Labour Faces Allegations of Holiday Tax Amid Budget Anticipation

Labour MPs have sparked controversy over an amendment that could pave the way for a new holiday tax just days before the forthcoming Budget. Prominent figures within the hospitality sector have raised concerns that a proposed change to the Government’s devolution bill would grant mayors the authority to levy additional taxes on hotel stays, effectively introducing a tourist tax without comprehensive parliamentary scrutiny.

The amendment, put forward by Alex Mayer, Labour MP for Dunstable and Leighton Buzzard, would require the Government to establish the regulations necessary for mayors to implement a nightly charge on tourists within a year of the bill passing. If enacted, this measure would bring England in line with Scotland and Wales, where similar tourism taxes are rolling out.

Chancellor Rachel Reeves is reportedly considering a tourism tax announcement in her upcoming Budget, despite expressing opposition in recent years. The measure would allow city mayors such as London’s Sadiq Khan and Greater Manchester’s Andy Burnham to introduce their own visitor levies. Both have indicated a willingness to use such powers should the legislation pass.

Allen Simpson, chief executive of the trade body UKHospitality, criticised the move as an attempt to introduce a significant policy change without due process or public input. Simpson stressed that if implemented, the tax could burden both domestic and international travellers, with earlier estimates suggesting that a £1 per person per night charge might raise over £400 million annually across the country.

Industry leaders warn that new costs for tourists could have wider economic repercussions. Sir Rocco Forte voiced apprehensions that increased accommodation expenses may deter budget-conscious visitors, urging policymakers to consider potential damage to the UK’s competitiveness as a global tourist destination.

No official government confirmation has yet been issued. The Treasury maintains that its focus for the Budget remains on reducing waiting lists, cutting national debt and alleviating the cost of living. The parliamentary debate on the amendment appears set to influence the legislative trajectory for tourist taxation in England.