Overnight Visitor Levy

Tuesday 25th November 2025 Written Statements

[The Secretary of State for Housing, Communities and Local Government (Steve Reed)]

The Government’s mission is clear: we must do all we can to unlock economic growth. For too long, England has been one of the most centralised countries in the developed world. That means that decisions made in Whitehall—far away from the reality of places and communities across the country—have too often failed to reflect the needs of local people. Mayors and other local leaders are best placed to identify and invest in the projects and infrastructure that drive growth and make a place attractive for visitors and residents. Mayors and other local leaders know their local history, local culture and the unique attributes of their places that draw visitors in. But they need powers and funding to enable them to harness England’s potential and unlock growth through investment.

English mayors have come together to ask for an overnight stay levy through the “right to request”. Together they made the case to the Government for the power to raise a new local revenue stream to realise growth-boosting projects that improve the experience for everyone, from hosting mega-events in Liverpool like Euro 2028 to revolutionising bus services in York and North Yorkshire to connect the coast with the moors and the historic towns and cities; from accelerating the redevelopment of Oxford Street in London for world-leading shopping and cultural experiences in the heart of the capital to delivering the Commonwealth games cultural legacy in the west midlands. These are the projects that both make communities, and world-leading visitor destinations. As mayors consider these investments in the months ahead, they will engage with communities and local businesses on what is right for their local economies.

Today I am meeting the mayors’ request and announcing the next big step on our path to devolution. Mayors in England will be given the power to raise revenue locally through a new overnight visitor levy, and we are consulting on whether to also grant this power to leaders of foundation strategic authorities. This is a groundbreaking step for the future of devolution, with transformative investment potential for England’s tourism sector and the wider economy.

With this new power, local leaders will be empowered to deliver more long-term, locally led investment in transport, regeneration and cultural assets that can unlock growth and improve the public realm for residents, businesses and visitors. Making places more attractive to visit and to live and work in will attract further investment and improve the visitor experience. I am therefore proposing that constituent authorities within strategic authorities that implement a levy should be eligible for a share of revenue raised, for growth-related spending.

Around the world, countries that have embraced fiscal devolution enjoy far greater local investment, and that investment is in the things that matter most to their communities. They can move faster to seize local opportunities without burdensome central Government oversight, and they can tailor policy and projects to match local economies. That is why we are embarking on this new era of fiscal devolution in England, giving local leaders the power to raise and invest money into projects that raise living standards in their local areas, and improve the experience for tourists.

Mayors have already proven what is possible when they are given the tools to deliver. Using a business rates supplement, the Mayor of London delivered the Elizabeth line, connecting communities right across London, and tourists from Heathrow airport to the heart of the west end. The Mayor of Greater Manchester has used his mayoral precept on council tax to provide far improved bus services, including free travel for 16 to 18-year-olds through the “Our Pass” scheme. It is outcomes like these that drive my commitment to devolution, and why my department has already taken such significant steps to strengthen it, including through the English Devolution and Community Empowerment Bill currently in Parliament. This goes alongside our commitment in the fair funding review 2.0 to improve the business rates retention system to more consistently support mayors in driving growth, as well as existing arrangements for retained business rates in mayoral areas.

Giving local leaders in England the power to introduce a visitor levy in their area will bring them up to speed with their international counterparts in New York, Milan, Paris and Prague as well as in Wales and Scotland. But a visitor levy on overnight stays will not necessarily be the right lever everywhere. This is about providing mayors with another fiscal tool in their toolbox for growth.

Tourism is vital to our economy, and tourism should share in the growth benefits delivered by investment funded by this levy. England is one of the world’s leading tourist destinations, attracting over 130 million visitors each year. Investment in the places that people visit will help to build on England’s reputation as a world-leading destination. I recognise that businesses, and potential visitors, may have concerns about the effects of a new levy, and I take these concerns seriously. I expect mayors to engage constructively with businesses and their communities to hear these concerns throughout the consultation period and beyond. Local leaders will also run a formal local consultation before making use of the new power.

Tomorrow, my hon. Friend the Exchequer Secretary to the Treasury and I will publish a consultation with the detail of the proposed levy, and I urge all those interested to respond to it, to make this a power that works for strategic and local authorities, businesses, local communities and visitors alike.

[HCWS1097]