Under his big devolution plan, the new PM will hand more power from Westminster to regional mayors and local leaders, giving them greater control over jobs, transport, housing, skills and public services. Burnham says this will put communities in the driving seat and create that growth. Which sounds nice in theory. But the reality is turning out to be very different. There’s no guarantee that handing new powers to mayors will create growth. It’s just an excuse to tax us more.
Burnham has just given mayors the power to impose a new Overnight Visitor Levy on hotel accommodation. Families could now pay an extra £99 for a week-long break in London, or £198 for a summer holiday, according to trade group UKHospitality. This won’t generate growth but destroy it, as disgruntled tourists arrive with less to spend or simply stay at home. This tax will hit British hotels and all the towns that rely on money brought in by outsiders passing through. Your next staycation just got more expensive. And where will the money go? Into local authority coffers.
The Government says it will support local services, public spaces and attractions. But there’s no guarantee the cash will actually be spent on making our towns more attractive to tourists. Mayors will have considerable freedom over how they spend it, meaning it could simply disappear into wider council budgets, staff pay rises and politicised local authority projects.
It’s not as if British local government is renowned for careful management of taxpayers’ money. Now it’s got another pot of cash to play with, taken from productive businesses and handed to the public sector. At least we know the truth about devolution. It’s simply an excuse to pile local taxes on top of national ones.
Once introduced, the only way to avoid the tourist tax is to stay at home. Some may prefer to travel abroad, but Labour has already thought of that by hiking Air Passenger Duty to make our foreign holidays more expensive too.
Labour mayors across England have indicated they’ll voluntarily limit the levy to 5%. Don’t fall for that. History tells us that once governments introduce a tax, it never goes away. Then the rate creeps up.
The legislation paves the way for that. There’s no national cap protecting hotel guests from future increases. Once established, it will only increase. Always the way.
Let’s take just one example. When Air Passenger Duty was introduced in 1994, it added £5 to short-haul European flights and £10 to long-haul ones. Today, cattle class passengers pay £15 to go to Europe, or £32 for standard rate seats. For the US, the figures are £102 and £244 respectively. Heaven knows how high this new tourist tax will go.
This tax will hit profits at already struggling hotels, along with the pubs, restaurants and other attractions that rely on visitors. Burnham has ignored warnings of a “jobs bloodbath” across the hospitality sector.
Hotels already charge VAT, while hotel businesses face a raft of other taxes, including Rachel Reeves’s stupid and destructive jobs tax. Now Burnham has added yet another layer.
And this is before the Budget, when no doubt chancellor John Healey will accelerate the process, cheered on by Labour backbenchers.
Burnham’s devolution plan is only just getting started. It looks like a massive excuse to launch a new stealth tax raid on people who work, spend and try to make a living in this country. Or forget their troubles on a short break.
As Burnham reminded us this week, the one thing that’s sacred in his world is social security spending. We might as well all stay in bed. Our own. Unless he taxes that next.
