Angela Rayner wants to tax Brits more (Image: Getty)

Angela Rayner is back with a vengeance after being ousted by Sir Keir Starmer’s Cabinet over a failure to pay £40,000 in tax. The “Red Queen”, as she was dubbed by Lord Ashcroft, is very keen on the idea of taxing the domestic tourism industry in order to raise revenue for local authorities. It was first rolled out in Manchester in 2023. Where else? The Government says the power given to regional leaders to impose a levy on visitors staying overnight in their area is “the most significant step in making fiscal devolution a reality”.

Officials added that 10 regional mayors have committed to keeping charges at 5% of overall, standard fees or below. Oh, that’s alright, then. UKHospitality thinks this could result in 33,000 job losses and a £2billion hit to the economy. After the carnage inflicted by the COVID-19 pandemic, firms need help, not yet another tax.

And ministers are left wondering why so many young people are left without jobs, after businesses were already hit by National Living Wage and employer National Insurance hikes by Rachel Reeves. Hospitality is where many people start their working lives.

This new levy will compound an already hostile situation for employers, and, what is more, it has been reported that evading Ms Rayner’s tourist tax will carry a maximum penalty of 14 years in prison. Proposed measures target accommodation providers in England who could attempt to sidestep the levy, with legislation designed to prevent property owners offering so-called “mates’ rates” to friends that would decrease the amount of tax paid on temporary stays.

It is as if the Government is trying as hard as it possibly can to make things harder for a sector that has already been buffeted by the biggest storm it will likely ever see, with many companies having disappeared as a result, and is now having to operate in still incremental conditions.

It goes against the Prime Minister’s insistence that he wants to help out businesses. At the Budget, the Chancellor announced that the threshold at which small companies start paying rates will rise from £12,000 to £18,000. Before that, Mr Burnham announced a 20% cut to business rates for pubs, social clubs, and live music venues in England. Why do those good things and at the same time increase taxes another way?

It muddies the waters and makes life harder for people trying to run a business, many of which depend on seasonal revenue. And now Ms Rayner is seemingly pushing to imprison people, potentially for more than a decade. Talk about overkill. It’s just too much.

Angela Rayner Just Punched Brits in the Guts – It’s Too Much to Take

Angela Rayner has once again become the centre of political controversy after supporting plans to introduce a tourist tax on overnight accommodation in England. The proposal has attracted criticism from businesses, tourism organisations and political opponents, who fear that the additional financial burden could damage an industry already struggling with rising operating costs. At a time when British households are facing expensive holidays, higher living costs and increasing taxes, the prospect of another charge on domestic tourism has raised serious concerns. Critics argue that the government should be helping hotels, restaurants, pubs and other hospitality businesses recover rather than introducing policies that could make their situation even more difficult.

The proposed visitor levy would give regional mayors in England the power to introduce charges on people staying overnight in hotels and other forms of paid accommodation. The revenue would be collected locally and used to support transport, tourism infrastructure and other regional priorities. Rayner has defended the proposal as an important step towards giving local authorities greater financial independence. Supporters believe that popular tourist destinations should have the ability to raise additional revenue from visitors who benefit from local facilities and services. However, opponents argue that the policy could make holidays more expensive and discourage people from visiting British destinations.

The idea of a tourist tax is not entirely new in the United Kingdom. Manchester introduced a visitor levy in 2023 through a voluntary accommodation-based scheme. The government now wants to expand the principle by allowing more regional authorities to introduce similar charges. Under the proposed arrangements, ten regional mayors have reportedly committed to keeping the levy at 5 per cent of standard accommodation fees or below. Although ministers present this as a relatively modest charge, hospitality businesses argue that even small additional costs can influence customers’ decisions, particularly when families are already trying to control their holiday budgets.

One of the biggest concerns is the potential effect on Britain’s hospitality industry. Hotels, guest houses, restaurants, pubs and tourism businesses have faced considerable difficulties over recent years. The COVID-19 pandemic caused unprecedented disruption, forcing many businesses to close temporarily and leaving others with significant financial losses. Although the industry has gradually recovered, businesses continue to face high energy bills, expensive ingredients, increased wages, business rates and other operating costs. For many smaller establishments, profit margins remain limited. Introducing another tax could therefore create additional pressure on businesses that are already struggling to remain competitive.

UKHospitality has warned that the proposed visitor levy could result in approximately 33,000 job losses and cause an estimated £2 billion reduction in economic activity. These figures have intensified the debate about whether the policy will generate more benefits than costs. Hotels and accommodation providers fear that higher prices could discourage domestic visitors and make Britain less attractive to international tourists. If fewer people choose to stay overnight, businesses could experience lower revenues, reduced investment and difficulties maintaining employment levels. The consequences could extend beyond hotels to restaurants, entertainment venues, transport providers and local retailers that depend on tourism spending.

Small businesses are particularly vulnerable to changes in consumer behaviour. Large hotel chains may have greater financial resources and flexibility to absorb additional charges, but independent hotels and family-run guest houses often operate on much tighter margins. A small increase in accommodation costs could make a difference when customers compare different destinations or decide whether to travel at all. Businesses in coastal towns, rural communities and traditional holiday destinations may be especially concerned because their revenues frequently depend on seasonal tourism. A decline in visitor numbers during the busiest months could have significant consequences for local employment and economic activity.

The controversy has also raised questions about the government’s wider approach to taxation. Rachel Reeves has already introduced changes to employer National Insurance contributions and the National Living Wage, increasing employment costs for many businesses. Although higher wages can improve living standards for workers, employers must find the money to meet these additional obligations. Hospitality businesses, which rely heavily on staff, are particularly sensitive to increases in labour costs. Restaurants, hotels and pubs cannot always pass every additional expense on to customers without risking a reduction in demand. The proposed tourist tax therefore arrives at a time when many employers are already reviewing their budgets and staffing arrangements.

There is also a contradiction in the government’s approach to economic growth. Ministers frequently emphasise their commitment to supporting British businesses, encouraging investment and creating employment opportunities. However, critics question why the government would introduce another financial burden on an industry that provides thousands of jobs and contributes significantly to local economies. Hospitality is also an important entry point into the labour market for young people. Many workers begin their careers in hotels, restaurants, cafés and pubs, gaining valuable experience before moving into other professions. If businesses reduce recruitment or close because of higher operating costs, younger workers could lose important opportunities.

Another controversial aspect of the proposal concerns penalties for avoiding the levy. Reports surrounding the proposed arrangements have highlighted the possibility of severe criminal penalties for deliberate evasion, potentially including prison sentences of up to 14 years under the relevant enforcement proposals. This has attracted further criticism from business representatives, who question whether such severe consequences would be proportionate for an accommodation-based tax. Hotels and other providers would need clear guidance about their responsibilities, reporting requirements and payment procedures. Without carefully designed regulations, businesses could face unnecessary administrative complications and uncertainty.

Supporters of the visitor levy argue that the additional revenue could help improve the places that attract tourists in the first place. Popular destinations often experience increased pressure on public transport, roads, waste collection, public spaces and local infrastructure. Visitors benefit from these facilities, while local authorities must find the resources to maintain them. A properly designed levy could therefore provide a dedicated source of funding for tourism-related improvements. Regional mayors could use the money to improve transport connections, maintain public spaces, support cultural attractions and encourage further investment in local communities.

Nevertheless, the effectiveness of the policy will depend on how the money is collected and spent. Businesses will want guarantees that the revenue is genuinely used to improve tourism infrastructure rather than simply disappearing into general local authority budgets. Transparency will be essential. If visitors are expected to pay more for accommodation, they should be able to see clear improvements in the destinations they visit. Regional authorities must also consider the economic differences between areas. A popular international tourist city may have a different capacity to introduce additional charges compared with a small seaside town that depends heavily on affordable domestic holidays.

Angela Rayner’s proposal also creates a wider political challenge for the Labour government. The party has promised to improve economic growth, strengthen local government and support working people. However, the introduction of additional tourism charges could create tension between these objectives. Local authorities may welcome greater financial independence, but businesses could argue that the government is transferring financial responsibilities onto visitors and employers without properly considering the consequences. Opposition politicians are likely to use the controversy to question Labour’s commitment to reducing the cost of living and supporting private enterprise.

Ultimately, the government must recognise that tourism is not simply a source of tax revenue. It is an important part of Britain’s economy, supporting employment, investment and communities across the country. A successful tourism industry depends on affordable accommodation, competitive businesses, reliable transport and attractive destinations. Policies that increase costs without delivering visible improvements risk weakening the very industry they are intended to support.

In conclusion, Angela Rayner’s support for a tourist tax has exposed an important disagreement about how Britain should finance local services and encourage economic development. Supporters see the levy as an opportunity to give regional authorities greater financial power and improve tourist destinations. Critics fear that it could increase holiday costs, damage hospitality businesses and threaten thousands of jobs. The government must carefully examine these potential consequences before expanding the scheme. Britain needs policies that encourage people to travel, support local businesses and create employment rather than introduce unnecessary obstacles. If ministers genuinely want to strengthen the economy, they must ensure that taxation does not undermine the businesses responsible for generating growth. The real test of Rayner’s proposal will be whether it delivers measurable improvements to local communities without placing an unreasonable burden on British businesses, workers and holidaymakers.