Proposed Visitor Levy

Emma Lewell Excerpts

Wednesday 25th March 2026 Westminster Hall

[Emma Lewell (South Shields) (Lab)]

It is a pleasure to see you in the Chair, Mr Efford. I thank the right hon. Member for East Hampshire (Damian Hinds) for securing the debate.

South Shields is a beautiful coastal town that really comes alive in the summer months. The overall borough of South Tyneside has nearly 6 million visitors each year, adding millions to our local economy. Sandhaven beach in South Shields is a Sunday Times beach of the year and the famous Great North Run has its finishing line on our Leas. When tourists visit us, they get the best hospitality that the UK has to offer, the cosiest of places to stay, and a welcome like no other. We are naturally a friendly bunch who love our little part of the north-east and are proud to call it our home.

Given the context of rising energy costs, high business rates, employer national insurance contributions, minimum wage increases and high VAT, a tourist tax is the wrong tax at the wrong time. I understand that some of those issues are beyond the Government’s control. I know all too well that the decline in communities like mine, which suffered under the last Tory Government, will not be reversed overnight. I understand that national insurance contributions were necessary to fund key public services and I absolutely support the national minimum wage; its introduction under the previous Labour Government transformed my life.

I have been vocal, however—and I continue to be, along with colleagues—about working with the Government on a business rates reduction across all hospitality and a VAT cut. As a sector, hospitality is being hit hardest by the accumulation of those costs. Despite those ongoing discussions, the new, unexpected development of a tourism tax has felt like a kick in the guts for me and my local businesses. It is one burden too many for us, and it will result in job losses and more boarded-up businesses in the centre of my town.

That extra burden is very likely to tip hotels, B&Bs and small providers over the edge, and will be felt most acutely by low-income visitors. It feels as though the tax is simply a quick win to divert more money into regional coffers, but with drastic long-term consequences and adverse impacts locally. It feels like short-termism at its worst and does not feel very strategic. UKHospitality modelling estimates that the tax will lead to 33,000 job losses, just short of £2 million in lost tourism spending and a reduction in tax receipts to the Treasury of £688 million.

Hospitality is the largest employer in South Shields. We also have high levels of unemployment, which is rising for those aged between 18 and 24. The tax seems at odds with the Government’s aims for growth, youth employment and reviving local economies such as mine. That is why it was never in our manifesto. Just last year, the Government were continuing to rule the tax out. I believe that the legislation that will enable the tax is currently going through the House of Lords in the English Devolution and Community Empowerment Bill. I implore my hon. Friend the Minister to revert to last year’s sensible position, because I have yet to meet a single business, trade body, operator or member of the wider public, especially in South Shields, who supports the proposal.

--- Later in debate ---

[Alison McGovern]

I thank the Liberal Democrat spokesperson for his intervention, because it gives me the opportunity to respond to a point that a number of Members raised. We have just concluded the local Government funding settlement for the next three years, so we have set the path for local Government funding. This question before us is a separate conversation; it is about whether, in theory, as part of devolution, we should enable mayors—if they choose to, and they do not have to—to use this power to invest in and grow their economies. That is a completely separate question from local government funding, which I could bore this Chamber for England on, but I am not going to.

In her speech last week, the Chancellor set out that if we are serious about growth across the country and not just in a few places, we must go further. Giving towns and cities more say over their revenue is essential. Our international counterparts give city leaders real fiscal powers, and we want to begin to make progress in closing that gap for English mayors. That is the context for the proposed visitor levy we have been discussing. Its purpose is to address the gap between the responsibilities we place on mayors and the funding they have in order to meet them. A modest levy can provide a reliable income stream that mayors can reinvest in local infrastructure, transport and the visitor economy itself.

The right hon. Member for East Hampshire asked me to spell out what will be in primary legislation, which I am obviously not able to do at this point. However, I have heard what Members have said and I understand where they are coming from, and we will take that on board as we move forward. My hon. Friend the Member for South Shields (Emma Lewell) also asked about that issue, and we will set out the legislative process as we move ahead.

[Emma Lewell]

When I was looking through the guidance, it seemed to indicate that mayors will have to consult local authorities and local industry before they come to any decision, but there is no requirement to hold discussions with local MPs, who arguably know their constituencies far better than any mayor ever could. Could the Minister look at that for me, please?

[Alison McGovern]

If mayors are not talking to their local Members of Parliament, they are missing an opportunity and an important part of their role. I will certainly take what my hon. Friend says into consideration as we move forward with this.

We have seen internationally how well-designed visitor levies can support growth, making places better to live, work in and visit, while also strengthening tourism and local businesses. Visitor levies have been used internationally for tourism, promotion and marketing, sustainable tourism projects, public transport, parks, public facilities, cultural heritage, restoration and so on.

The principle is very straightforward: visitors who benefit from local services and amenities make a fair contribution to maintaining and improving them. That is fiscal devolution. Mayors will be best placed to judge whether a levy is right for their area, reflecting different priorities, their own economies and local democratic accountability. That is the point I want to emphasise. Hon. Members have mentioned different parts of England and different economies, a point I accept entirely. That is the whole point of devolution. If decisions about the economy are taken only in this postcode, they will not be right, because England’s economy is extremely diverse.

I want to turn briefly to questions about exemptions, specifically scouts and guides. The hon. Member for Keighley and Ilkley (Robbie Moore) who spoke passionately about the campaign run by his constituents is sadly not here, but I hope he might find out that I applaud the civic responsibility shown by those young people.

The consultation proposed that the levy would apply to commercially let short-term accommodation, not a main residence, as queried by a couple of hon. Members. This is obviously a consultation, and we will say more when we bring forward proposals.

Several national exemptions were also proposed, such as stays on registered Gypsy and Traveller sites where it is a primary residence, which a couple of hon. Members mentioned; charitable or non-profit accommodation for shelter, respite or refuge; and certain types of temporary accommodation. I take the point about scouts and guides very seriously. Final decisions will be set out in the Government’s consultation response.

A number of Members mentioned the cost of family holidays, and I want to flag that that issue is worth bearing in mind, particularly as we did not do all that work on the child poverty strategy to improve family incomes if they cannot afford a break, which many families up and down the country truly need right now.

The devolved Governments in Scotland and Wales have already legislated to introduce visitor levies and we are learning carefully from their experience. We also want to learn from those who would be affected by a levy in England, which is why we have taken a thorough and open approach to consultation. We received more than 1,000 responses from mayors, local authorities, hospitality representatives, independent accommodation providers and many others. Those responses covered a wide range of views, and they will continue to inform our thinking about the design of this power.

On the use of revenues, any money raised through a visitor levy should be reinvested in those places where it is generated. That is why we propose that the decision on how those revenues are spent should sit with local leaders, who can best understand local needs, pressures and opportunities. The levy must be fair and proportionate, which is why we consulted on the different types of accommodation to which it should apply. We asked whether there should be a threshold below which providers are not liable, and proposed a small number of national exemptions, which I have spelled out.

We also sought views on how the levy should be charged. In the consultation, we asked about a percentage-based rate, which would scale with the cost of a stay, but we also recognise the potential benefits of alternative approaches, such as a flat-rate model. Recognising that local leaders know their area best, we asked whether mayors should have the flexibility to set levy rates locally, reflecting local priorities. Those questions, alongside many others, are being considered carefully by my Department and the Treasury as part of the next stage of policy development. I will ensure that other Ministers involved receive a copy of Hansard that covers this debate.

The Government will set out their legislative priorities for the second Session of this Parliament in the King’s Speech, which we expect to provide the framework for local leaders to introduce a visitor levy before the end of this Parliament. Between now and then, we will continue to engage closely with all those who may be affected to ensure that this policy is well designed and locally led and that it delivers for communities as well as for visitors. I take it as read that Members who have contributed know that my door is always open to them if they want to discuss this issue.

The proposals we have discussed reflect a clear direction of travel for this Government. We want to give leaders the powers and tools they need to support growth, to introduce policies that can help shape their communities and to give their place the strongest possible future. By strengthening devolution and giving communities a greater say over their own revenues, we can build a system that is simpler, more accountable and better able to deliver for the people of this country.

Again, I thank the right hon. Member for East Hampshire for securing this debate. I look forward to continuing to work with Members from right across the House and with local partners as we move forward in developing this policy.