wants to be seen to change, if he does decide to do so, at a moment of his choosing.

The tax, though, has become symbolic of something deeper and wider — it shows that the Conservatives, traditionally the party of business, no longer is. Mr Sunak, hear this, business is fed up with being taken for fools. This is the time of year when thoughts turn to the party conference season in the autumn. Labour, for the first time in a long while, is reporting having to find extra space in its conference centre for businesses wishing to attend.

The private sector and Labour will never be soul-mates. How can they be when the party remains in the thrall of the trade unions and the hard-Left still lingers. But at least there is no illusion as to where each side stands. During the Tony Blair years, too, Labour did reveal it could do more than listen. Similarly, with Sir Keir Starmer, there is hope of greater accommodation.

Where the Tories are concerned, there is dismay and anger. This was the party of business that totally ignored the views of business and led the country out of the EU. Worse, in the views of many in commerce, leading Conservatives, including ministers, continue to insist that Brexit is working.

Rather like the tourist tax, the evidence is there for all to see. There is no Brexit dividend, but they insist there is. Asked to define it, they can’t. The result is demeaning and insulting. Not only was business not heard, but salt has been rubbed into the wound.

They ask themselves, why did they make donations, why did they pay through the nose for exhibition stands at the party conference, why did they wine and dine senior party figures, why did they employ lobbying firms, why did they agree to put their names and lend resources to various do-gooding government initiatives, why did they turn up to Downing Street breakfasts and receptions? What was it all for?

The frustration extends across all sectors. Take property. Housebuilders were promised higher governmental targets, councils were required to apportion parcels of land for development, planning would be relaxed. Then backbenchers, fearful of upsetting their constituents and being voted out, ran up the flag of nimbyism. Localism took hold, and the national drive was lost.

In construction, projects are mooted, only to be canned. Firms are blamed for decades of neglect when the utilities and transport were in state ownership. Among their fiercest critics are members of the very same government that professes to be the friend of business. It’s not gone unnoticed that ministers are quick to condemn but not so fast when it comes to showing real, meaningful support.

In the Square Mile, the mood is flat. There’s no sense of being loved or promoted, not by this administration, a blue one at that.

Sunak says he is listening. But increasingly, from captains of industry that sound he can hear…is silence.