'Tourist tax' will damage our recovery, say hotels and shops

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The Government identified tourists as a way to raise money as it cut the Home Office budget by 23 per cent in the comprehensive spending review, saying: "An increasing proportion of the costs of controlling immigration and securing our border will be met by migrants and visitors to the UK."

A short visa for non-EU visitors already costs £70.

Sandie Dawe, chief executive of tourism organisation VisitBritain, said: "Our visas are already more expensive than those of European competitors. Countries affected include Russia, India, China and the United Arab Emirates, which are key markets."

Many retailers say their recovery from the recession has been due largely to the weak pound causing a surge in international shoppers.

Burberry reported this month that its sales had jumped 21 per cent, driven by buyers from China, the Middle East and the Continent.

Jace Tyrrell of the New West End Company, which represents 600 retailers, said: "International visitors bring in £2billion a year to West End firms.

"The Home Office should not look at increasing the costs of a visa, in fact they need to look at equalising the fees and making sure they are comparable to the rest of Europe."