The decision to scrap tax-free shopping for foreign visitors has left Britain floundering behind its European rivals, the boss of Marks & Spencer warned yesterday.

Stuart Machin said the reimposition of VAT at 20 per cent for overseas shoppers meant London was being held back and left 'on life support'.

This week the Daily Mail launched a Scrap The Tourist Tax campaign in support of retailers, urging the Government to rethink its decision not to reverse the measure introduced in 2021 under post-Brexit rules.

Businesses including Harrods, Heathrow Airport and Burberry have joined former prime minister Liz Truss and former chancellor Sajid Javid in their opposition. 

Harrods chief executive Michael Ward warned that the tax system means the 174-year-old department store is having as to 'run three times as fast' to entice Chinese shoppers to return to the UK – rather than Paris or Milan – after Beijing's easing of Covid curbs.

Mr Machin, chief executive of M&S, said a decision to scrap the tax incentive was adding to problems turning the capital's main shopping area into an embarrassment. 

In a letter published in London's Evening Standard newspaper yesterday, he said: 'The scrapping of tax-free shopping for international visitors only holds London back further.'

He warned that other top cities across the world were beginning to 'thrive again' after the pandemic, but London risked 'falling way behind'.

'It pains me to see our great city like this. For too long now it has been on life support,' he added. Mr Machin also expressed his frustration that Oxford Street – where M&S has its flagship store – was becoming a 'national embarrassment'.

He pointed to a slew of unseemly American-style candy stores and said footfall was still considerably below pre-pandemic levels in the former 'jewel of London's crown'.

London's retail hotspots have been hammered by a combination of the economic effects of the pandemic and the soaring energy costs resulting from Russia's invasion of Ukraine.

Mr Machin warned: 'The economic turbulence of recent years has had a decimating impact on London's retailers, with hundreds of empty buildings and shuttered shops.'

He pointed out that 17 buildings were listed for demolition across Westminster, including four on Oxford Street alone.

M&S is hoping to demolish the current Art Deco store and build one that would 'revitalise the whole area, making it better for our colleagues, customers and the community, and breathing life back into Oxford Street', he said.

Heritage campaigners have protested, saying the building is historically and culturally significant.

Mr Machin implored Levelling-Up Secretary Michael Gove to allow M&S to go ahead. 

'There's no national levelling-up without a healthy, thriving capital city, and Oxford Street needs this lifeline,' he said.