PATRICK DARDIS: Burnham's new holiday tax is delusional, unforgivable and, for many in the hospitality trade, unsurvivable

Burnham is not only the name of our new, though unelected, Prime Minister. It also happens to be a typical English seaside town, with a pier, ice cream stalls and bucket-and-spade shops – the epitome of the traditional UK holiday resort.

And it is where I was yesterday when I heard the news of Labour’s unforgivable ‘overnight visitor levy’, an unlimited tax on tourism that will cause untold misery in Somerset’s Burnham-on-Sea and countless other places across the country.

The damage this tax will wreak is disastrous. The trade organisation UK Hospitality warns that it could add between £100 and £120 to the cost of a typical family holiday in Britain and wipe out 33,000 jobs, sucking £2 billion from the economy.

Crushing 

I fear the reality will be even worse than that. The hospitality industry is already burdened by additional national insurance contributions, the increased living wage and outrageous business rates. This new blow will be crushing.

It also threatens vulnerable communities, at a time when the spiralling cost-of-living crisis, soaring energy bills and national anxiety over immigration are already tearing the fabric of our country apart.

The proposal, which was first floated by Keir Starmer’s government last November, is even nastier than it first appeared. The details, confirmed by Housing Secretary Angela Rayner at No 10 North yesterday, are alarming.

Local mayors and councils are to be granted powers to impose their own nightly taxes on all visitors, from abroad or this country, as a percentage of the cost of accommodation – whether that’s in a hotel, inn, bed-and-breakfast, campsite, Airbnb or any other type of place.

Worse, each area is to set their own uncapped percentage. A figure of 5 per cent has been widely mooted, but that will be only the start. It could rise to 10, 20, even 25 per cent – and there’s no reason why it won’t, because one of the basic laws of taxation is that councils will always take as much as they can… and still, as in the cases of Croydon and Birmingham, go bankrupt.

Burnham-on-Sea: A typical English seaside town, with a pier, ice cream stalls and bucket-and-spade shops

In one stroke, hospitality businesses – from large hotel chains to small B&Bs – are now at the mercy of the notoriously voracious tax-grabbing appetites of local authorities.

Incredibly, the percentage will be calculated after VAT has been applied at 20 per cent (a tax, by the way, that was just 8 per cent at its inception in the 1970s). This means visitors will be taxed on the tax they already pay. It is truly shameless.

Andy Burnham is incapable of seeing the big picture. He introduced a £1-a-night visitor tax in Manchester, and the economy absorbed it. But there’s a world of difference between a quid-a-head and an unlimited, pick-your-own-price percentage.

The scheme has already been tried in Scotland, where the effect was so immediately damaging that five councils have had to put the tax on hold.

Scottish Ballet, for example, had to cancel a string of shows because they could no longer afford to put their staff up in hotels.

Put simply, I cannot conceive of any tax more inimical to economic growth. A tourist tax not only drives away foreign visitors but also makes holidays at home unaffordable for millions of British families.

Take Burnham-on-Sea, with a population of 20,000 and unemployment levels below the UK average, at 3.6 per cent compared to 4.2 per cent nationally.

Its 200 shops and independent businesses are heavily reliant on seasonal trade, like countless similar coastal resorts.

According to the town council’s latest figures, it has more static caravans than almost anywhere in Europe. More than 930,000 people visit for at least a day annually, bringing in tens of millions of pounds, bolstering the local economy.

Yet the average visitor is not well off, a fact reflected in the comparatively low spend per head. In 2014, that was £31.50 each, and despite inflation I’m willing to hazard a bet that it hasn’t risen much in the intervening decade.

Take £100 out of their weekly budget and many will be forced to abandon their holiday altogether.

It’s appalling but not surprising that Labour cannot see all this. They have become the party of the privileged, the kind of people who can always find an extra couple of hundred quid for a holiday.

To people like Angela Rayner, who notoriously underpaid stamp duty when she bought an £800,000 second home in Brighton, our seaside towns are the place to splash the cash and enjoy overpriced cocktails – not to eke out the pennies so that the children can have an ice cream cone every day.

Patrick Dardis: hospitality businesses are now at the mercy of the notoriously voracious tax-grabbing appetites of local authorities

Ignored

And it is not only holidaymakers. Several corporate travel bodies, including the Global Business Travel Association and the Institute of Travel Management, demanded earlier this year that people visiting for the purposes of work should be exempted from the scheme.

It appears their call has been ignored, and in any case it is difficult to see how an exemption could be applied. The result is that the cost of conferences, sales trips and all kinds of work events will increase – yet another blow to British businesses, and one that will depress the economy further.

Of course, it will push up the cost of weddings and Christmas. Perhaps most pernicious of all, councils will tax people travelling from all over the country to be with family members at sadder occasions.

Those visiting relatives in care homes or coming for funerals will still have to pay the levy.

By deterring visitors and sucking money directly out of the wallets of those who do continue to come, this tax is the proverbial double whammy, a left-and-uppercut combination to all the businesses that are hanging on by their fingertips.

Growth

As I drive around the country, I see so many roadside pubs boarded up, some of them former members of the Young’s family, businesses I knew well when I was the company’s CEO. It breaks my heart to see this decline.

Those pubs represented a living for the people who ran them and worked in them, and also for the extended community whose families relied on them and whose businesses were fed by them – the suppliers, the cleaners, the contractors, the repair firms, the High Street shops and salons, and many more.

Once those jobs are gone, it’s almost impossible to put them back. Stagnation sets in and condemns entire towns to life on welfare for generations.

Chancellor John Healey talks about the importance of economic growth, and he’s right to identify it as the only way we can end this cycle of national decline.

But he doesn’t understand the basic fact that tax destroys growth.

The Treasury will ultimately get less income as a consequence. This is the folly of their policies: they think they’re going to raise revenue when, in fact, they’re driving it backwards.

It’s delusional.

For Andy Burnham, yesterday’s announcement marked the end of his honeymoon period as PM. Labour is sucking every bit of hope out of small British businesses.

It’s unforgivable. For many, I fear it will also prove unsurvivable.