Angela Rayner is aligning herself with Labour’s regional mayors – and pitting herself against Rachel Reeves – by backing demands for a ‘tourist tax’, it is reported.
The Deputy Prime Minister is said to be at odds with the Chancellor by arguing that local authorities should be given the power to tax visitors’ hotel stays.
Many cities across Europe charge tourists a tax on the cost of hotels rooms and private rooms.
Both Sir Sadiq Khan, the London mayor, and Andy Burnham, the Greater Manchester mayor, have supported calls for a visitor levy.
But, according to The Telegraph, Treasury officials are opposed to a tourism tax amid fears it would represent a fresh blow to the hospitality industry.
The newspaper reported that Ms Reeves has ruled out further fiscal devolution.
This is despite Ms Rayner having pushed for powers to charge tourist taxes to be included in the Government’s new devolution bill, published earlier this month.
Labour’s workers’ rights reforms and Ms Reeves’ hiking of employers’ National Insurance contributions have already burdened businesses with higher costs.
Angela Rayner is aligning herself with Labour’s regional mayors – and pitting herself against Rachel Reeves – by backing demands for a ‘tourist tax’, it is reported
The Deputy Prime Minister is said to be at odds with the Chancellor by arguing that local authorities should be given the power to tax visitors’ hotel stays
Both Sir Sadiq Khan, the London mayor (left), and Andy Burnham, the Greater Manchester mayor (right), have supported calls for a visitor levy
Critics warned a tourism tax would cause further harm for the hospitality industry.
Tory shadow chancellor Mel Stride said: ‘Labour can’t help themselves – it’s always tax, tax, tax.
‘Whether it’s Angela Rayner or Rachel Reeves, the instinct is always the same – more taxes.
‘First a £25billion jobs tax, now threats of a tourist tax that would hit hospitality hard.’
Kate Nicholls, of UK Hospitality, said England already ranked poorly against European rivals for ‘tourism competitiveness’ because of a comparatively high rate of VAT.
Sir Sadiq and Mr Burnham recently joined other mayors to urge the Government to allow local authorities to bring in a Barcelona-style visitor levy to generate income from tourism.
The group, led by Liverpool city region mayor Steve Rotherham, said provisions could be made in the devolution bill, or in a specific finance bill.
‘The Liverpool city region is a global icon of creativity, culture and character – attracting more than 60million visitors every year and supporting a £6.25billion visitor economy,’ Mr Rotheram said.
‘That’s something to be incredibly proud of – but it also comes with pressures on our infrastructure and services.
‘A small charge on overnight stays – the kind most of us wouldn’t think twice about when travelling abroad – would give us the power to reinvest directly into the things that make our area so special.’
A Government spokesman said: ‘There are currently no plans to introduce a tourism tax in England.
‘Places can already choose to introduce a levy on overnight stays through the Accommodation Business Improvement District model.
‘We are also already empowering local leaders by removing restrictions and allowing the existing Mayoral Council Tax Precept to be spent on areas that drive local growth, such as transport and adult skills.’
