Mayors and local leaders across England will be given the power to introduce an overnight visitor levy as part of the Government's fiscal devolution drive.
The levy, a fee on overnight accommodation stays, will be charged as a percentage of accommodation costs rather than a flat fee, protecting budget holidaymakers from disproportionate charges.
Housing Secretary Angela Rayner said local leaders should be able to capitalise on the millions of visitors their areas attract each year.
‘This measure will give mayors the choice to raise and reinvest funding where it’s needed most. It’ll help support the local services, public spaces and attractions that both residents and visitors rely on, with decisions taken by people who know their area best,’ she said.
Leaders will have flexibility over exemptions, such as for campsites, while temporary accommodation and refuges will not be subject to the charge.
Mayors including Steve Rotheram, Sadiq Khan and Tracy Brabin welcomed the move, with Liverpool City Region suggesting a modest levy could raise up to £18m annually.
Critics argue it is a tax that will discourage tourism. As Chris Howard, chair of Visit Surrey, told BBC Radio Surrey: ‘We're not a big overseas tourism destination, it's local people – it's going to be another tax on local people.’
Cllr Mick Barton, chair of the Local Government Association’s Culture, Tourism and Sport Committee, said: ‘Local communities know best, and we are pleased that the Government has said it should be up to them to decide whether to implement this levy.
‘While we recognise the strong concerns expressed about an overnight visitor levy by the hospitality sector, when designed locally, in consultation with residents and business, it could enable significant investment in the wider visitor economy.’
Further reading:
Fiscal Devolution – has stuff just got real? by Localis chief executive Jonathan Werran
