Reeves opens door for mayors to impose ‘damaging’ tourist tax
Mayors in England are set to be given new powers to levy a tourist tax on visitors to fund local projects under a new policy.
Reeves will give mayors the ability to impose a “modest” charge on visitors staying in hotels, bed and breakfasts, guest houses and holiday lets through the English Devolution and Community Empowerment Bill, which is currently going through Parliament.
The measure, which has been called for by regional leaders including London Mayor Sir Sadiq Khan and Greater Manchester’s Andy Burnham, has been condemned by the hospitality industry.
“The Government has gone back on its word and introduced a damaging holiday tax… [it] has blatantly disregarded the commitments it gave to the House of Commons just two months ago that it ‘had no plans’ to introduce this tax,” Kate Nicholls, chair of UKHospitality, said.
“This is a shocking U-turn that will only make life more expensive for working people… It could cost the public up to £518m in additional tax when they travel in the UK and having knock-on impacts for the wider hospitality sector,” she added.
Critics worry that the tax will discourage travel and make life tougher for the already-struggling hospitality industry.
“Make no mistake – this cost will be passed directly onto consumers, drive inflation and undermine the Government’s aim to reduce the cost of living,” Nicholls said.
Khan: ‘Great news for London’
Officials, however, said the measure would bring English cities into line with other tourist destinations around the world including New York, Paris and Milan.
The Ministry of Housing, Communities and Local Government said research showed that “reasonable” fees had a “minimal” impact on visitor numbers.
Mayor of London, Sadiq Khan said the levy was “great news for London… The extra funding will help cement our reputation as a global tourism and business destination.”
“As part of developing our plans for the levy we will work closely with the hospitality and tourism sectors to ensure it delivers the maximum benefits for London and our brilliant businesses.”
In 2024, London saw 89 million overnight stays, suggesting a tourist tax in the capital could raise up to £240m a year.
Manchester mayor Andy Burnham echoed this sentiment, arguing that the tax will allow investment in “the infrastructure these visitors need”.
One mayor, however, won’t be using their powers to raise tax.
Conservative Tees Valley mayor Lord Houchen said: “Thanks, but no thanks.”
“There will be no tourist tax in Teesside, Darlington and Hartlepool for as long as I’m mayor.”