Ministers are laying out plans for a ‘tourist tax’ in England today amid fears it could fuel a jobs bloodbath.
Mayors and other local leaders will get powers to impose charges on accommodation in Labour’s latest move to raise revenues.
Previously a flat fee had been mooted – but it now looks set to be a percentage of the cost of overnight stays, with no upper limit.
That could add hundreds of pounds to the costs of holidays, with businesses warning tens of thousands of roles in hospitality are at risk.
Angela Rayner will give more details of the proposals at a meeting with Mayors in ‘No10 North’ later.
Plans for the tax were first announced under Keir Starmer, following similar schemes introduced by the devolved governments in Scotland and Wales.
Plans for a ‘tourist tax’ appear to have been ramped up by Andy Burnham, who was previously Manchester mayor
Counties like Cornwall attract huge numbers of tourists who could potentially face charges
Angela Rayner will give more details of the proposals at a meeting with Mayors in ‘No10 North’ later
But they appear to have been ramped up by Andy Burnham, who was previously Manchester mayor.
Charges of a similar nature already exist across Europe, with the revenue used to fund local services. Mayors would decide how to invest the money raised from the levy.
Mr Burnham introduced a City Visitor Charge in Manchester in April 2023, at £1 per room per night.
There are estimates that a 3 per cent levy floated by Lord Khan in London could raise £350million a year.
But Tory Tees Valley mayor Lord Houchen has flatly rejected the idea of a tourist tax.
Groups representing the tourism trade have warned about the impact of the levy and called for consistency in how the tax operates across different regions.
Allen Simpson, chief executive of UK Hospitality, told BBC Radio 4’s Today programme a new tourism tax in Edinburgh is ‘already having damaging effects’
He said holidays in the UK are ‘already more expensive’ than they appear because of higher VAT, even before the tourist tax.
‘What we’re talking about here is an open-ended power for mayors to set tourism taxes at any level they want,’ Mr Simpson said.
‘And remember that if you go to Paris, if you go to Rome, if you go to Berlin, you’re paying a small tourism tax, but it’s capped.’
He said people in communities which rely on tourism and hospitality would see jobs at risk.
There are estimates that a 3 per cent levy floated by Lord Khan in London could raise £350million a year
Lord Khan has welcomed proposals for a levy in the capital
‘I would say to those people in these communities that their jobs are now at risk,’ Mr Simpson said.
‘It will be the case that you’ll have holiday parks which can’t open in the shoulder seasons and of course people who go on holiday will just have that little bit less money in their pocket.’
A Government source insisted mayors were unlikely to make it too costly in order to protect the local tourism industry, with most indicating it would be a few per cent.
They said: ‘We have always been clear that while central government will set the framework for this power, it will be up to local leaders and local voters to decide what is right for their area.’
