Fierce opposition to a proposed holiday tax on a Welsh tourist hotspot should serve as a ‘stark warning’ to Labour over its plans to hammer families taking breaks in England, campaigners said today.

Days after Andy Burnham was accused of launching another raid on struggling households as he approved a new holiday tax for England, a similar move has been rejected by Anglesey, where around one in five jobs are supported by tourism.

The then Labour-controlled Cardiff government backed its own ‘visitor levy’ of up to £1.30 per person per night in 2025, sparking warnings that tourists could be put off.

So far Cardiff is the only area of Wales planning to introduce a tourist tax, with Gwynedd council – which covers popular destinations such as Snowdonia and the Llyn peninsula – among those facing strong local opposition.

Today proposals for Anglesey to tax its more than one million annual visitors £1.30 per night for hotel stays, and 75p for shared accommodation such as campsites, were dropped after an overwhelmingly negative response.

More than 83 per cent of businesses on the island who responded to a consultation were opposed, and 84 per cent of visitors.

Over six out of ten holidaymakers polled said they would stay for a shorter period if the tax was imposed, while two-thirds would consider booking a different destination.

Concerns from business included the impact on those dependent on the seasonal tourist trade, as well as competition with areas of Wales with no overnight levy.

More than one million visitors who come to Anglesey every year, attracted by gems such as Llanddwyn Island, would each have faced a levy of £1.30 per night under the plan

Residents were ‘more divided’, the research found, but overall 58 per cent of islanders were opposed.

Today members of the island’s county council backed a decision by its executive to scrap the planned levy over fears about its economic impact.

It comes as Andy Burnham is to give English regional mayors power to impose an unlimited ‘overnight visitor levy’ on stays in hotels, B&Bs and holiday lets.

Despite objections, the tax is to be a percentage of accommodation charges rather than a flat fee and would not be capped, with Labour-run areas likely to set it at 5 per cent.

Business groups described the move as a ‘kick in the teeth’ that would put tens of thousands of jobs at risk while costing holidaymakers an estimated £1.6billion by the end of the decade.

Welcoming Anglesey’s decision, Allen Simpson, CEO of UK Hospitality, said the negative response ‘should come as no surprise’. 

‘The holiday tax is deeply unpopular with both businesses and visitors,’ he said. 

‘Any council looking to press ahead with a holiday tax shouldn’t be shocked by the opposition they encounter.

‘The strength of feeling in Wales reflects our wider polling, which consistently shows how unpopular this tax is. 

‘During a cost-of-living crisis, the Government should be looking to make family breaks more affordable, not introducing new costs. 

‘It should listen to the public’s concerns and scrap the holiday tax.’

Benjamin Elks of the TaxPayers’ Alliance, which has been on the island campaigning against it, said: ‘The rejection of this levy should be a stark warning to ministers considering similar taxes in England.

‘Tourism taxes risk driving visitors away and piling more costs onto hospitality businesses.

‘Ministers should stop inventing new taxes and focus on helping the sector grow.’

Tourism is vitally important to Anglesey, generating £360million a year for the island’s economy. Backers said a tax would help fund improvements to transport links and services on the island, which has a population of just 68,000.

But opponents argued that any benefit would be offset by tourists being driven elsewhere.

Analysis by the TaxPayers’ Alliance found 45,000 fewer tourists could visit as a result, with £14million in lost spending.

The Welsh government – now under a minority Plaid Cymru administration – said the visitor levy scheme supported ‘investment in tourism services and facilities’.

‘It is for local authorities to decide if they want to introduce a levy in their area following consultation with their communities,’ a spokesman said.