Tourist Tax: Why Now Isn’t the Right Time

Many constituents have contacted me in recent weeks expressing concerns over new Government proposals to introduce a visitor levy on overnight stays in England. 

 Our hospitality and tourism sectors play a crucial role in our economy, supporting around 3.1 million jobs, contributing around £147 billion per year to the economy, and accelerating the development of communities across the UK. Many areas rely heavily on visitors, so it is understandable that constituents are concerned about the impact of a tourist tax. 

 The Government has said that the funds generated from the visitor levy will be directly reinvested into local areas. I support giving local areas more control over economic decisions. However, the tourism sector is already under significant pressure. Rising costs, the National Insurance hike, and a high VAT rate have pushed up the cost of travel, which has had a direct impact on demand. A survey showed that around 45% of tourists would not consider visiting the UK due to post-Brexit travel and accommodation costs.

The UK is already one of the most expensive tourist destinations in the world, ranking 113th out of 119^th for price competitiveness on the World Economic Forum’s 2024 Travel & Tourism Development Index. Piling additional costs onto the price of travel risks reducing demand, which has only recently shown signs of recovery following the pandemic. 

If the government plans to allow mayors to introduce local tourist taxes, it must also provide proper support. That means easing the NICs burden on hospitality businesses, introducing an emergency 5p cut to VAT on hospitality, accommodation and entertainment until April 2027, and investing in promoting the UK abroad as a top tourist destination. Otherwise, jobs in the sector may be at risk, affecting people’s livelihoods during a cost-of-living crisis.

Any proposal for a tourist tax must be properly scrutinised and implemented with full transparency. Above all, the Government must guarantee that it will not use a visitor levy as an excuse to cut already stretched local authority funding.

The tourism and hospitality industry is essential to our economic growth. We must ensure that any such policy changes balance local development with the sustained growth of the sector.