Lib Dem leader warns of tax bombshell for tourism

Sir Ed appears at the end of the pier

Lib Dem leader Sir Ed Davey has been in Devon visiting tourism businesses and campaigning for the government to scrap its plans to raise employers' national insurance contributions.

Days after Labour confirmed Devon County Council elections will go ahead in May, Sir Ed claims the south west's tourism industry is facing an unsustainable tax bombshell, hitting the region’s hospitality sector with nearly £390 million in extra tax over the next five years.

He's played arcade games and crazy golf at Paignton Pier Leisure, before talking to Radio Exe at the Chippy there, along with Torbay MP Steve Darling.

Mr Darling has tabled an early day motion in parliament about the role tourism plays in Devon’s economy and to recognise the strain this national insurance hike will have for businesses.

The Lib Dems says seasonal work patterns means that staff earn most of their income in the first six months of the year, quickly surpassing the national insurance threshold leading to higher employer contributions as theirs are not spread evenly over salaries across 12 months. There is currently no provision in the national insurance rise to guard against this for seasonal businesses. 

Paignton Pier said that it may have to limit opening hours in off-peak months and could reduce opportunities for employment in the winter months.

The Liberal Democrats are calling on the government to exempt the hospitality sector from the national insurance rise to protect businesses like these. 

Lib Dem MPs Steve Darling and Sir Ed Davey believe tourism businesses will shoulder the tax burden (Image: Finlay Aston/Radio Exe)

Sir Ed said: “Local businesses like these are the beating heart of our communities, but many are struggling after years of Conservative economic vandalism. This jobs tax would hammer them again, hitting growth and putting hundreds of thousands of jobs at risk.

“To get our economy growing strongly, the government should be helping our hospitality sector, not hurting it. Instead of ploughing ahead with this misguided tax hike, the chancellor needs to listen to local businesses and scrap it now.”

Liberal Democrat MP for Torbay, Steve Darling said:  “Tourism is the lifeblood of many communities across the South West, we seriously cannot afford to underestimate the vital role of this industry across the region, especially here in the English Riviera. 

“Not only does it bolster our economy and generate jobs for young people, but these businesses give joy to so many people, those living locally in Torbay and visitors from all around the country.

Jenny the Labrador helps Sir Ed Davey and Steve Darling on the arcade games (image courtesy: Finlay Aston/Radio Exe)

“This national insurance hike is incredibly ill-judged. After years of having to struggle through the Conservatives’ mismanagement of the economy and suffering through Covid closures, the last thing the tourism industry needed was an eye-watering tax bill. 

“Unless the Chancellor listens to the Liberal Democrats, this could be the nail in the coffin for family-run tourism businesses who are already struggling to stay afloat. Without urgent action, our once vibrant communities risk turning into ghost towns.”