'Disgrace!' Labour mayors plan to push on with tourist tax despite urgent 'bloodbath' warning

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'It's really a disgrace. They talk about growth, and all they do is attack business,' one top hotelier said

Labour mayors across England are preparing to push ahead with a new tourist tax despite stark warnings it could trigger a jobs "bloodbath" in the hospitality industry.

Every Labour-run mayoral authority is expected to adopt the overnight visitor levy, which will allow local leaders to impose an additional charge on hotels, bed and breakfasts and holiday lets.

London Mayor Lord Khan, Liverpool's Steve Rotheram and North East Mayor Kim McGuinness are among the Labour mayors expected to use the new tax-raising powers.

Labour metro mayors have said a five per cent ceiling on the levy would be "reasonable" while still allowing them to raise money for their regional coffers.

But UKHospitality estimates a five per cent charge could add £99 to the cost of a London hotel stay for just one week, and £198 for a fortnight's break.

The trade body has warned that replicating a five per cent levy across England could amount to a £1.6billion hit to the hospitality industry.

"There will be a jobs bloodbath at a time when they're trying to get young people into work," the chief executive of a major hospitality company told The Telegraph.

More than 100,000 hospitality jobs have already been lost since Labour came to power in 2024, while businesses have faced higher employment costs, minimum wage rises and increased business rates.

Sir Rocco Forte, chairman of the luxury hotel group behind Brown's Hotel in London and The Balmoral in Edinburgh, said: "It's really a disgrace. They talk about growth, and all they do is attack business."

JD Wetherspoon founder Sir Tim Martin, whose company operates dozens of hotels alongside its pub estate, warned the additional costs would ultimately be passed on to guests.

Sir Tim said: "It's really more of the same increased costs which will inevitably be passed on to customers."

Butlin's boss Jon Hendry Pickup has also accused ministers of ignoring businesses, warning the levy would hit "the very working people this Government claims to represent".

The tax will be charged as a percentage of the nightly cost of accommodation and will affect domestic holidaymakers and business travellers as well as foreign tourists.

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Angela Rayner announced the new powers, saying the levy would give local leaders "the choice to raise and reinvest funding where it's needed most".

However, Conservative and Reform UK mayors have rejected the prospect of introducing the charge in their areas.

Tory Tees Valley Mayor Lord Houchen said: "You can't tax your way to growth, and we shouldn't be using devolution as an excuse to take even more of people's hard earned money."

Reform UK's Greater Lincolnshire Mayor Dame Andrea Jenkyns has also pledged to reject the tax, telling businesses: "I've got your back."

Opposition has even emerged from within Labour's own ranks, with South Shields MP Emma Lewell branding the policy "anti-growth".

Ms Lewell said: "I am really sad about this it's anti-growth and comes at the worst time for hospitality."

She added: "Devolution is not the answer to all the country's problems. It's actually going to end up costing us more in the long run."

Lord Khan has "strongly" welcomed the new powers but said the hospitality industry would be consulted before the tax was introduced, adding that progress was needed "sooner rather than later".

Conservative leader Kemi Badenoch said: "Labour's answer to everything? Tax more. Hotels already face 20 per cent VAT. Now, they'll face VAT on Labour's new tourism tax too."

The Federation of Small Businesses has also attacked the plans, with Craig Beaumont warning: "The political reality here is that visitors do not have votes, and now have a fund-raising target on their backs."