Tourism: Overnight Visitor Levy

Thursday 17th September 2026 Lords Chamber

Commons Urgent Question

12:01

The following Answer to an Urgent Question was given in the House of Commons on Tuesday 15 September.

“Last Thursday, the Government published their response to the consultation on the overnight visitor levy. The ‘rewiring the state’ Cabinet announcement committed to

‘delivering good growth in every part of the United Kingdom’.

The visitor levy supports that ambition by empowering local leaders to deliver transformational investment, building the reputation of areas across England as world-leading destinations. Local leaders will be able to choose to introduce the levy as a way to raise money to support growth in their region, including in the visitor economy.

Visitor levies are common in Europe and the rest of the world. All over the G7, countries already have some form of tourism or overnight accommodation levy in place. The Government have decided that both foundation strategic authorities and mayoral strategic authorities will be empowered to raise a levy to support growth in their areas. This approach means that places without a mayor will also be able to invest in their region, making them better places for residents and businesses, as well as for the people who visit and enjoy those areas. The levy will be set as a percentage of accommodation costs. That means that low-cost stays remain low cost, while those who can afford it will be able to contribute more to the places that they visit.

Strategic authorities will be required to consult before introducing a visitor levy. This will inform their decision on whether to introduce the levy, how much it would cost and how revenues would then be spent. We expect that local leaders will be able to set out plans for how revenues will be invested by early 2028, and to introduce a levy before the end of this Parliament.

The Government have engaged with the tourism and hospitality sectors throughout the consultation, and we will continue to do so as the legislation is developed. The changes that the Labour Government are introducing will mean that more money will be invested in our high streets and public transport systems, and England’s tourism hotspots will directly benefit from visitor footfall to improve the area for people living there too”.

[Lord Parkinson of Whitley Bay (Con)]

My Lords, it is always a pleasure to see the noble Baroness, Lady Blake, at the Dispatch Box, but it was curious that this Question was not answered by the Tourism Minister in another place and is not being answered by any of the now three Ministers at DCMS in your Lordships’ House. Will she, on behalf of the Government, answer a question that was not addressed when this was taken on Tuesday? This new holiday tax will apply to all domestic stays. Does the Minister think it is fair to charge people who are staying in a hotel to attend the funeral of a loved one, visit somebody in hospital or undergo specialist medical attention in places far away from home?

[The Parliamentary Under-Secretary of State, Ministry of Housing, Communities and Local Government (Baroness Blake of Leeds) (Lab)]

My Lords, if that was the intention behind the levy, I would have something to say. I am delighted to tell the noble Lord that there will be exemptions. For example, we have many places that have big hospitals where parents or relatives have to stay, so there will be sensitivity at local level. It will be for the local level to decide where those exemptions apply so that it is done in the fairest possible way to protect people who have legitimate reasons and needs to be in a particular area.

[Lord Addington (LD)]

My Lords, will the Minister take this opportunity to confirm that this should not be seen as a way of boosting income for normal expenditure but as a bonus on top? It should be set locally. What happens in Bath, for instance, will probably not be applicable in Barnsley. We should make sure that we do something that is appropriate for people in local communities and that it is a bonus for communities that make something out of tourism.

[Baroness Blake of Leeds (Lab)]

The noble Lord raises an important point. It is about putting trust in local areas to work with their local partners and business community to make sure that the benefit comes back into those areas to help promote tourism. We are committed to supporting the tourism industry. I reassure the noble Lord that there will be non-statutory guidance and it will be taken very seriously. We look forward to looking at the plans from local areas that will be coming forward in due course, building on plans that are already in place. A levy is already in place in parts of this country, not to mention around Europe and the world. There are some positive examples to look to in bringing enormous benefits to wider local communities.

[The Earl of Clancarty (CB)]

My Lords, further to the question from the noble Lord, Lord Addington, a key proposal of the Cultural Policy Unit is a city tourism charge that would be ring-fenced for cultural infrastructure, including theatres, museums and heritage sites, which would in a cyclic way help the hospitality sector through encouraging tourism and redressing regional inequalities. However, that will not happen if this charge is squandered in other ways.

[Baroness Blake of Leeds (Lab)]

There is no intention for the funds raised to be squandered, but a ring-fenced approach smacks of centralism. It is critical that local areas can determine their needs. I come from an area that has benefited enormously from investment in cultural and sporting events that have brought huge benefits, not least round-the-clock coverage from an aerial perspective of the beautiful sights of Yorkshire, for example. There are so many ways that this can be done. We are not ring-fencing because it would not be in the spirit of devolution, but we are very mindful of the comments that the noble Earl has made.

[Baroness Keeley (Lab)]

My Lords, Italy raises €1.3 billion per year from tourist taxes, with more than 1,400 municipalities implementing the tax. They have a different approach. They earmark the funds to support local tourism, protect cultural heritage and manage the environment. Given that tourists who visit the UK benefit greatly from our cultural offerings, including free entry to our museums, does my noble friend agree with my hope that mayors and strategic authorities—it is right that they should decide these things—will channel the funds for culture as well as other support for tourism?

[Baroness Blake of Leeds (Lab)]

My noble friend raises a point on a similar theme. From my experience of working with the business rates retention pilot back in the day, I know that the most important thing is that we get the right partners around the table in those localities. The businesses and enterprises that my noble friend refers to need to have a voice around that table. It is critical that events and opportunities that attract more visitors have full representation and encourage investment that will make visitors feel welcome, looked after, safe and all those things that matter on a wider perspective.

[Lord Houchen of High Leven (Con)]

My Lords, I declare an interest as one of the mayors who is going to receive the power to implement the overnight levy. Let me put on record and be extremely clear that, for as long as I continue to be Mayor of the Tees Valley, there will be no overnight levy implemented within my region, specifically because it has a significant impact on relatively socioeconomically poor families who decide to holiday within the UK. It is an additional tax on holidays, but it is also a tax on business. We have contractors, white van men and businesses who rely on overnight stays up and down this country. It is an additional tax on business. Devolution seems to be a one-way street with this Administration. Devolution means an ability to increase taxes. Can the Minister tell me where we might be able to see devolution of the ability to decrease taxes?

[Baroness Blake of Leeds (Lab)]

The noble Lord and I have worked together on many occasions in the past. That is entirely in his remit, and that is why this is not being imposed. It will be a devolved matter. Local mayors and strategic authorities can make their own decisions. That is the fundamental point of why we are doing it this way. Evidence from around the world does not support the noble Lord’s thesis, but of course there is concern. We need to make sure that everything is analysed and addressed and that we have a full picture of the impact as we go on.

[Lord Hope of Craighead (CB)]

Will care be taken to study the levy in Edinburgh, where it has been in force for quite some time, as to both its administration and the effect on businesses and the wider effects across the city?

[Baroness Blake of Leeds (Lab)]

My understanding is that the Edinburgh scheme is relatively new. It was introduced this summer and the estimate is that it has raised £50 million. We will be looking carefully at Edinburgh’s experience. It has not reported any decrease in visitor numbers, and we expect a positive programme of how it is going to invest that money. Edinburgh is home to many artists over the summer; I am sure it would want to make it clear that they are very welcome to go to Edinburgh and will be supported.

[Lord Watts (Lab)]

My Lords, is the Minister aware of the Merseyside mayor’s proposals to lever in private sector money using this levy for some exciting schemes that will create wealth, growth and jobs? Does she not think that the mayor of Merseyside will know more about generation than the Tory party, which abandoned lots of these areas for a long time?

[Baroness Blake of Leeds (Lab)]

I am absolutely convinced that Mayor Rotheram knows what is best for his local area. He is a passionate advocate of everything to do with Liverpool. Liverpool and Manchester have already introduced a flat-rate levy at the behest of the business community in their areas. It is the businesses that have worked with the leaders to bring forward those levies. I am pretty sure that I will be in Liverpool fairly shortly, so I look forward very much to finding out more about it.

[Lord Fuller (Con)]

My Lords, UKHospitality has calculated that this tax will cost 33,000 jobs, raise £1.6 billion and reduce GDP by £2.2 billion. That is its assessment. What assessment have the Government made of the financial impacts of this proposal and will they publish it?

[Baroness Blake of Leeds (Lab)]

It is fair to say that we do not recognise the figures that UKHospitality has put out. We have been working with it incredibly closely through the consultation and will continue to do so. This is a vital part of our economy and we are here to give the support that is needed to make sure that these areas thrive. The conversation is ongoing, but I suggest the noble Lord looks at the wider evidence from around the world of how successful such a levy can be.