Burnham urged to axe tourist tax expansion in devolution drive
A leading hospitality trade body has urged Andy Burnham to drop plans to expand the so-called “tourist tax” across the country as part of his devolution drive.
UK Hospitality (UKH) has written a letter to the Prime Minister, seen by City PM, warning that the government’s overnight visitor levy would cost 33,000 jobs in the country’s tourism sector.
“It’s clear the government is now intending to implement a nationwide holiday tax, making family holidays more expensive during a cost-of-living crisis,” UKH chief executive Allen Simpson told Burnham. “I am pro-devolution, but I am not in favour of an extra tax that will cost 33,000 jobs.”
The levy was first proposed under Keir Starmer’s government and planned to hand regional mayors the power to impose a tax on tourists, charged on overnight accommodation.
The tax has been opposed by Premier Inn owner Whitbread, pub chain Greene King and seaside resort Butlins.
Burnham to expand tourist tax
Burnham’s “Rewiring the State” devolution blitz, set out last week, paved the way for tourist tax powers to be handed to every strategic authority in the UK.
The government plans for the revenue from this tourist tax, and a portion of local income tax receipts, to be used to fund local infrastructure projects.
“Local leaders know what it will take to drive growth in their areas, creating jobs and attracting investment that speak to the strengths of their region,” the government said.
But UK Hospitality, which represents 130,000 British pubs, restaurants and hotels, has warned that the “politically toxic” tourist levy would hit holidaymakers with more than £1bn in tax.
Simpson has urged Burnham to ditch the tax and instead set up a “holiday bonus,” which would return a proportion of tax revenues to local regions based on the number of tourists they attract.
This would work similarly to the Prime Minister’s plan to return a chunk of income tax receipts to local authorities, to be spent on transport and community projects, UKH said.
Simpson told Burnham: “Under your leadership, hospitality can be included within the wider strategy of devolving revenues rather than creating new taxes.
“With this proposal, mayors would be able to spend the funding on their regional priorities, but there would be a clear incentive to improve the local environment to encourage more overnight stays.”
Tourist tax could threaten jobs, MPs warn
Last week, a group of backbench MPs warned Burnham that the tourist tax could reduce tourism spending and threaten investment and employment in the UK’s hospitality sector.
The All-Party Parliamentary Group for hospitality and tourism called on the government to commit to a full review of the policy and meaningful engagement with hospitality leaders before pushing ahead with the tax.
Chris Webb MP, chair of the backbench group, said: “This report makes clear the concerns that exist across the tourism and hospitality sectors about the potential impact of a visitor levy.
“If the Government chooses to proceed with the levy, it must be designed with fairness, consistency and genuine engagement with the industry.”