Labour’s latest bright idea for “boosting local services” is, unsurprisingly, another tax – this time aimed squarely at British families trying to enjoy a holiday in their own country.
Under plans now being explored by ministers, regional mayors and local councils, families visiting some of Britain’s most popular seaside towns, beauty spots and tourist hotspots could soon face a new overnight “visitor levy” on hotels, campsites, B&Bs and holiday lets. In plain English, a holiday tax.
And this would not be a token charge. Depending on how aggressively local authorities use the new powers, the extra cost of a family staycation could soar by hundreds of pounds.
If Labour follows the model already used in parts of Europe, where charges are based on a percentage of accommodation costs, the numbers quickly become eye-watering. Amsterdam’s tourist levy sits at 12.5pc. Applied to the average £2,765 family staycation, that would pile on an additional £345 before families have even bought fish and chips or visited the beach. Even a lower rate, similar to Edinburgh’s proposed 5pc levy, would still add almost £140 to the bill.
Alternative proposals include flat-rate nightly fees, similar to those already imposed in Manchester and Liverpool. UK Hospitality estimates that could still cost a family an extra £112 over a typical two-week break.
The areas considering the tax read like a list of Britain’s best-loved holiday destinations. Whitby, Scarborough, Cromer, the Norfolk Broads, Sandbanks, Bath, the Peak District, Bamburgh Castle and large swathes of Cornwall and Yorkshire could all eventually be affected.
As many as 10 of England’s 14 regional mayors are reportedly either backing the idea or actively considering it. London mayor Sadiq Khan has welcomed the powers, while Greater Manchester mayor Andy Burnham has openly lobbied the Government to press ahead.
The justification, predictably, is that councils are strapped for cash and tourism should help fund local services. But critics say Labour is treating holidaymakers as an easy cash machine to prop up poorly managed local authorities. Families already hammered by inflation, soaring mortgage costs and record tax burdens are now apparently expected to subsidise councils every time they book a weekend away.
The backlash from the hospitality industry has been fierce. Business leaders warn the policy risks damaging one of the UK’s fastest-growing sectors at exactly the wrong time. Tourism contributes around 5pc of Britain’s GDP and supports roughly 2.4 million jobs. A report by Oxford Economics for UK Hospitality estimated that a widespread tourist tax could slash visitor spending, wipe out 33,000 jobs and shrink GDP by £2.2bn.
There is also growing concern that the levy could backfire spectacularly by encouraging Britons to holiday abroad instead. For years, politicians have urged people to “support local tourism” and spend money in British seaside towns and rural communities. Now those same destinations may become even more expensive than foreign package holidays.
The timing could hardly look more contradictory for Labour. Chancellor Rachel Reeves recently promised to help families with a “Great British Summer Savings” push, while Prime Minister Keir Starmer has spoken about making family holidays more affordable. Yet at the very same time, Labour’s proposed Overnight Visitor Levy Bill could make UK staycations significantly dearer.
Opposition figures have wasted little time attacking the plans. Reform’s Andrea Jenkyns branded the proposal “a tax on hard-earned holidays”, warning it would punish both families and small businesses. Conservative Ben Houchen accused Labour of “another cash grab” that would hammer hospitality firms already struggling under rising costs.
Perhaps most strikingly, the tax may not stop with hotels. There are discussions about charging higher rates on holiday homes and second properties in tourist areas, on top of existing council tax surcharges that can already reach 100pc in some regions.
For many voters, it reinforces an increasingly familiar pattern: whenever Labour faces a funding problem, the answer is another levy, another surcharge and another hit to ordinary households. What was once sold as helping local economies now risks becoming a penalty for families simply wanting a week away on the British coast.
