Andy Burnham has been urged to scrap a proposed holiday tax that could add £345 to the cost of a week-long staycation for a family of four. The tax, part of a Labour government shake-up by Chancellor Rachel Reeves, would allow mayors to introduce a levy on overnight stays.
UKHospitality Calls for Scrapping of Holiday Tax
Allen Simpson, chief executive of UKHospitality, said: “Whoever becomes the next Prime Minister should make one of their first acts stopping the holiday tax.” He warned the measure would hit lower-income families hardest and cost 33,000 jobs across the hospitality sector.
How the Visitor Levy Would Work
Under the new laws, mayors of combined authorities would have the power to tax overnight stays and reinvest the revenue in local public services. The most likely model is a percentage-based levy, similar to Amsterdam's 12.5% charge on overnight stays. For a family of four taking a week-long staycation averaging £2,765, this would add £345 to the total cost.
Political Opposition Mounts
Robert Jenrick, Reform UK's treasury spokesman, said: “The end of Rachel Reeves must be the end of the dreaded holiday tax. It would be a slap in the face to the working people Andy Burnham represents to start taxing their holidays.” Conservative Shadow Chancellor Sir Mel Stride added: “Starmer or Burnham. It doesn’t matter who is in Number 10 – Labour is choosing to make holidays in Britain more expensive.”
Government Defends Fiscal Devolution
Speaking at the British Chambers of Commerce conference, Chancellor Rachel Reeves said: “The area where there’s certainly unfinished business is on fiscal devolution. I set out in last year’s budget a consultation, for example, on the visitor levy, which is something that mayoral combined authorities will have responsibility for. Moving us more in line with the US and Europe that have single visitor levies on hotel bookings, and then that money being invested in the local area.”
The proposed levy is part of a Labour manifesto pledge to devolve more fiscal powers to local leaders. However, critics argue it will disproportionately affect families and damage the domestic tourism industry.
