Rachel Reeves accused of delivering 'final nail in coffin' for struggling seaside towns

Arcade owners in already struggling seaside towns have warned a fresh tax raid would be "the final nail in the coffin" amid a "cost-of-doing-business crisis" that is hammering British holiday hotspots. While Chancellor Rachel Reeves mulls her options to fill a staggering £50 billion black hole in the budget, one mooted proposal has been to go after the gambling industry.

The move would hit online casinos and family-run arcades - a staple of the great British staycation, which is down nearly 40% from 42.3 million in 2022 to 25.5 million in 2025, according to campaign group Back British Holidays. The Institute for Public Policy Research (IPPR) proposed increasing Machine Games Duty (MGD), applied to slots and gaming machines, from 20% to 50%, accumulating an extra £880 million.

For Jeremy Godden, 35, running amusement arcades has been the family business for generations, but this could all end with one fell MGD hike.

He owns Boulevard Amusements in Ramsgate - the only surviving arcade in a town marked by high retail vacancy rates - and has already battled rising energy bills and National Insurance.

"We have been facing a cost-of-doing-business crisis," he explained. "It [MGD increase] would be the final nail in the coffin - a tax rise on the seaside. We'd have to lay off staff, we wouldn't invest back into the business, and we wouldn't open as many hours."

As 24% of shops on Ramsgate's high street currently lie empty, Jeremy worries his business could be next to fold if Ms Reeves adopts the IPPR's advice.

Boulevard Amusements has opened every day of the year except Christmas Day since 1985, but this could be the first year ever that it's forced to close over the winter.

"In order to promote growth at the seaside, we can't attack the amusement arcade," Jeremy stressed.

Just a few hours away in Essex, the mood is equally pessimistic. Elliot Ball, 41, runs Clacton Pier with his brother Billy, and said an MGD rise would lead to unemployment and business closures in areas where these issues are already rife.

"Any further expense to our business is a concern," he said. "We have worked tirelessly over many years to try and secure a level of sustainability within our business, so to incur an increase in tax during a delicate time for the economy as a whole is a worrying thought.

"The current MGD tax ratio is already at a height of affordability, and any increment in this would not only deter any ability for our requirement to continually invest in this sector, it would also put a number of venues at risk of closure and potentially drive further job losses."

Elliot said he would "inevitably" have to reduce opening hours this winter, meaning some attractions will be closed for more days than they are open.

The IPPR also called for Remote Gaming Duty to be raised from 21% to 50%, though this would only affect online casinos.

Its findings received the backing of former Prime Minister Gordon Brown, who wrote in The Guardian that it would be a "straightforward budget choice" for the Chancellor to announce in the autumn.

This comes at an increasingly precarious time for seaside towns as they rely on staycations - a potentially dying industry.

Key sectors integral to British holiday culture, such as caravanning and camping, are forecasted to lose over £1.2 billion this year - a 39% drop in spending, Back British Holidays added.

This downward trend would deal a staggering £22.24 billion loss to the economy by the end of this year, and £34.86 billion by 2028.

Joseph Cullis, 51, owner of Windmill Leisure in Saltcoats, said people like him have been forgotten about amid a slew of punishing fiscal measures.

"Seaside towns have been left behind," he said. "High taxes, rising regulatory costs, mounting energy bills and employment costs all fall hardest on small family-run venues.

"Business rates still punish high street and coastal communities, while energy and employment costs are climbing faster than revenues in a seasonal trade.

Joseph, also the president of Bacta - the UK's leading trade association representing amusements, warned that hiking MGD could be "the final straw" for amusement arcades across Britain's vulnerable seaside towns.

He said: "I know speaking to arcades across the UK that it has been an extremely tough summer, and it is clear that a rise in taxes like MGD would be the final straw for many venues."