Labour’s new ‘tourist tax’ will price many Brits out of going on holiday, causing yet further pain for those already struggling with the rising cost of living. The Government’s new ‘Overnight Visitor Levy Bill’, announced in today’s King’s Speech, will allow English regional mayors to impose an extra charge on overnight stays. The surcharge is expected to be five per cent of accommodation costs and will fund local infrastructure and tourism.
Reactions to the Levy
Labour’s metropolitan mayors have praised the tax, with London Mayor Sadiq Khan calling it ‘great news for London’. However, Rachel Reeves' levy will only cause more misery for Brits already struggling with household finances, despite Labour claiming it is doing all it can to ease the cost of living. New polling reveals one in five Brits would choose not to book a holiday in England if it were introduced.
Shadow chancellor Sir Mel Stride commented after the King’s Speech, stating that the new family holiday tax will be ‘a blow for seaside towns and hit families in the pocket’. He confirmed that the Conservatives would oppose the tax when Labour brings it to Parliament in the next session. ‘At a time when every penny matters, my message to Rachel Reeves is clear: hands off our holidays,’ he said.
Reform’s Treasury spokesperson Robert Jenrick blasted the tax as a ‘death knell for many seaside resorts’ and confirmed that no Reform UK mayors would enforce the ‘terrible tax’.
Public Opinion and Impact
More than twice as many Brits oppose Labour’s holiday tax than support it, with those most affected by the rising cost of living being most against the measure. Nearly two-thirds of people who ‘struggle to make ends meet’ disagree with the tax, according to research from campaign group UKHospitality. The organisation said the tax could add more than £100 to the cost of a two-week break.
With Labour having suffered a significant defeat in the local elections, the research suggests voters could punish the Government further for introducing a tax on holidays. The polling reveals voters are nearly 10 times more likely to vote against an MP who backs the holiday tax than support them, threatening the Government’s majority in 200 seats and putting the political futures of Wes Streeting, Ed Miliband, Angela Rayner, Rachel Reeves, Yvette Cooper, Emma Reynolds, and Steve Reed at risk.
Industry Concerns
Allen Simpson, chief executive of UKHospitality, said: ‘This polling should be a wake-up call for every MP tempted to back the holiday tax. It is opposed by a majority of their constituents, it would deter millions from holidaying in England, and it would hit hardest the very families the Government says it wants to help. In her Spring Statement, the Chancellor said being able to pay for a holiday should never be too much to ask, but this tax puts a holiday out of reach for many.’
The levy is yet another blow to the hospitality industry, already suffering from ‘eye-watering’ tax rises under Labour. Kate Nicholls, Chair of UKHospitality, said the tax is ‘wrong policy at the worst possible time’. She explained: ‘Accommodation businesses are already battling enormous cost increases and declining confidence. Adding a new tax on to family holidays, business travel, and international tourism will strangle growth, reduce investment, and put jobs at risk.’
England is currently the only country among the G7 that blocks authorities from allowing tourist levies. It is thought a tourist levy in London alone could raise £240m a year, with Scotland and Wales already introducing taxes on overnight visitors.
