Andy Burnham in row with hospitality sector
Good morning. Last year Andy Burnham, who was then mayor of Greater Manchester, and his close friend and ally Steve Rotheram, mayor of the Liverpool city region, were urging the government to allow mayors in England to bring in what they called a visitor levy.
Burnham and Rotheram were pushing at an open door. In May this year Keir Starmer included plans for an overnight visitor levy bill in the king’s speech.
Scotland and Wales already have their own versions of this.
Now Burnham’s government is about to announce further details of the plan. The Daily Telegraph has the story.
In May the government was not specific about whether or not there would be a cap on how high the levy could go. In their Telegraph story, Szu Ping Chan, Harry Brennan and Eir Nolsøe say the plans being announced by the government will be more extensive than the hospitality industry expected. They report:
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 said they had been led to believe that the levy would be capped, as is the case in Wales. However, England will now follow the Scottish model, where there is technically no upper limit on what can be charged.
Andrew Griffith, the 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, the trade body for the sector, claimed that this proposal would cost thousands of jobs. He told 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, if you go to Rome, if you go to Berlin, you’re paying a small tourism tax, but it’s capped. This one isn’t. And VAT is only ۱۰%.
So even before England introduces this new tax, the tax on a holiday in the UK is already more expensive than our peers.
When it was put to him that mayors would not have to introduce this tax, Simpson accepted that. But he went on:
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 ۵% tax, which is entirely possible, that’s what it is in Edinburgh – but that’s lower than it is in, say, Aberdeen – the economic analysis is that it’s ۳۳,۰۰۰ jobs which will go.
Simpson said UK Hospitality was able to come up with a specific figure because the sector could measure quite precisely what impact price has on demand. He also claimed taxes on the hospitality sector were already very high.
Simpson went on:
For anyone who takes a holiday in the UK, it’s going to be an average of about £۱۰۰, £۱۲۰, on the cost of a family holiday, which is more than double the benefit from the energy VAT cut that we saw earlier in the year. So it is not going to be painless.
Here is the agenda for the day.
۹.۳۰am: NHS England publishes its monthly hospital performance figures.
۹.۳۰am: The actor Michael Sheen gives evidence to the Commons Welsh affairs committee about contaminated land, a topic he investigated for a highly-praised documentary.
Morning: Angela Rayner, the communities secretary, chairs a meeting with regional mayors from No ۱۰ North to discuss plans for a tourism tax. Later Lucy Powell, the education secretary, hosts a summit there on making England a “technical education superpower”.
۱۱.۳۰am: Downing Street holds a lobby briefing.
After ۱۱.۳۰am: Wes Streeting, the defence secretary, is due to make a statement to MPs about Ukraine and the threat from Russia.
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