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Angela Rayner battles Rachel Reeves over England tourist tax
Angela Rayner is pushing for allowing local councils in England to introduce a tourist tax on hotel stays to help shore up local government finances strained by rising costs and public service demands. She supports giving regional mayors and councils powers to levy a small charge on overnight visitors, similar to schemes already planned or in place in Scotland and various European cities like Venice and Barcelona. The revenue raised would be intended to fund local infrastructure and services directly impacted by tourism.
However, Chancellor Rachel Reeves strongly opposes this proposal, fearing it would damage the struggling hospitality sector, reduce business confidence, and hurt tourism numbers, especially at a time when hotels and restaurants are coping with high costs and wage pressures. Reeves’ resistance has effectively shelved the tourist tax plan in England for now. The Treasury worries the tax could deter visitors and risk economic recovery in tourism-dependent areas.
The debate underscores a broader power and policy struggle within the Labour leadership: Rayner, as Deputy Prime Minister and Secretary of State for Levelling Up, wants to empower local authorities to raise revenue independently, while Reeves, as Chancellor, prioritizes protecting businesses and delivering economic growth without new tourism-related taxes. Some Labour metro mayors back Rayner’s position, arguing that a small, targeted levy on visitors would reinvest in the local economy and public services strained by tourism demands. But hospitality leaders, including UK Hospitality’s chief executive, warn it would worsen an already challenging trading environment.
Downing Street and government spokespeople emphasize that there are currently no plans to introduce a tourism tax in England. Instead, some local authorities use alternative models like Accommodation Business Improvement District levies, but these are limited and patchy. The debate is ongoing, with councils expected to continue lobbying for fiscal powers amid England’s strained local government budgets.
In summary, today’s main messages are:
• Angela Rayner advocates for a local tourist tax on hotel stays to raise vital funds for local services, aligning with mayoral calls and similar schemes in other parts of the UK and Europe.
• Rachel Reeves opposes the tax due to concerns about its negative impact on the hospitality industry and tourism recovery, effectively blocking the proposal currently.
• The issue highlights tensions between local fiscal empowerment and central economic policymaking within the Labour government, with no immediate resolution.
• The government insists no national tourist tax is planned in England at present, though discussions and local initiatives continue.
This clash represents a high-profile policy and political debate within Labour reflecting competing priorities on taxation, local authority funding, and economic recovery.
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5. https://www.ajbell.co.uk/news/article...
6. https://www.yahoo.com/news/tourists-a...
7. https://www.standard.co.uk/news/polit...
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