Nigel Huddleston is shadow DCMS secretary of state and Conservative MP for Droitwich and Evesham
I’m not sure what this government has got against the tourism and hospitality sectors, but they have been singled out for particularly pernicious treatment by Labour.
Last week’s highly targeted and temporary VAT reductions for some specific sub-sectors were a drop in the ocean compared to the damage done to the entire industry by Rachel Reeves’ previous policy announcements. It was classic Labour: giving with one hand, while taking with the other. A few tens of millions in VAT reductions (which may or may not be passed on to the end consumer) is nothing compared to the £3.4 billion of additional costs already imposed by the government on the hospitality sector.
And given how it is splurging cash elsewhere, it is astonishing that the government has decided to cut spending on domestic and international tourism marketing. Both inbound and domestic tourism are being damaged by this government.
It was particularly galling to be in the House of Commons last week, listening to the Chancellor telling us how well she is running the economy – and expecting gratitude and praise for measures she was taking to ‘support our hospitality sector’. Who is she kidding? You don’t express gratitude to the school bully who punches you in the face, smacks you to the ground, gives you a good kicking and then extends a hand to help you up!
As I have said many times before, Rachel Reeves will go down in history as the destroyer of jobs and no sectors are feeling her impact more than tourism and hospitality.
Since Rachel Reeves’ first budget, about half of all jobs lost have been in the hospitality and tourism sectors – that’s more than 100,000 jobs. Never mind about the tens of thousands more that have never been created in the first place.
Labour’s National Insurance increases, particularly the threshold changes, inflation-busting minimum wage increases and business rate hikes have all disproportionately and negatively impacted tourism and hospitality which covers everything from pubs, bars and restaurants to theme parks, B&Bs and holiday parks. It takes a lot of extra pints, sandwiches or room nights to cover the additional £2,500 cost of hiring a full time member of staff thanks to Labour’s jobs tax.
Tourism and hospitality are meant to be the fun sectors. They bring joy to millions of people every year. They are core to our culture and society at large, but they are not ‘nice to haves’ – they are vitally important to our economy and all too often undervalued. In many constituencies tourism and hospitality is the biggest industry and the biggest employer.
Hospitality directly supports around 2.7 million jobs; indirectly it sustains hundreds of thousands more. Importantly, the sector contributes over £54 billion in gross tax receipts. Inbound tourism alone generates over £30 billion in export revenue each year – as people come to the UK from around the world to experience our beautiful countryside, arts and culture, heritage and world-class hospitality. That’s greater export revenue than defence or the pharmaceutical industry.
But tourism and hospitality businesses are not like many other parts of the economy. It is a very fragmented industry. There are over 175,000 businesses in the UK in accommodation and food services alone. Over 99 per cent of these are small and medium-sized enterprises (SMEs). Many are family run. They generally operate at low margins, serving often very price sensitive customers. They employ large numbers of young people, part-time and seasonal workers, and those taking their first step into work. That is exactly why Labour’s jobs tax has hit them so hard.
Labour says it wants to tackle youth unemployment, but its own policies are making it harder for businesses to give young people their first job. Their recent announcements of subsidies for employing young people in hospitality wouldn’t be necessary if they hadn’t done so much damage to the sector in the first place.
The latest ONS figures underline the scale of the problem. Youth unemployment among 16 to 24-year-olds has risen to 16.2 per cent, its highest level since January 2015 – notably higher than during and following the pandemic. Overall unemployment also rose to 5 per cent in January to March 2026. Job losses and youth unemployment are the inevitable, expected and entirely predictable consequence of Labour’s anti-business policies. The only people who seem surprised are the BBC and the Labour party.
But not content with sabotaging tourism and hospitality through the uneven impact of broader policies on tax and business rates, the government in their infinite wisdom have decided that the way to best help the tourism sector is to tax it more, with the implementation of a so-called visitor levy – aka ‘tourism tax’ or ‘bed tax’ – to be introduced at the discretion of local Mayors.
Depending on how it is structured, a levy could add an additional £50 to the cost of a one week family holiday. UKHospitality polling found that 57 per cent of people said a £50 increase would put them off taking a holiday in England. Nearly three quarters said the tax would either reduce the number of trips they take, reduce what they spend while away, or stop them holidaying in England altogether.
There is also no guarantee that money raised through such a levy would be reinvested directly into tourism promotion, local infrastructure or support for the visitor economy. In other countries where tourism taxes exist, they are often accompanied by permanent lower VAT rates on hospitality and tourism. There is huge concern about scope creep and rate increases.
Oxford Economics modelling suggests that a five per cent levy on overnight stays could, by 2030, reduce GDP by £2.2 billion, reduce tourism spending by £1.8 billion, lead to 33,000 job losses and result in 11.9 million fewer overnight stays.
It has been disheartening travelling around the country over the last few months listening to people who have spent their lives in the tourism sector who tell me they are giving up – not because there isn’t demand for their product, but because they just can’t make the numbers add up anymore.
There is an alternative. A pro-business, low regulation, Conservative alternative. The vast majority of businesses in the hospitality and leisure space would benefit from our policy of 100 per cent business rates relief for retail, hospitality and leisure businesses. Our plan would benefit 250,000 businesses and cover bills up to £110,000; a far more comprehensive initiative than Labour’s temporary and narrowly targeted VAT reduction, and a permanent offer to these important sectors.
We are the only pro-business party left in British politics. We understand that supporting business reduces demands on public services. And you can only have decent public services if you have a vibrant private sector generating the taxes to pay for them.
We have a world-class tourism and hospitality offering and compared to many other sectors it is relatively AI future-proofed because it relies so heavily on human interaction and physical experiences. As our tourism marketing slogan states: Britain is Great. But it will be even greater when the socialists are out and the Conservatives are back in charge.
Nigel Huddleston is shadow DCMS secretary of state and Conservative MP for Droitwich and Evesham
I’m not sure what this government has got against the tourism and hospitality sectors, but they have been singled out for particularly pernicious treatment by Labour.
Last week’s highly targeted and temporary VAT reductions for some specific sub-sectors were a drop in the ocean compared to the damage done to the entire industry by Rachel Reeves’ previous policy announcements. It was classic Labour: giving with one hand, while taking with the other. A few tens of millions in VAT reductions (which may or may not be passed on to the end consumer) is nothing compared to the £3.4 billion of additional costs already imposed by the government on the hospitality sector.
And given how it is splurging cash elsewhere, it is astonishing that the government has decided to cut spending on domestic and international tourism marketing. Both inbound and domestic tourism are being damaged by this government.
It was particularly galling to be in the House of Commons last week, listening to the Chancellor telling us how well she is running the economy – and expecting gratitude and praise for measures she was taking to ‘support our hospitality sector’. Who is she kidding? You don’t express gratitude to the school bully who punches you in the face, smacks you to the ground, gives you a good kicking and then extends a hand to help you up!
As I have said many times before, Rachel Reeves will go down in history as the destroyer of jobs and no sectors are feeling her impact more than tourism and hospitality.
Since Rachel Reeves’ first budget, about half of all jobs lost have been in the hospitality and tourism sectors – that’s more than 100,000 jobs. Never mind about the tens of thousands more that have never been created in the first place.
Labour’s National Insurance increases, particularly the threshold changes, inflation-busting minimum wage increases and business rate hikes have all disproportionately and negatively impacted tourism and hospitality which covers everything from pubs, bars and restaurants to theme parks, B&Bs and holiday parks. It takes a lot of extra pints, sandwiches or room nights to cover the additional £2,500 cost of hiring a full time member of staff thanks to Labour’s jobs tax.
Tourism and hospitality are meant to be the fun sectors. They bring joy to millions of people every year. They are core to our culture and society at large, but they are not ‘nice to haves’ – they are vitally important to our economy and all too often undervalued. In many constituencies tourism and hospitality is the biggest industry and the biggest employer.
Hospitality directly supports around 2.7 million jobs; indirectly it sustains hundreds of thousands more. Importantly, the sector contributes over £54 billion in gross tax receipts. Inbound tourism alone generates over £30 billion in export revenue each year – as people come to the UK from around the world to experience our beautiful countryside, arts and culture, heritage and world-class hospitality. That’s greater export revenue than defence or the pharmaceutical industry.
But tourism and hospitality businesses are not like many other parts of the economy. It is a very fragmented industry. There are over 175,000 businesses in the UK in accommodation and food services alone. Over 99 per cent of these are small and medium-sized enterprises (SMEs). Many are family run. They generally operate at low margins, serving often very price sensitive customers. They employ large numbers of young people, part-time and seasonal workers, and those taking their first step into work. That is exactly why Labour’s jobs tax has hit them so hard.
Labour says it wants to tackle youth unemployment, but its own policies are making it harder for businesses to give young people their first job. Their recent announcements of subsidies for employing young people in hospitality wouldn’t be necessary if they hadn’t done so much damage to the sector in the first place.
The latest ONS figures underline the scale of the problem. Youth unemployment among 16 to 24-year-olds has risen to 16.2 per cent, its highest level since January 2015 – notably higher than during and following the pandemic. Overall unemployment also rose to 5 per cent in January to March 2026. Job losses and youth unemployment are the inevitable, expected and entirely predictable consequence of Labour’s anti-business policies. The only people who seem surprised are the BBC and the Labour party.
But not content with sabotaging tourism and hospitality through the uneven impact of broader policies on tax and business rates, the government in their infinite wisdom have decided that the way to best help the tourism sector is to tax it more, with the implementation of a so-called visitor levy – aka ‘tourism tax’ or ‘bed tax’ – to be introduced at the discretion of local Mayors.
Depending on how it is structured, a levy could add an additional £50 to the cost of a one week family holiday. UKHospitality polling found that 57 per cent of people said a £50 increase would put them off taking a holiday in England. Nearly three quarters said the tax would either reduce the number of trips they take, reduce what they spend while away, or stop them holidaying in England altogether.
There is also no guarantee that money raised through such a levy would be reinvested directly into tourism promotion, local infrastructure or support for the visitor economy. In other countries where tourism taxes exist, they are often accompanied by permanent lower VAT rates on hospitality and tourism. There is huge concern about scope creep and rate increases.
Oxford Economics modelling suggests that a five per cent levy on overnight stays could, by 2030, reduce GDP by £2.2 billion, reduce tourism spending by £1.8 billion, lead to 33,000 job losses and result in 11.9 million fewer overnight stays.
It has been disheartening travelling around the country over the last few months listening to people who have spent their lives in the tourism sector who tell me they are giving up – not because there isn’t demand for their product, but because they just can’t make the numbers add up anymore.
There is an alternative. A pro-business, low regulation, Conservative alternative. The vast majority of businesses in the hospitality and leisure space would benefit from our policy of 100 per cent business rates relief for retail, hospitality and leisure businesses. Our plan would benefit 250,000 businesses and cover bills up to £110,000; a far more comprehensive initiative than Labour’s temporary and narrowly targeted VAT reduction, and a permanent offer to these important sectors.
We are the only pro-business party left in British politics. We understand that supporting business reduces demands on public services. And you can only have decent public services if you have a vibrant private sector generating the taxes to pay for them.
We have a world-class tourism and hospitality offering and compared to many other sectors it is relatively AI future-proofed because it relies so heavily on human interaction and physical experiences. As our tourism marketing slogan states: Britain is Great. But it will be even greater when the socialists are out and the Conservatives are back in charge.