Andy Burnham advised to scrap ‘poisonous’ main tax plan that would kill whole business

UK Hospitality has written to the Prime Minister warning that the government’s overnight visitor levy could cost an estimated 33,000 jobs in the UK’s tourism sector

A prominent hospitality trade organisation has called on Andy Burnham to abandon proposals to roll out the so-called “tourist tax” nationwide as part of his devolution campaign. UK Hospitality (UKH) has penned a letter to the Prime Minister, obtained by City AM, cautioning that the government’s overnight visitor levy would eliminate 33,000 positions in the nation’s tourism industry.

“It’s clear the government is now intending to implement a nationwide holiday tax, making family holidays more expensive during a cost-of-living crisis,” UKH chief executive Allen Simpson told Burnham. “I am pro-devolution, but I am not in favour of an extra tax that will cost 33,000 jobs.”

The charge was initially suggested under Keir Starmer’s administration and designed to grant regional mayors the authority to introduce a levy on tourists, applied to overnight stays.

The tax has faced resistance from Premier Inn owner Whitbread, pub chain Greene King and seaside resort Butlins, as reported by City AM. Burnham’s “Rewiring the State” devolution initiative, outlined last week, cleared the path for tourist tax powers to be granted to every strategic authority in the UK.

The government intends for the income from this tourist tax, alongside a share of local income tax receipts, to be utilised to finance local infrastructure schemes.

“Local leaders know what it will take to drive growth in their areas, creating jobs and attracting investment that speak to the strengths of their region,” the government said. But UK Hospitality, which represents 130,000 British pubs, restaurants and hotels, has cautioned that the “politically toxic” visitor levy would lumber holidaymakers with more than £1bn in tax.

Simpson has called on Burnham to scrap the tax and instead establish a “holiday bonus,” which would return a portion of tax revenues to local regions based on the number of tourists they draw.

This would operate similarly to the Prime Minister’s scheme to return a chunk of income tax receipts to local authorities, to be spent on transport and community projects, UKH said. Simpson told Burnham: “Under your leadership, hospitality can be included within the wider strategy of devolving revenues rather than creating new taxes.

“With this proposal, mayors would be able to spend the funding on their regional priorities, but there would be a clear incentive to improve the local environment to encourage more overnight stays.”

Last week, a group of backbench MPs warned Burnham that the tourist tax could reduce tourism spending and threaten investment and employment in the UK’s hospitality sector.

The All-Party Parliamentary Group for hospitality and tourism called on the government to commit to a full review of the policy and meaningful engagement with hospitality leaders before pushing ahead with the tax. Chris Webb MP, chair of the backbench group, stated: “This report makes clear the concerns that exist across the tourism and hospitality sectors about the potential impact of a visitor levy. “.

“If the Government chooses to proceed with the levy, it must be designed with fairness, consistency and genuine engagement with the industry.”