It has been announced by Angela Rayner that Mayors in England are to be given the power to introduce an overnight visitor levy on tourists. This is the very last thing the UK’s already beleaguered tourist industry needs proving once again that hospitality is an ultra-low priority for successive governments of all colours. 

Local leaders will be allowed to bring an uncapped levy – “tourist tax” – as a percentage of the cost of hotels, bed and breakfasts and other types of accommodation rather than a flat fee. Hospitality leaders have already raised the alarm that “jobs are now at risk” because of the proposals. 

I flagged all this up and wrote a cautionary piece about the dangers of this tourist tax earlier this year for The Spectator during “English Tourism Week” – an ‘awareness week’ in the spring which kicked off with a jaunty reception in Downing Street for tourism leaders, with junior minister Stephanie Peacock talking up the industry with the usual ministerial jargon about jobs and growth. “Tourism is not a peripheral issue. It is a powerful driver of growth across every nation and region of the UK” she assured industry leaders. 

The trouble with the sheer number of these ‘awareness’ weeks/months  – which includes Plastic Free July, Veganuary and National Obesity Awareness Week – is that lobby groups have cottoned on that such often woke PR stunts are also a good opportunity to marshal campaign opposition, and be given a media platform. Tourist trade bodies have now turned up the volume of their joint industry anger towards the new tax, a measure which puts the knife into the Great British Staycation.

The reality is that UK’s tourism sector – supporting over 2 million jobs and £127 billion to the economy – is becoming a poster example of a sector whose government policies are increasingly anti-growth. A catalyst for industry ire has been the introduction of the Edinburgh Visitor Levy, from July, with the rest of the UK now set to be subjected to the unpopular ‘Tourism Tax’ which was included in the King’s Speech in May. 

Labour controlled mayoral cities as Greater Manchester, Liverpool and London can now add a 5% ‘overnight visitor levy’ on stays in the UK, for business travellers as well as domestic travel to see family. The tax will hit all hotels, pubs with accommodation, B&Bs, holiday lets and Airbnb locations in the devolved areas. 

Industry beating

For the government to celebrate ‘Tourism Week’ whilst at the same time administering a punishment beating that hits accommodation in major cities, as well as self-catering Airbnb owners, is counter-productive. The new holiday tax will hit business travellers as well as domestic travel to see family. The tax will affect all hotels, pubs with accommodation, B&Bs, holiday lets and Airbnb locations in the devolved areas. 

This punitive holiday tax at a time when the industry is already on its knees thanks to NI hikes, crippling business rates, a higher minimum wage, rocketing fuel and energy costs. The idea is to fund and improve local infrastructure – such as cleaner streets and more buses – but it’s unclear how the money will be ring fenced for tourism purposes. 

Those in the tourism trade – such as myself who, when not editing this paper runs a heritage and accommodation business in the West Midlands – regard it as a stealth tax with tourism used as a political football to appease Labour big city mayors who are desperate for funding and to make it look like the idea of ‘devolved powers’ is working. 

Pain relief

Tourism trade associations are still hoping to dilute the pain, calling for a hospitality VAT rate of 10%. Ben Spier, director of public affairs at the Association of Self-Caterers and head of regulation and policy at Forge Holidays told The Mace: ‘Tourism provides accessible, flexible and meritocratic jobs often in areas with few other economic drivers, perfect for lowering the welfare burden’. 

Another part of the problem is that ever since the success of the London Olympic Games tourism has been seen to be doing well enough on its own. But as historian and restauranteur Loyd Grossman warned when he was chair of the Heritage Alliance: “The Government might think we are doing OK despite the disproportionate cuts and a virulent fiscal policy. But laissez faire is not the answer. It takes positive measures by government to improve the operating environment so that the benefits of heritage – social, economic, educational and environmental – are realised by Government, communities and individuals.”