Mayors given power to bring in tourist tax to raise millions for local areas

Mayors given power to bring in tourist tax to raise millions for local areas Local leaders across England will be given freedom to set the rate - which has no upper limit - but it is understood that Labour's metro mayors have agreed it won't exceed 5% Mayors will be given the power to impose a tax on overnight stays that could raise tens of millions of pounds for local areas. Holidaymakers would be charged on a percentage of the bill for their trip, rather than a flat fee, to shield tourists staying in budget hotels from paying the same rate as luxury guest Local leaders across England will be given freedom to set the rate - which has no upper limit - but it is understood that Labour's metro mayors have agreed it won't exceed 5%. The revenue will be funnelled directly to local areas rather than the Treasury, and could go towards public services, transport and investment in promoting culture and tourism. The move, which is not expected to come into force before 2028, would bring England in line with popular holiday destinations Europe like Rome, Barcelona and Paris, as well as the US and Canada. A 5% overnight levy has been introduced in Edinburgh for the first five nights of a stay. Industry bosses have warned it could put off visitors and hammer hospitality and tourism businesses. UKHospitality said estimates suggest it could cost 33,000 jobs and increase tax for holidaymakers by £1.6billion. But local leaders have said it could offer game-changing funding for local services. No 10 insisted the “overwhelming majority” of hospitality firms would not be directly affected as the charge only applies to overnight stays - and would be at the discretion of mayors and strategic authorities. Communities Secretary Angela Rayner unveiled the plans at a meeting with mayors in No10 North on Thursday. She told The Mirror: “This Mayoral Council, the first since the Prime Minister has set out his ambition to rewire the state, showed exactly why devolution matters. It brought together mayors from across the country who are brimming with energy to take action on the issues that matter most to their communities. "Issues like better public transport, skills training and much needed homes that I know readers of the Mirror will find all too familiar. Today we took this commitment to shift power out of Westminster and into the hands of local communities one step further - by giving mayors the option to introduce an Overnight Visitor Levy, so they can raise and reinvest money to strengthen their towns and cities.” Steve Rotheram, Mayor of Liverpool City Region, said that a modest levy could generate £18million-a-year that could be poured back into the area. "We're going to try and judge it so that it's not an impediment to people," he told The Mirror. "Within the overall cost of a weekend stay, the additional few quid that comes our way would pale into insignificance in the greater scheme of things. It'll be the the price probably of a coffee or something like that." He added: "It means that when we get huge visitor numbers - and we have - then the infrastructure needs to be kept upgraded. So we want to have clean streets for when people come. We want to have a brilliant transport system for when people come. We want to have more visitor offers, so more attractions and all of that, and that's part of it." In London, officials are yet to make a decision on how the scheme will work, but the charge will be no higher than 5%. Analysis earlier this year suggested a 3% tourist tax on overnight visitors to the Capital could raise more than £350m-a-year. Mayor of London, Sadiq Khan, said: “London’s visitor economy is a huge success story, supporting jobs, businesses and investment across the capital and the wider country, and I have long argued that London should have the same flexibility as other major global cities to raise and invest funding locally." Local leaders will be given flexibility to offer exemptions – such as for campsites - and temporary accommodation, shelters or refuges would not be included. Zoë Billingham, director of think tank IPPR North, said: “We are delighted to see that mayoral powers to implement an overnight visitor levy across English cities and regions are being confirmed. With the proceeds mayors and local leaders can invest in the spaces and services they know will make their cities thrive. “It is already a success in other major cities including Barcelona, Amsterdam, and Rome who benefit to the tune of hundreds of millions of euros in revenue to reinvest in their places.” Rosie Lockwood, associate director of external affairs at the Centre for Local Economies, said: “Visitor levies are the no brainer first step towards giving local leaders more fiscal power. Most of us expect to pay it when we travel overseas and it helps places retain and reinvest more of the value they create through tourism. “This money should deliver visible local benefits. Just as we see abroad, this money should be used to invest in local priorities like culture, infrastructure and thriving local communities. But levies are just one part of a fairer local economy, because the money raised needs to be reinvested wisely so that it works hard for local places."