MIGRANT hotels housing asylum seekers will be exempt from Labour’s tourist tax as they are classed as “temporary accommodation”.
The exemption has stoked fears that hotels may decide to ditch paying guests and instead house migrants for the Home Office at a cheaper price.
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Andy Burnham announced plans to let England’s 14 regional mayors impose an uncapped levy on overnight stays, on Wednesday.
The move sparked fury as it was revealed local leaders would likely slap the overnight levy on hard-working families staying in hotels, B&Bs and holiday lets.
However, taxpayer funded asylum hotels will not be subject to the tax, the Department for Housing, Communities and Local Government said.
The Conservatives were quick to slam the decision as “outrageous” as officials said the tax will hit hard-working families most.
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Sources in the hospitality industry added that this may encourage more hotels to offer themselves up for asylum seekers rather than holidaymakers.
Chris Philp, the shadow home secretary, said: “It is utterly outrageous that families saving up for a break and struggling hospitality businesses will be hit with another tax, while hotels being used to accommodate illegal immigrants are exempt.
“British taxpayers should not be treated as a cash machine as asylum hotels get special treatment.
“Labour must explain why they think ordinary families should pay this tax but the asylum system should not. The answer is not another stealth tax on British families.
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“We need to deport all illegal immigrants which would allow us to end the farcical hotel use entirely.”
James Cleverly, the former shadow housing minister, now running to be London’s next mayor, told The Telegraph it was a “perverse policy”.
He added: “Tourists spend money in the local economy, help keep our towns and cities vibrant and boost our prosperity. We should be encouraging them to come, not taxing them for the privilege.”
This follows estimations that UK families might have to add hundreds of pounds onto the cost of their staycations.
Trade group UKHospitality estimated the tax would add £99 to a week trip to London and £198 to the cost of a family summer holiday.
Meanwhile, school trips could also be subject to the levy unless local leaders choose to exempt accommodation used for “educational purposes”.
Business travellers would also be caught by the charge.
The Sun has been campaigning to Stop The Holiday Tax, warning it risks pricing hard-working families out of precious staycations.
We have urged the Government to ditch the plans amid fears they could hammer seaside towns and encourage Brits to holiday abroad instead.
The Telegraph reported that hospitality bosses were stunned after being briefed that England would follow the Scottish model, where there is technically no upper limit on the levy.
Industry chiefs had reportedly expected safeguards on how much local leaders could charge.
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The chief executive of one leading hospitality firm said: “There will be a jobs bloodbath at a time when they’re trying to get young people into work.”
More than 100,000 hospitality jobs have disappeared since Labour came to power.