Burberry chairman Gerry Murphy accuses Rishi Sunak of making UK ‘least attractive’ place to shop in Europe
Prime Minister Rishi Sunak has been challenged by the chairman of Burberry over the scrapping of VAT refunds for tourists.
Gerry Murphy, who heads the luxury retailer, said the “spectacular own goal” had made Britain the “least attractive” shopping destination in Europe.
The conversation took place at a Business Connect conference, which saw around 200 high-profile chief executives given the opportunity to question the prime minister.
Mr Murphy began by describing Mr Sunak as “obviously more business-friendly than some predecessor administrations”.
Then he said: “It is somewhat perverse that on the day that we left the single market, a decision by, I think it was by you as chancellor, to remove the VAT refund for tourists made the UK the least attractive shopping destination in Europe.
“Leaving the EU has had a significant friction effect on trade, hopefully not forever… but it is the case it was a drag on growth.
“So we ask you to look at this specific one [VAT], this is a spectacular own goal, one that can be reversed by a decision from you or from the chancellor.”
Mr Murphy said the decision did not just affect the luxury industry but also travel, hotels, airlines and airports, adding: “We are actively exporting business as a result of that policy to our continental competitors”.
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Mr Sunak came to the London event hoping to patch up relations with the business community, after the challenges and problems of Brexit, coronavirus, and the leadership of Boris Johnson and then Liz Truss.
He had said earlier in the conference: “We want businesses small and large to know that this government has got your back.”
Answering Mr Murphy, he declined to discuss tax policy in an open forum but said there were “good reasons” for the VAT change.
He promised to look at the data to “see if things are panning out as we expected or not”, adding: “We take this very seriously, we are here to listen and engage.”
The boss of fashion brand Burberry called on the PM to make a policy U-turn (file image)
Labour’s shadow chief secretary to the treasury Pat McFadden said: “After 13 years, the pattern of Tory economic failure is grinding on.
“Families in Britain are being harder hit by price rises than many comparable economies.
“Other countries have had to cope with COVID and the consequences of the war in Ukraine, yet it is Tory Britain which sits at the top of the inflation growth league of major industrial economies.”
Business
Energy bills to rise again from January but spring falls to come, research firm Cornwall Insight forecasts
Energy bills are to rise again next year, according to a respected forecaster.
Costs from January to March are projected to rise another 1% to £1,736 a year for the average user, according to research firm Cornwall Insight.
The energy price cap, which sets a limit on how much companies can charge per unit of electricity, is also expected to rise, costing typical households an extra £19 a year.
It’s a further increase after energy costs rose 10% from October.
After the latest hike, there were hopes of a fall in the new year, but volatile wholesale gas and electricity markets are still above historic average costs.
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Prices have gone up due to supply concerns arising from Russia‘s war in Ukraine, and maintenance of Norwegian gas infrastructure.
But spring is expected to herald a reduction as is October 2025, Cornwall Insight said.
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‘Energy prices make me depressed’, pensioner Roy Roots said in August
Every three months energy regulator Ofgem revises the cap based on wholesale costs.
The official January price cap announcement will be made on Friday.
It comes as millions of pensioners lost their automatic winter fuel allowance payment after the government means-tested the benefit.
Meanwhile, Cornwall Insight’s principal consultant Dr Craig Lowrey warned “millions” of households won’t heat their homes to “recommended temperatures, risking serious health consequences” with bills on the rise.
“With it being widely accepted that high prices are here to stay, we need to see action,” he said, suggesting options like cheaper rates for low-income homes, benefit restructuring, or other targeted support for the vulnerable “must be seriously considered”.
The energy price cap system is being reviewed by Ofgem with possible changes to the standing charge coming over the next year.
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The long-lasting solution to high energy bills is the transition to UK-produced renewable power, the firm said.
“While there will be upfront costs, this shift is essential to building a sustainable and secure energy system for the future.”
The owners of Scotland’s only oil refinery have rejected a US-led approach about a possible bid for it months before its scheduled closure.
Sky News has learnt that a consortium said to be led by Robert McKee, an American energy industry veteran, wrote to Petroineos, the owner of the Grangemouth site, to express an interest in buying it.
The approach, which is understood to have been made earlier this month, was rejected by Petroineos, which is 50%-owned by the petrochemicals empire founded by the Manchester United FC shareholder Sir Jim Ratcliffe.
The consortium is understood to comprise The Canal Group, which is reportedly developing a green energy refinery in Texas, and Trading Stack, a Middle East-based commodities trader.
Mr McKee spent nearly four decades with ConocoPhillips, one of the biggest energy companies in the US.
Sources close to the situation said that Petroineos had rebuffed the offer in order to concentrate on a publicly announced plan to transform the century-old plant into a finished fuels import terminal.
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They added that the nature of the consortium’s approach had raised questions about its access to financing and expertise in operating an asset of this kind.
The Grangemouth refinery, which employs about 450 people, loses about £200m annually.
Its other shareholder is the state-backed Chinese energy giant PetroChina.
The site is due to close next year.
A person close to the consortium insisted that its financing was robust and said it would assess the feasibility of building a new refinery elsewhere in the area.
They added that the consortium had had “positive interactions” with trade union officials, and believed that there was scope to rapidly make Grangemouth’s refinery operations profitable.
On Monday, a spokesman for Petroineos said: “Since the Petroineos joint venture was formed 13 years ago, our shareholders have invested nearly £1bn in the refinery, only to absorb losses of £600m.
“Last week, the refinery lost £385,000 on average each day and we expect to lose more than £150m in total during the course of this year.
“We have not received any credible or viable bids for the refinery.”
A spokesman for the consortium declined to comment.
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