Former United States president Ronald Reagan once said: “Government’s view of the economy could be summed up in a few short phrases: if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.”
Both the Labour Government and Sir Sadiq Khan have taken his warning as an instruction manual.
Across the UK, more than 100,000 hospitality jobs have been lost since Labour formed a government in July 2024.
Meanwhile, far from coincidentally, the number of young people aged 16 to 24 who are Neets (Not in Education, Employment or Training) has surged to between 980 thousand and a million.
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If you think those statistics are a good thing (or if you are the Mayor of London) then you will no doubt be delighted that the Government has found a way to make a bad problem worse.
When tax is increased on cigarettes, this reduces (legal) sales of cigarettes.
When tax is increased on employment, it cuts the number of people in work and the amount of individuals who are employed will do.
So if the Government and Sir Sadiq want to reduce tourism, then a tax is a very effective way to do so.
If, however, they want to boost tourism, then increasing the cost to visit London would be a disastrous mistake.
Sir Sadiq promised: “I will work closely with London’s boroughs, accommodation providers, hospitality and tourism businesses and other partners before final decisions are taken.”
If London’s accommodation providers and tourism businesses tell the Mayor raising employers’ National Insurance contributions from 13.8 per cent to 15 per cent and lowering the threshold from £9,100 to £5,000 has been a disaster for businesses and further increasing taxes would be a huge mistake, is there any chance Sir Sadiq will listen?
A five per cent tourist tax would add £11.50 a night onto the average London hotel bill.
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Sir Sadiq is fond of claiming London is a great international city – and, of course, he is right – but if he genuinely believed that, then he would recognise we are in competition with other cities around the world and imposing additional charges for those considering visiting our city damages the capital and helps those cities competing with the city.
London, Londoners and London’s businesses are already overburdened by excessive taxation.
After more than a decade of Sir Sadiq’s mayoralty and two painful years of a Labour Government, London has already been squeezed enough.
Instead of increasing that burden, London needs a mayor with an obsessive focus on finding ways to reduce it.
In his 2024 manifesto, Sir Sadiq did not mention a tourist tax, but he did claim that the mayoral election could “be the first step toward a decade of national renewal”, and, in reference to the prospect of being mayor under a Labour Government, he wrote he was “excited about what we can achieve together”.
There are 602 days until the next mayoral election.
Unless Prime Minister Andy Burnham decides to call an election before the teetering economy collapses, Londoners will have to suffer another 86 weeks of a disastrous Labour Government working hand-in-glove with a disastrous Labour mayor.
The tourist tax will be a huge mistake, but there are many more mistakes yet to come.
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