English mayors will get new powers to levy tourist taxes

English regional mayors will be given the power to charge tourists for staying overnight in their towns and cities, Local Government Minister Steve Reed has said.

Speaking ahead of Wednesday’s Budget, Reed said: tax It aims to give locally elected mayors the power to “unlock growth through investment”, such as organizing events or improving public transport systems.

London’s Labor Mayor Sir Sadiq Khan and Manchester’s Andy Burnham said the new powers were good news for their cities.

But Tees Valley’s Conservative mayor Lord Houchen said he would not introduce the new tax and the hospitality industry trade body warned the cost would be passed on to consumers.

The move would put England on par with Scotland and Wales, both of which will introduce a tourist tax of £1.30 per night for Wales and 5% for Scotland next year.

New York, Paris and Milan are among the countries that currently impose tourist taxes; research shows that reasonable fees have little impact on visitor numbers.

“Mayors and other local leaders know their local history, their local culture and the unique characteristics of the places that attract visitors,” Reed said.

“But they need the powers and finances to unlock Britain’s potential and unlock growth through investment.”

Research shows that a £1-a-day tax in London could raise £91 million a year for the capital.

The government says the money raised could fund investments such as the regeneration of Oxford Street in London or midnight buses and trams in Manchester.

Sir Sadiq said the tax would be “great news for London” and that the extra funding would help “strengthen our reputation as a global tourism and business centre”.

Burnham said around two million people visit Greater Manchester each year, contributing around £9bn to the local economy.

He said: “The tax will allow us to invest in the infrastructure these visitors need, such as keeping our streets clean and then improving our public transport system by running buses and trams, ensuring every experience is positive and memorable.”

But Lord Houchen rejected the tax on principle, saying: “I will not exercise that power.

“There will be no tourist tax in Teesside, Darlington and Hartlepool as long as I’m mayor. Thanks, but no thanks.”

Kate Nicholls, chief executive of industry body UKHospitality, has warned that a “damaging holiday tax” could cost the public up to £518 million.

He said: “Make no mistake – this cost will be passed on directly to consumers, increasing inflation and undermining the government’s aim of reducing the cost of living.”

There were also signs of potential tension between council leaders and mayors; Westminster City Council leader Adam Hug, of the Labor Party, called for revenues from the tax to be shared with councils rather than kept by mayors.

Cllr Hug, whose council includes some of central London’s major tourist attractions, said: “While this plan will allow combined mayoral authorities to charge and collect the nightly tax, it is important that the government ensures mayors share revenue with local councils in their areas to support these services, where economic growth will be negatively impacted.”

The plans will be subject to a consultation process that will last until February 18 and will consider issues including whether to impose a cap on the amount of tax.