Andy Burnham in row with hospitality sector
Good morning. Last year Andy Burnham, then mayor of Greater Manchester, and his close ally Steve Rotheram, mayor of the Liverpool city region, urged the government to allow English mayors to introduce a visitor levy.
Burnham and Rotheram met little resistance. In May, Keir Starmer included plans for an overnight visitor levy in the King’s Speech.
Scotland and Wales already operate their own versions of this levy.
Burnham’s government is now set to announce further details. The Daily Telegraph has the story.
In May, the government was vague about whether the levy would carry a cap. According to the Telegraph’s Szu Ping Chan, Harry Brennan and Eir Nolsøe, the plans now being unveiled are more extensive than the hospitality industry anticipated:
Officials stunned the hospitality industry late on Wednesday by announcing that English mayors and other local leaders will be able to impose an uncapped “overnight visitor levy” on anyone staying in hotels, holiday lets and bed and breakfasts.
Bosses had been led to believe the levy would be capped, as in Wales. England will now follow the Scottish model, where there is technically no upper limit.
Andrew Griffith, shadow chancellor, told the paper: “An unlimited tourist tax would be hugely limiting for the chances of the young people who might otherwise be employed in tourism and hospitality.”
This morning Allen Simpson, chief executive of UK Hospitality, claimed the proposal would cost thousands of jobs. Speaking on the Today programme:
What we’re talking about here is an open-ended power for mayors to set tourism taxes at any level they want.
Remember, if you go to Paris, Rome or Berlin, you’re paying a small tourism tax, but it’s capped. This one isn’t. And VAT is only 10%.
So even before England introduces this new tax, the tax on a holiday in the UK is already more expensive than our peers.
When asked whether mayors would be obliged to introduce the tax, Simpson acknowledged they would not. But he added:
We know that local government is struggling for funds. It was hit very hard by austerity. And if you only devolve one tax-raising power, of course local mayors are going to pull that lever till it snaps.
If it’s a 5% tax, which is entirely possible, that’s what it is in Edinburgh – but lower than Aberdeen – the economic analysis suggests 33,000 jobs will go.
Simpson said UK Hospitality could arrive at a specific figure because the sector can measure precisely what impact price has on demand. He also claimed taxes on hospitality were already very high:
For anyone taking a holiday in the UK, it’s going to cost an average of about £100 to £120 more on a family holiday – more than double the benefit from the energy VAT cut earlier this year. So it is not going to be painless.
The government has responded to concerns by stressing that mayors will decide whether to use these powers. A government source 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.
9.30am: NHS England publishes monthly hospital performance figures.
9.30am: Actor Michael Sheen gives evidence to the Commons Welsh affairs committee on contaminated land, a topic he investigated for a highly praised documentary.
Morning: Angela Rayner, communities secretary, chairs a meeting with regional mayors from No 10 North to discuss tourism tax plans. Later Lucy Powell, education secretary, hosts a summit on making England a “technical education superpower”.
11.30am: Downing Street holds a lobby briefing.
After 11.30am: Wes Streeting, defence secretary, due to make a statement to MPs about Ukraine and the threat from Russia.
