Labour mayors urged to back VAT cut for struggling pubs and restaurants as a condition of imposing holiday tax as backlash grows over cost to families

See more Daily Mail on Google - save us as a Preferred Source Published: 14:28 EDT, 11 September 2026 | Updated: 14:29 EDT, 11 September 2026 Labour mayors have been told they must back VAT cuts for struggling pubs and restaurants if they want to impose Andy Burnham’s new holiday tax.The party’s 10 regional leaders, who are all expected to use the power given them by the Prime Minister to add 5 per cent to the cost of stays in hotels, B&Bs and holiday lets, were warned that city breaks in England will become far more expensive than those overseas without action.They were urged on Friday by the trade body for hospitality firms to publicly back the campaign to reduce VAT on food, drink and accommodation from 20 per cent to 10 amid a growing backlash against impact of the Overnight Visitor Levy on business as well as families.In a letter to Labour metro mayors, Allen Simpson, Chief Executive of UKHospitality, wrote: ‘You have all said that it is commonplace around the world to have these taxes. But as you know, it is also commonplace for the VAT on holidays to be far lower than in the UK. In France, Spain, Germany, and Italy the VAT is 10 per cent or lower but here we charge a full 20 per cent.‘With this new proposal a family from Bootle visiting Manchester could face a tax burden of around 27 per cent on their hotel stay, but a trip to Berlin would incur only 14.5 per cent.’His comments came after the boss of Butlin’s warned that the Overnight Visitor Levy would make getaways less affordable for poor families as well as damaging businesses.Jon Hendry Pickup, chief executive of the seaside resort chain, said: ‘The Holiday Tax impacts UK people taking a UK break, hitting those who can afford a holiday the least, the hardest. It’s a shame as the new Government showed promise on hospitality relief in its first few weeks but is clearly not listening to business concerns about this tax.‘Big cities may welcome these mayoral powers, but treating every destination and hospitality business the same will leave resorts like ours to shoulder the burden.’ Attractions at Butlin's holiday camp in Minehead, SomersetTory leader Kemi Badenoch, who visited the Bayeux Tapestry in London, said: ‘It is so depressing that at the same time as we’re celebrating this brilliant cultural moment, Andy Burnham is levelling a Tourist Tax that will make it more expensive for families to spend a weekend away visiting great attractions like the British Museum.’Even the Government’s own report on the levy admitted there are fears over prices especially during school holidays.It said: ‘The Government recognises concerns raised by respondents about affordability, including during peak travel periods when accommodation prices may increase through seasonal or dynamic pricing.’However it insisted that introducing a percentage rate rather than a flat fee was fairer.The Transport Secretary was challenged about the claim that the holiday tax hits poorer families the hardest - but insisted it was a matter for regional mayors rather than the Government.Heidi Alexander told Times Radio: ‘This is not about a national tax. It's about giving mayors and leaders in foundational strategic authorities the ability to levy a small amount of money on visitors to popular cities.’She said that in London, Labour mayor Lord Khan would be able to use the revenue from the tax to improve the public transport system.