Andy Burnham is set to hand England’s mayors the power to introduce an uncapped tourist tax in a move that has been criticised by hospitality leaders.
Local leaders will be allowed to set a levy on a percentage of the cost of accommodation to overnight visitors – rather than a flat fee – in what the government believes will protect budget holidays.
Government sources have insisted mayors are unlikely to make the tax too high in order to protect local tourism industries, but the levy’s lack of an upper limit has sparked concern.
The boss of the hospitality trade body warned the plans will put jobs at risk in some communities, saying that a new tourism tax in Edinburgh is “already having damaging effects”.
UK Hospitality has written to Mr Burnham urging him to consider plans for a “holiday bonus” instead, as households continue to struggle with the cost of living.
Allen Simpson, chief executive of UK Hospitality, told BBC Radio 4’s Today programme holidays in the UK are “already more expensive” than they appear because of higher VAT, before a tourist tax is introduced.
“What we’re talking about here is an open-ended power for mayors to set tourism taxes at any level they want,” Mr Simpson said.
“And remember that if you go to Paris, if you go to Rome, if you go to Berlin, you’re paying a small tourism tax, but it’s capped.”
He said people in communities which rely on tourism and hospitality would see jobs at risk.
“I would say to those people in these communities that their jobs are now at risk,” Mr Simpson said.
“It will be the case that you’ll have holiday parks which can’t open in the shoulder seasons and of course people who go on holiday will just have that little bit less money in their pocket.”
Plans for the tax were first announced under Sir Keir Starmer, following similar schemes introduced by the devolved governments in Scotland and Wales.
Charges of a similar nature already exist across Europe, with the revenue used to fund local services. Mayors would decide how to invest the money raised from the levy.
Housing, Communities and Local Government Secretary Angela Rayner will meet with mayors in No 10 North before further details of the policy are announced on Thursday.
Tory leader Kemi Badenoch criticised the plan, and said no Labour or Conservative councils should introduce the tax.
“I don’t want to see a tourism tax. Not in a conservative council, not in a Labour council,” she told Sky News.
“This is not what we do. We are just taxing and taxing. The government has run out of ideas. There’s no imagination.
“It is time for us to cut costs, get growth. And that means allowing business to create jobs, not taxing them till they close down.”
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.”
