Britain’s struggling hospitality sector was blindsided this week by news that Andy Burnham’s government intends to let English mayors impose an uncapped levy on anyone staying overnight in a hotel, B&B or holiday let, a move critics say will pile even more pressure on families already squeezed by Labour’s tax rises.
The so-called Overnight Visitor Levy, first floated under Sir Keir Starmer and now being pushed through by his successor, will let mayors charge a percentage of the room rate with no ceiling whatsoever.
Ministers insist local leaders “won’t want to price themselves out of the market,” but that is precisely the kind of vague reassurance that has done little to calm an industry already reeling from two years of Labour tax raids.
Housing Secretary Angela Rayner is expected to unveil the details on Thursday, following briefings to mayors last week that reportedly caught even hospitality bosses off guard. Many had been led to believe England would follow Wales’s example, where the levy is capped at £1.30 a night. Instead, Whitehall has opted for the more aggressive Scottish model, under which Edinburgh already charges a 5 per cent surcharge, and Glasgow is preparing to follow suit in 2027.
The consequences for ordinary families could be significant. Industry estimates suggest a levy modelled on Edinburgh’s could strip well over a billion pounds from the hospitality sector and add roughly £100 to the cost of an average family holiday, a fresh blow at a time when household budgets are already stretched thin by the cost of living.
It gets worse for the young people Labour claims to champion. Hospitality has long been a first rung on the career ladder for school leavers, but the sector has already shed more than 100,000 jobs since Labour took office, hammered by higher National Insurance contributions and a steeply rising minimum wage.
Hotel industry executives warn that yet another cost burden will only accelerate the trend, pushing employers to hire only experienced staff and shutting the door on the very young jobseekers Burnham says he wants to help off the unemployment rolls. As the chief executive of one leading hospitality firm told the Telegraph, the sector is bracing for a “jobs bloodbath” at precisely the moment ministers claim to be trying to get young people into work.
Tory shadow chancellor Andrew Griffith did not mince words, warning that an unlimited levy would choke off opportunities for young workers just as ministers claim to be tackling youth unemployment, and accusing Labour of using tourists as a convenient source of cash to paper over “dodgy town hall finances.” Tees Valley Mayor Lord Houchen went further, branding the levy a backdoor tax grab dressed up as devolution, one that will raise costs for businesses, threaten jobs, and make British holidays pricier for British families.
The irony will not be lost on voters: it was Burnham himself, as Mayor of Manchester, who pioneered this approach with the city’s £1-a-night visitor charge back in 2023. Now, as Prime Minister, he is exporting that model nationwide, with no upper limit in sight. London’s Labour mayor, Sadiq Khan, is reportedly eager to follow, with analysts suggesting a London-wide levy could rake in more than £350 million a year for City Hall, money local Conservatives argue would be far better left in the pockets of visitors and the businesses that depend on them.
With more than 30 English councils already propped up by emergency government support, ministers appear to be banking on tourists to plug the holes left by years of fiscal mismanagement, rather than confronting the deeper problems in local government finance.
Downing Street maintains that decisions on the levy will rest with “local leaders and local voters,” and that mayors will be required to set out how revenues are reinvested by March 2028. Supporters of the policy, including several regional mayors, argue it offers a much-needed funding stream for services and infrastructure at a time when mayors have no power to raise council tax themselves, and point to similar schemes already operating in cities such as New York, Amsterdam and Rome. Whether that reassures families and hospitality workers facing yet another bill under Labour remains to be seen.
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It is vital that Britain never rejoins the EU. Germany pays a huge €33bn Euro just for membership of the EU. F/T article- Germany holds the line against a larger EU budget- the EU is insane! They want to increase the amount of money each country pays