High-end jeweller Kiki McDonough was forced to cut prices by 20% this summer. The reason? To counteract the loss of tourist-related tax-free shopping in the UK and in order to tempt her overseas customers to buy her goods.

And now McDonough is calling for its reinstatement next month when  the new government’s chancellor Rachel Reeves delivers her autumn budget.

McDonough told The Telegraph newspaper: “I don’t think it’s something that’s high on [the government’s] agenda, but it should be if [they] want growth in the economy.”

She added: “Luxury is not seen as important in this country, and it’s so wrong, because it’s what attracts so many people to this country. They all think it was about Bond Street, but it has a massive knock on effect. 

“You can go to Bond Street and buy yourself a handbag, but then you might go to Edinburgh and see your friends, you’ll use transport, you’ll use cafes, bars, restaurants, come to London and go to the theatre – it sounds rather odd that that might stop because you couldn’t buy a handbag, but that is part of the treat of going somewhere.”

Explaining on the price cuts, she added: “We used to get a lot of Americans in summer. America is my second biggest market, and [there has been] definitely less people. It’s amazing how many people were then brought back [with the discount].”

McDonough founded her business in the 1980s and is now one of Britain’s most successful high-end jewellers. She currently runs the business from a boutique on London’s Sloane Square and sells her pieces, that can cost several thousand pounds, to customers all over the world.

She also argues that the government should reduce the burden of red tape to make it easier for younger people to start and grow businesses.

“I think the young are still pretty fearless. What I think the government could do is create more of an atmosphere in the country, which is ‘come on, everyone, fly by the seat of your pants, we’re behind you’.”