England's mayors to be given power to introduce tourist tax

Mayors in England are set to be given the power to introduce an overnight visitor levy on tourists, under plans being announced by the government later.

Local leaders would be allowed to bring in an uncapped levy, dubbed a "tourist tax", as a percentage of the cost of accommodation rather than a flat fee.

Hospitality leaders have warned "jobs are now at risk" because of the proposals and that families holidaying in England would feel the pinch.

But ministers are said to believe mayors are unlikely to make it too expensive with budget holidays protected by the fact it is not a flat fee.

The idea was first raised under former Prime Minister Sir Keir Starmer in November and is similar to schemes running in Scotland and European capitals.

The government will announce more details after the Housing Secretary Angela Rayner meets mayors in a virtual meeting held at No 10 North on Thursday.

Under the proposals, local leaders would decide how the revenue raised should be reinvested.

A government source said "it will be up to local leaders and local voters" in England "to decide what is right for their area".

But it means a holiday in England could become more expensive if local leaders decide to implement the tax.

Leading trade body UKHospitality has hit back at the proposals, warning they are "not going to be painless".

Its chief executive Allen Simpson claimed it would add about £100 to £120 on average to the cost of a family holiday in England, amid fears mayors would make use of the fact there is, in theory, no upper limit for the levy.

"We know, don't we, that local government is struggling for funds - it was hit very hard by austerity," he told BBC Radio 4's Today programme.

"If you only devolve one tax raising power, of course local mayors are going to pull that lever until it snaps."

He added: "It will be the case that you'll have holiday parks which can't open in the shoulder seasons and of course people who go on holiday will just have that little bit less money in their pocket."

The Overnight Visitor Levy, which was outlined in the King's Speech in May, has not been brought forward in Parliament yet.

Prime Minister Andy Burnham has framed the policy as part of his wider devolution agenda with mayors able to set out plans for how new revenues will be invested by March 2028.

He was mayor of Greater Manchester when the city introduced the City Visitor Charge in April 2023 - a £1 per room, per night fee - to pay for measures aimed at attracting more visitors.

Regional mayors say the levy is needed to raise more income to invest in local priorities and support economic growth.

The taxes are common in Europe and the rest of the world, with New York, Amsterdam and Rome applying overnight charges to accommodation stays to fund local services. However, they are capped in several European cities.

Mayor of London Sir Sadiq Khan supports a tourist tax on overnight visitors, which could raise more than £350m a year for the capital, according to analysis in January.

The figure from Central London Forward (CLF), which represents 12 central London local authorities, was based on a 3% levy on the cost of a room, whether a hotel or short-term let.

In Scotland local authorities can charge a visitor levy on overnight accommodation. In Edinburgh, the rate is 5% for those staying overnight in hotels, bed and breakfasts and self-catering facilities - capped at five nights.

In Wales, a capped levy of £1.30 per person per night is set to be introduced in April next year.

Burnham promises more devolution and public control of essential services

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