Angela Rayner is reportedly pushing for a new tourist tax despite opposition from Rachel Reeves. The Deputy Prime Minister is said to want cash-strapped councils to be given the power to tax visitors.
It comes as a record 43 million foreign visits are expected to the UK this year, on top of British people taking staycations. But the Chancellor is said to be opposed to a levy due to fears it would further damage hospitality businesses grappling with the employers’ national insurance hike and Labour’s workers’ rights overhaul.
Ms Rayner, who is also the Housing, Communities and Local Government Secretary, called for the power to charge tourist taxes to be included in the Government’s Devolution Bill, according to The Telegraph.
Tory Shadow Chancellor Sir 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 £25 billion jobs tax, now threats of a tourist tax that would hit hospitality hard.”
The row puts Ms Rayner on the side of regional mayors including London mayor Sir Sadiq Khan and Greater Manchester’s Andy Burnham.
European cities including Barcelona, Lisbon, Venice and Amsterdam charge tourists a tax on the cost of hotel rooms and private rentals.
It comes after the Deputy PM proposed a series tax hikes in a private memo to the Chancellor earlier this year.
A Ministry of Housing, Communities and Local Government spokesperson 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.”