Labour mayors urged to back VAT cut for pubs and hotels to enable new holiday tax
Labour metro mayors have been told they must support a VAT reduction for hospitality businesses if they want to implement Andy Burnham’s overnight visitor levy.
Labour’s regional mayors have been warned that supporting a VAT cut for the hospitality sector is required to enforce Andy Burnham’s proposed overnight visitor levy, which would raise hotel, B&B and holiday-let prices by 5%. Allen Simpson, chief executive of UKHospitality, wrote that many European nations apply a 10% or lower VAT on holidays, compared with the UK’s 20%, and that the levy could push a family’s hotel cost in Manchester to about 27% versus 14.5% in Berlin.
Butlin’s chief Jon Hendry Pickup echoed concerns, saying the tax would disproportionately affect poorer families and hurt resort operators. Conservative leader Kemi Badenoch criticised the measure as damaging to cultural tourism. A government report admitted worries about price spikes during school holidays but defended a percentage-based levy as fairer. The Transport Secretary deflected responsibility to mayors, and Labour’s Heidi Alexander emphasized that the tax revenue could fund transport improvements in cities like London under Mayor Lord Khan.
Why it matters
The proposal links a new holiday tax to a VAT cut, affecting the cost of domestic travel for families and the viability of hospitality businesses.
How the sides frame it
MODERATE AGREEMENTBoth camps report that over 800 hospitality firms are urging a cut in VAT from 20% to 10%, but left-leaning coverage frames the demand as a fight for a fairer tax burden and job protection, while right-leaning coverage emphasizes the political pressure on Labour mayors and the controversy over a proposed visitor levy.
LEFT
Left-leaning coverage frames the VAT cut request as a necessary step to prevent closures, protect jobs and ensure a fairer tax burden for the hospitality sector.
RIGHT
Right-leaning coverage frames the VAT cut request as a politically charged issue tied to Labour mayors’ support for a new visitor levy and criticism from conservatives.
The left emphasises
- fairer tax burden
- closures will accelerate and jobs will disappear
- petition with over 370,000 signatures calling for a 10% VAT rate
The right emphasises
- Labour mayors urged to back VAT cut to enable a new holiday visitor levy
- visitor levy could raise hotel and holiday-let prices by up to 27% in Manchester
- Conservative leader Kemi Badenoch criticised the measure as damaging to cultural tourism
In this story
Related stories
2 in this thread