‘English Tourism Week’, which runs until 23 March, kicked off with a jaunty reception in Downing Street. Various ‘celebratory’ and industry events are planned for this week. But those who work in England’s tourist industry are not in the mood for celebrating. For all the fanfare, our tourist and hospitality sectors are in trouble – and the government is to blame.
The tax will further cripple the marginalised UK tourism sector
To celebrate ‘Tourism Week’ while at the same time administering a punishment beating that hits B&B, hotel and pub owners, as well as self-catering and Airbnb owners, is the equivalent of chartering a luxury bus to parade the English cricket team – ‘Cricket Awareness Week’ – down Whitehall after their last 5-0 Ashes whitewash.
The Edinburgh tourist tax, which will hit those who stay overnight in the city with a five per cent levy from July, is a poster example of a policy that is anti-growth. Liverpool and Manchester already impose a visitor charge. And Wales is introducing its own tourism tax from April 2027. The bad news is that the rest of the UK could soon follow this example, if the unpopular ‘Tourism Tax’ is included in this year’s King’s Speech.
Industry leaders at the Downing Street reception think it will. This will give the green light for other Labour-controlled mayoral cities, including London, to add an ‘overnight visitor levy’ on stays. The tax would hit all hotels, pubs with accommodation, B&Bs, holiday lets and Airbnb locations. It would also affect business travel.
The idea is to use the money to fund and improve local infrastructure – such as cleaner streets and more buses – but it’s unclear how the money will be ringfenced for tourism purposes. Those in the tourism trade – such as myself, who runs a heritage and accommodation business in the West Midlands – regard it as a stealth tax. Tourism is being used as a political football to appease Labour big city mayors who are desperate for funding and to make it look like ‘Devolved powers’ are actually working.
The tax will further cripple the marginalised UK tourism sector at a time when it is already reeling from the increased minimum wage, rises in National Insurance, a hike in business rates and other inflated business costs from insurance (20 per cent increases are usual), energy and broadband. So obsessed am I with trying to reduce electricity costs that I have set the timed light switch on a holiday property to only go on for 20 seconds.
Tourism trade associations have been vocal in their opposition to the recent direction of government policy which they still hope to de-rail. Ben Edgar-Spier, director of public affairs at the Association of Self-Caterers told The Mace, which covers the public affairs and trade lobby industry: ‘The cumulative impact on tourism sector of increasing taxation and regulation is at odds with the government’s ambition for growth…policy in Westminster, Cardiff and Edinburgh is actively eroding the conditions tourism SMEs need to start up and thrive’.
That’s spiky coming from a trade body, often the political equivalent of a Quality Street soft centre. David Sheen, head of public affairs at UK Hospitality, told me that his trade body’s response to the proposed visitor levy was a ‘feeling of profound disappointment’. He added that Labour ministers had ‘explicitly committed to our organisation, the sector, and Parliament’ that they were not intending to devolve powers to local mayors to introduce a Visitor Levy.
Back in the 1980s, tourism in the UK boomed when the sector – viewed by Margaret Thatcher as a valuable export sector – was part of the Department of Trade and Industry. Large marketing budgets were spent on the ‘Come to Britain’ campaign. While I can’t see any Labour minister re-launching a similar campaign today with that slogan, the truth is that tourism and hospitality is too important to be treated like a fringe issue.
But that’s exactly what is happening. Talk to those who work in tourism and most say the same thing: ‘There’s apathy and a lot of talk but the industry is spread over so many ministries that everybody passes the buck and nothing happens’.
Restoring the £127 billion tourism brief – with two million jobs – back to the Department of Business and Trade would be a step forward. One reason that tourism has struggled to be heard in recent years is that, since the 1980s, there’s been no cabinet level minister to look after tourism interests. Stephanie Peacock, the current junior minister, was appointed Minister for Sport, Tourism, Civil Society and Youth in September, her background being a history teacher in adult education in Yorkshire. But tourism, heritage and hospitality deserve their own portfolio, not to be lumped into a sub-set of the Department for Digital, Culture, Media and Sport.
The political downgrade for tourism began back in the 1980s when tourism was strangely moved from trade to the Department for Employment. Then Tony Blair removed the word ‘Heritage’ from the main tourism portfolio in 1997 as it wasn’t ‘Cool Britannia’. It staggered on with a junior ministerial brief. Then, in 2012, under David Cameron, Heritage and Tourism was carved into two separate ministries, with ‘tourism’ demoted to sitting under the unlikely partnering of Sports and Equalities.
England’s tourism and heritage sectors deserve better. They generate billions, but are seen as a cash cow by the government that seems to do well enough on its own. A new ‘visitor levy’, and how it might be implemented, keeps me up at night. The fee could tip many smaller B&Bs and self-catering businesses over the £90,000 VAT threshold and thus help destroy an already marginalised sector that has long been hung out to dry by successive governments (not just Labour). In short, the bureaucracy and admin time it will take up will push B&B, hotel and tourism owners to the point of exasperation. I expect to make Basil Fawlty look like a study in meditative Zen.
William Cash was a former heritage and tourism spokesman for Ukip