Highland MP Drew Hendry calls on Chancellor Jeremy Hunt to create VAT-free zones in city centres

The SNP’s economy spokesperson Drew Hendry is calling for the creation of VAT free streets across the UK to “revitalise struggling town and city centres” ahead of tomorrow’s spring statement by the Chancellor.

The Highland MP highlighted the critical situation facing high streets and local businesses, proposing a targeted reduction in VAT to create enterprise zones within town centres.

Reducing VAT, he argues, could even be used to establish VAT-free zones in the areas of most need and in identified sectors within them, encouraging investment and consumer spending.

But that would involve discussions with devolved governments and local authorities to tailor the support to each area's specific needs while Mr Hendry emphasises that any support would be contingent on certain conditions.

For example, businesses would have to commit to paying the real living wage, ensuring that the revitalisation of town and city centres also promotes fair employment practices.

Mr Hendry said: "The UK Government has offered substantial tax reliefs to big businesses including freeports but our town and city centres – the heart of our local communities – are left to face decline.

“Applying the same principle of tax incentives to our high streets can create vibrant, thriving centres for people.

“Just imagine how much benefit would be felt here in the city of Inverness and if implemented this initiative would support the efforts of local business organisations working to grow town centres across the Highlands such as Fort William and Nairn.”

He added: "This proposal for 'VAT Free Streets' is not just about economic revival but also about ensuring fairness and supporting the real living wage. In this budget, the Chancellor has the opportunity to demonstrate its commitment to retail and hospitality sectors.”

Mr Hendry warns that failure to act could accelerate the decline of city centres, resulting in long-term economic and social repercussions. By adopting this proposal, the Chancellor has a chance to deliver meaningful support to local economies, safeguarding the future of the UK's town and city centres.

Chancellor Jeremy Hunt is due to deliver his budget statement in the Commons at 12.30pm tomorrow.

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