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Good morning from William Cash, the Mace Editor-in-chief
The Great British Summer Swindle
Ever get the feeling you’re being cheated?
“Great British Summer Savings” is the government’s Bank Holiday weekend marketing slogan. With a heatwave upon us and ice cream vans doing record business, it looks like Rachel Reeves is giving not only the British public but also the UK’s beleaguered tourism and hospitality industry a much needed mini-break by reducing VAT to 5% on summer attractions.
But the reality is that, welcome as saving a few pounds will be to British families holidaying at home this summer, or just enjoying a day out, it does little than offer some temporary bandage aid to the tourism industry.
The truth is that – putting the 5% temporary VAT break aside – the UK’s tourism industry is about to get hit with a triple-whammy of hiked and targeted taxes. The King’s Speech included new legislation for the deeply unpopular “holiday tax”, otherwise known as the Overnight Visitor Levy.
This year’s “English Tourism Week” in March was overshadowed by proposed legislation for this so-called tourism tax. It will allow authorities in such Labour-controlled mayoral cities as Manchester, Liverpool and London to add a 5% “visitor levy” on stays in the UK. So any savings from reducing VAT on, say, visits to a theme park, will be offset by this new overnight levy.
This punitive tax comes off the back of Edinburgh City Council starting to impose the Edinburgh visitor levy, from 24 July, with the rest of the UK set to follow. Most absurdly, even caravan owners who attend the Edinburgh Festival in August will be subject to the overnight levy. That’s paying to stay in their own caravan.
The reality is that the UK’s tourism sector – supporting over 2 million jobs and generating £127 billion – is becoming a poster example of a sector whose government policies are increasingly anti-growth.
As reported by the Telegraph, Labour is eyeing up a £1bn tax grab on family holidays just as Rachel Reeves has revealed her “Great British Summer Savings” VAT reduction. Only when you look into how – at the same time – HMRC is drawing up plans to impose VAT of 20% on top of the air passenger duty fees that airports charge airlines, you quickly realise that holidaying is not going to get cheaper any time soon. It could add as much as a £1 billion to airline fees for flying from Heathrow.
Airport and runway fees are usually passed on to holidaying families, which only means higher holiday and flight costs. Airline and tourism industry bodies have said the Labour plan amounted to a “stealth tax” at a time when holidays are already unaffordable for many.
Worse, this Bank Holiday, it is also reported that the government already have plans to increase the scope of the overnight levy to hit a much wider range of holiday-spots across the country. An investigation by the paper found that some 10 of England’s 14 regional mayors are thinking of imposing “overnight visitor levies” which will add hundreds of pounds to a a family staycation holiday.
What was meant to be a “city tax” targeting metropolitan tourist centres such as Manchester and Edinburgh is now likely to hit families going to such famous tourist spots as Whitby in Yorkshire, the North Norfolk coast, the Peak District, the West Country, the West Midlands, and Bamburgh Castle in Northumberland. Mayors and local council leaders are planning to use the new legislation to impose holiday taxes to prop up the sclerotic finances of their near bankrupt councils.
All these the holiday taxes add up to what looks more like the Great British Summer Swindle. The holiday tax will also 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.
While Labour and the Lib Dems support the holiday tax, both the Tories and Reform are against it, thus turning the already loathed tax into a politically divisive issue. Back in May, Robert Jenrick, Reform’s “shadow chancellor”, used the first May Bank Holiday to launch a strongly-worded assault on the tourism tax policy, saying, “There appears to be nothing that Labour won’t tax. This will be the death knell for many seaside resorts and will stop up to one in five Brits holidaying in England.”
“No Reform UK mayors will enforce this terrible tax,” he promised. “We want people to be able to have fun and enjoy themselves without being clobbered by the taxman. This latest ploy from Labour shows they have completely given up on serving hard-pressed people.”
Trade bodies fear that the tax will only further cripple the marginalised UK tourism sector at a time when it is already over-taxed, reeling from an increased minimum wage, national insurance, hikes in business rates and other inflated utilities costs.
During Tourism Week, I attended a reception in the House of Commons hosted by the Tourism Alliance during which Labour’s tourism minister, Stephanie Peacock, made some generalised platitudes about the importance of the tourism sector to the economy. We heard the usual ministerial jargon about jobs and growth. “Tourism is not a peripheral issue,” she likes to tell the industry. “It is a powerful driver of growth across every nation and region of the UK.”
Right. Yet for the government to back a raft of punitive holiday taxes at a time when the industry is already on its knees is counter-productive. Tourist trade bodies are turning up the volume of dissent. As somebody who runs a Shropshire holiday tourism business (uptoncressetthall.co.uk), this all feels like a stealth tax which will close down a record numbers of B&B’s, pubs and tourism businesses.
Wigan worriers
When George Orwell was working on The Road to Wigan Pier, his brilliant, Zola-like survey of poverty in industrialised England in the 1930s, he went down a mine in Bryn, a village between the towns of Wigan and Ashton-in-Makerfield on the South Lancashire coalfield. This is exactly where Andy Burnham began his by-election campaign to try and seize the Labour crown.
As novelist Simon Caldwell writes for us, the experience left Orwell marvelling at how tough the miners were. He describes them as “splendid men”, saying their job would be as much beyond “my power as it would be to perform on the flying trapeze or to win the Grand National.”
Today, both Bryn and the tripe shop where Orwell lodged during his sojourn are found in the Makerfield constituency that Andy Burnham will contest for Labour on 18 June in a by-election that is widely being seen as the most important of modern political times. If Burnham can defeat Farage in the north-west, it will upturn the political tables as well as most likely remove Sir Keir Starmer as prime minister as Labour cling to some hope that their Red Wall can be saved.
Caldwell lives in the Wigan area and writes acclaimed novels set in the working-class neighbourhoods that once made Makerfield a safe seat for socialists for more than a century, gave incumbent Labour MPs a job for life, and formed a solid rampart of the Red Wall.
As Caldwell reports, with his novelist’s eye for detail and a telling phrase, there is now such animosity toward Labour in their former heartlands that the Labour club in Bryn, close to the pit that Orwell visited, changed its name recently to the “community club” to reflect the reality that the vast majority of its members have bitterly rejected the party of their forefathers in favour of Reform or Restore, who were the first to announce their candidate. Restore could very easily tear a flank or two off Reform’s right-wing voter base and help Burnham win.
But despite Restore dividing the working-class vote, Labour may well be in trouble if “Wigan Man” emerges as the new median voter whom mainstream parties must attract to win the next election – in the same way that Essex Man mattered crucially to Margaret Thatcher and Mondeo Man to Tony Blair.
Caldwell’s report for The Mace narrows down why Wigan Man or Wigan Woman might be the median voter that decides not only the next prime minister but also the next election. As he argues, if Wigan Man and Woman are here to stay, they will become the median voter whom all parties must appease if they wish to take power three years from now. Read his essay here.
There’s the Raab
Former deputy prime minister, the Rt Hon Dominic Raab, has joined Kreab London as a senior adviser. He is the latest deputy PM to join a public affairs firm following Damian Green, former deputy prime minister and secretary of state for work and pensions, who joined Bridgehead Communications as a senior adviser, and Nick Clegg who was vice-president for global affairs and communications at Meta (formerly Facebook) before joining the strategic advisory firm Hakluyt & Company.
In a statement, Kreab London said that Raab will be advising clients on defence and intelligence-related issues, including domestic politics, public policy and international geopolitics. His previous roles in the UK government, in addition to deputy prime minister, include foreign secretary, secretary of state for justice, and lord chancellor.
Raab said: “This is a time of fast moving and complex change across domestic politics, public policy and international geopolitics. I greatly look forward to advising Kreab clients and helping them navigate through this evolving landscape.”
We have featured Raab in our “The Strategist” profile slot this week. Like George Osborne, the former foreign secretary now has a glittering portfolio of jobs, thanks to his experience and contacts at the heart of government and international affairs.
His appointment reminds us how lucrative the world of lobbying has become for former MPs and senior ministers, as well as how much of a revolving door exists between former ministers who have transitioned into public affairs and strategic communications agencies over the past three years to advise clients on government engagement and political risk.
These include Jonathan Ashworth, former shadow secretary of state for health and social care, who joined Weber Shandwick as UK chairman of public affairs; Michael Dugher, former shadow secretary of state for culture, media and sport, appointed as head of the UK public affairs practice at Brunswick Group; and Anne-Marie Trevelyan, former cabinet minister who joined Fullbrook Strategies as a strategic global projects.
Raab’s role at Kreab London will expand his current job portfolio which already includes being head of global affairs at Appian Capital Advisory, special envoy to the World Gold Council on artisanal and small-scale mining, and as a distinguished fellow at the Royal United Services Institute. His entry in the lobbying register will be an intriguing read.
Last year, Prospect magazine published an investigative report into the merry-go-round of top jobs in public affairs handed out to former ministers and special advisers. Their conclusion about the “next careers” of former ministers and spads found that a notable number now work in lobbying or with firms connected to their former briefs, which “raised important questions about the system for regulating business appointments”.
Prospect’s research, published last August, revealed that 35 former ministers and spads worked for registered lobbying companies since 2023, and a further nine with firms that advertise public affairs or political and regulatory consultancy services.
“A major refuge for departed politicians is Global Counsel” declared the report, noting the firm co-founded by Peter Mandelson provides “geopolitical, policy, risk assessment and regulatory advice to companies, investors and states”.
Alas, Global Counsel is no more, having sunk almost overnight, and with hundreds of thousands of pounds of debt, as a result of the toxic ties between Mandelson and Jeffrey Epstein. The demise of Global Counsel – as with Bell Pottinger – reminds one that not only can political careers end overnight with a sacking or scandal. But that big public affairs global battleships can also be brought down just as quickly. On reflection, maybe Dominic Raab is wise to have at least four other jobs to keep him busy.
William.cash@macemagazine.com
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