The Deputy Prime Minister and Chancellor are at odds over a proposed tourist tax aimed at funding local authorities. Angela Rayner supports the tax on hotel stays, while Treasury officials express concerns about its negative impact on the hospitality sector. Mayor Sadiq Khan argues tourists are willing to pay a small tax to enhance public amenities, benefiting both tourism and local residents. However, Shadow Chancellor Mel Stride criticizes Labour's inclination towards increased taxes, indicating that recent proposals could further burden the hospitality industry. A government source suggests the Chancellor prefers immediate solutions without constitutional changes.
Sadiq Khan stated that tourists "don't mind" paying a small tax as it is common in many European cities, believing it could enhance the public realm.
Khan emphasized that additional funds could improve public amenities, thereby boosting tourism while also enhancing resident quality of life in London.
Shadow Chancellor Mel Stride criticized Labour, stating their tendency is always toward increased taxation, citing a recent jobs tax and the proposed tourist tax.
A government source revealed that the Chancellor prefers "quick wins" over complex constitutional changes, indicating political urgency in decision-making.
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