Andy Burnham’s devolution plan is an excuse to pile local taxes on top of national ones (Image: Getty)

Under his big devolution plan, the new PM will hand more power from Westminster to regional mayors and local leaders, giving them greater control over jobs, transport, housing, skills and public services. Burnham says this will put communities in the driving seat and create that growth. Which sounds nice in theory. But the reality is turning out to be very different. There’s no guarantee that handing new powers to mayors will create growth. It’s just an excuse to tax us more.

Burnham has just given mayors the power to impose a new Overnight Visitor Levy on hotel accommodation. Families could now pay an extra £99 for a week-long break in London, or £198 for a summer holiday, according to trade group UKHospitality. This won’t generate growth but destroy it, as disgruntled tourists arrive with less to spend or simply stay at home. This tax will hit British hotels and all the towns that rely on money brought in by outsiders passing through. Your next staycation just got more expensive. And where will the money go? Into local authority coffers.

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Once introduced, the only way to avoid the tourist tax is to stay at home. Some may prefer to travel abroad, but Labour has already thought of that by hiking Air Passenger Duty to make our foreign holidays more expensive too.

Labour mayors across England have indicated they’ll voluntarily limit the levy to 5%. Don’t fall for that. History tells us that once governments introduce a tax, it never goes away. Then the rate creeps up.

Let’s take just one example. When Air Passenger Duty was introduced in 1994, it added £5 to short-haul European flights and £10 to long-haul ones. Today, cattle class passengers pay £15 to go to Europe, or £32 for standard rate seats. For the US, the figures are £102 and £244 respectively. Heaven knows how high this new tourist tax will go.

This tax will hit profits at already struggling hotels, along with the pubs, restaurants and other attractions that rely on visitors. Burnham has ignored warnings of a “jobs bloodbath” across the hospitality sector.

Hotels already charge VAT, while hotel businesses face a raft of other taxes, including Rachel Reeves’s stupid and destructive jobs tax. Now Burnham has added yet another layer.

As Burnham reminded us this week, the one thing that’s sacred in his world is social security spending. We might as well all stay in bed. Our own. Unless he taxes that next.

Andy Burnham’s Big Idea and the Debate Over Its Cost

Andy Burnham has built his political career around the argument that Britain needs a stronger and more active state. His approach has generally emphasised public services, regional investment, social protection and greater government involvement in the economy. One of the latest controversies surrounding his government concerns a major policy proposal that supporters describe as an attempt to improve public services and living standards, while critics argue that it could eventually place a greater financial burden on taxpayers. The headline claim that “we’re all about to be rinsed again” is therefore a political interpretation rather than an established fact. The more important question is how Burnham’s proposed policy would be financed, who would benefit from it and who would ultimately bear its costs.

The debate over public spending is particularly important because the British government faces competing demands across almost every major area of policy. Healthcare requires significant investment, local authorities face financial pressures, infrastructure needs improvement and the welfare system represents a substantial part of government expenditure. At the same time, the government must manage borrowing and debt-servicing costs. Any major new programme therefore creates a question about priorities and financing.

Burnham’s political philosophy has traditionally placed considerable importance on government intervention. During his time as Mayor of Greater Manchester, he promoted policies involving transport, housing, employment and regional development. His supporters have argued that national government has historically been too concentrated on London and the South East, while regions such as northern England have not received sufficient investment. His approach has consequently been associated with the idea of giving local and regional institutions greater power over economic decisions.

Devolution is an important part of this argument. Supporters of greater regional autonomy believe that decisions about transport, housing and economic development can sometimes be made more effectively by people who understand local conditions. Instead of Whitehall determining every major investment decision, local government can identify its own priorities. Greater Manchester has been one of the most prominent examples of this approach.

However, devolution does not automatically mean lower public expenditure. If local authorities receive new responsibilities, they also need sufficient financial resources to carry them out. This raises a fundamental question about the relationship between political decentralisation and taxation. Giving regions more authority may improve accountability, but taxpayers may still have to finance the additional services through national or local taxation.

This is one reason why Burnham’s “big idea” has generated controversy. Political promises can sound attractive when described in terms of improved services, better infrastructure or greater opportunities. The difficult part is determining how those promises will be paid for. A government can finance additional spending through taxation, borrowing, economic growth, efficiency savings or reductions in other areas. Each option has consequences.

Taxation is the most direct way of financing permanent increases in government spending. If taxes are raised, households and businesses have less disposable income. Supporters of higher taxes may argue that the additional revenue is necessary to maintain public services and reduce inequality. Critics may argue that excessive taxation can discourage investment, employment or entrepreneurship. The actual effect depends on which taxes are increased, how much they rise and how the additional revenue is spent.

Borrowing creates a different problem. Government borrowing allows investment to take place without immediately increasing taxes, but borrowed money must eventually be repaid and normally generates interest costs. If borrowing remains high for an extended period, debt-servicing costs can consume resources that might otherwise be spent on public services. This is particularly relevant when interest rates are high.

Economic growth is another possible source of funding. If government policies increase productivity and employment, tax revenues can rise without tax rates necessarily increasing. This is one reason why Burnham and other politicians often emphasise investment. Spending on infrastructure, education, housing or transport can potentially increase economic activity over the longer term.

The difficulty is that the benefits of investment are uncertain and often take years to appear. A new transport system, for example, may eventually improve productivity and employment, but it requires substantial expenditure before those benefits can be measured. Governments therefore have to distinguish between investment that is likely to generate long-term economic benefits and spending that simply creates additional recurring costs.

This distinction is particularly relevant to public services. Spending more money on healthcare can improve capacity and reduce waiting times, but healthcare systems also require permanent staff and ongoing operational expenditure. Once a new service is introduced, withdrawing it later can be politically and practically difficult. A government therefore needs to consider not only the initial cost of a policy but also its long-term annual cost.

The phrase “we’re all about to be rinsed again” reflects the concern that taxpayers may ultimately pay for ambitious government programmes. Yet this interpretation should not be treated as an established outcome. Whether taxpayers pay more depends on the precise policy, its funding mechanism and the government’s wider fiscal decisions. A programme could theoretically be funded partly through savings elsewhere or through additional economic growth.

Another important question is distribution. Government spending and taxation affect different groups differently. A policy may increase taxes on higher-income households while providing additional benefits to lower-income households. Alternatively, a universal programme may provide assistance to everyone regardless of income. Consequently, analysing whether a policy is “expensive” is not enough. It is also necessary to examine who pays and who receives the benefits.

Burnham’s supporters could argue that investment in public services represents a form of economic and social infrastructure. Good healthcare can keep people in work, reliable transport can improve access to jobs, and affordable housing can reduce financial pressure on families. From this perspective, government spending should not be evaluated solely as a cost. Some expenditure may produce economic benefits that partially offset its initial price.

Critics can respond that governments frequently overestimate the benefits of major programmes. Large infrastructure projects can experience delays and cost overruns, while public-sector reforms may fail to deliver the anticipated savings. If a government commits itself to ambitious spending without realistic estimates, taxpayers may eventually face higher taxes or reduced spending elsewhere.

The question of accountability is therefore essential. If Burnham’s government introduces a major programme, voters should be able to see its objectives, estimated cost, funding mechanism and expected results. Transparent budgeting allows the public to evaluate whether the policy is delivering what was promised. It also makes it easier for Parliament, independent institutions and the media to scrutinise government decisions.

The role of independent fiscal institutions is particularly important in this context. Bodies such as the Office for Budget Responsibility provide assessments of the government’s economic and fiscal plans. Their forecasts cannot predict the future with certainty, but they provide an independent framework for assessing borrowing, taxation and spending. Major policies should therefore be considered alongside credible fiscal projections rather than political promises alone.

The controversy also highlights the difference between short-term political popularity and long-term sustainability. A government can gain support by promising more generous services or lower costs, but these promises have to be reconciled with the available resources. If expenditure grows faster than the economy’s ability to finance it, difficult decisions eventually become unavoidable.

At the same time, fiscal discipline should not mean that governments never spend money. Underinvestment can also be expensive. Poor infrastructure, inadequate housing and deteriorating public services can create costs for the economy over time. The challenge is to identify spending that produces sufficient social or economic benefits to justify its cost.

Burnham’s approach can therefore be understood as an argument about the appropriate role of government. Those who support his policies tend to place greater emphasis on collective provision and public investment. Those who criticise them may place greater emphasis on lower taxation, individual responsibility and limiting the size of the state. Neither philosophy automatically provides an answer to every individual policy question.

The debate becomes even more complicated because Britain has regional inequalities. Wealth, productivity, wages, housing costs and access to public services vary significantly between different parts of the country. A policy that costs money nationally may nevertheless be intended to address inequalities that market forces have not resolved. Regional investment can therefore be justified not only as social policy but also as an attempt to improve national productivity.

Ultimately, the success of Burnham’s “big idea” would depend on implementation rather than rhetoric. A policy can have an attractive objective but still fail if it is poorly designed or excessively expensive. Conversely, a costly policy may be justified if it delivers substantial improvements in productivity, public services or living standards.

The central issue for taxpayers is therefore not simply whether Burnham is proposing to spend more money. It is whether the government can demonstrate that the benefits of additional expenditure justify its financial cost. This requires clear budgets, realistic economic assumptions and transparent evaluation.

In conclusion, the controversy surrounding Andy Burnham’s latest major policy proposal reflects a familiar argument in British politics: how much should government spend, and who should pay for it? Critics warn that ambitious programmes could eventually result in higher taxes or increased public debt, while supporters argue that investment in public services and infrastructure can create long-term economic and social benefits.

The claim that the public is “about to be rinsed again” is a political characterisation, not a confirmed economic outcome. The eventual financial effect will depend on the details of the policy, how it is financed and whether it produces the benefits promised by the government. What matters most is therefore transparency. Citizens need to know the cost of the programme, how it will be funded and what measurable improvements it is expected to deliver.

For Burnham’s government, the challenge is to demonstrate that its ambitions can be matched by sustainable finances. For taxpayers, the relevant questions are equally straightforward: what will the policy cost, who will pay for it, who will benefit, and what evidence shows that it will work? Those questions provide a more useful basis for evaluating the proposal than political headlines alone.