Andy Burnham is set to hand England’s mayors the power to introduce an uncapped tourist tax in a move that has been criticised by hospitality leaders, reports BritPanorama.
Local leaders will be allowed to set a levy on a percentage of the cost of accommodation to overnight visitors—a departure from a flat fee—which the government believes will protect budget holidays.
Government sources have insisted that mayors are unlikely to make the tax too high in order to safeguard local tourism industries, but the absence of an upper limit has raised concerns among stakeholders.
The head of the hospitality trade body warned that the plans could jeopardise jobs in some communities, noting that a similar tourism tax in Edinburgh is “already having damaging effects.”
UK Hospitality has urged Mr Burnham to consider proposals for a “holiday bonus” instead, given the ongoing cost of living challenges facing households.
Allen Simpson, chief executive of UK Hospitality, told BBC Radio 4’s Today programme that holidays in the UK are “already more expensive” due to higher VAT levels before accounting for a 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 cautioned.
He added that residents in communities reliant on tourism could face job losses, stating, “I would say to those people in these communities that their jobs are now at risk.”
He highlighted potential negative impacts, mentioning that holiday parks may struggle to operate outside of peak seasons and that tourists would have less disposable income.
Plans for the tax were initially announced under Sir Keir Starmer, following similar measures enacted by the devolved governments in Scotland and Wales.
Similar charges exist across Europe, with revenues returned to fund local services. Mayors would have the discretion to determine how the revenue generated from the levy is reinvested.
Housing, Communities and Local Government Secretary Angela Rayner is scheduled to meet with mayors at No 10 North before further policy details are revealed on Thursday.
A government source remarked, “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.”
