Tourism: Overnight Visitor Levy

Debate between Jim McMahon and Rebecca Paul

Tuesday 15th September 2026 Commons Chamber

[Rebecca Paul (Reigate) (Con)]

(Urgent Question): To ask the Minister for Housing, Communities and Local Government if he will make a statement on the impact of the Government’s proposed overnight visitor levy on the tourism and hospitality sectors in England.

[The Parliamentary Under-Secretary of State for Housing, Communities and Local Government (Jim McMahon)]

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.

[Rebecca Paul]

Let us call this what it is—Labour’s holiday tax. Although we knew it was coming, we never expected it to be uncapped. This Government have already hammered hospitality with higher employment costs and business rates. Almost 89,000 hospitality jobs have gone, and now what is Labour’s answer? Hit them again. If we tax something, we get less of it, so if we tax tourism, we will get less tourism—it is not complicated. Fewer tourists mean fewer jobs. UKHospitality estimates that up to 33,000 jobs will go, along with over £2 billion wiped from the economy. These job losses will hit young people hardest, when they are already struggling to secure those all-important first roles.

We should not make the mistake of thinking that this is just a tax on foreign visitors. Tax Policy Associates estimates that trips by British tourists will generate 63% of the revenue from this levy. This is a tax on hard-working British families. A weekend away, a family holiday or a few nights by the seaside will all cost more. Every pound taken in this tax is a pound that families do not spend in the local pub, restaurant, café, shop or attraction. It is not just Brits on a staycation who will be impacted—it will be anyone staying overnight for any reason, such as visiting a sick relative, going away on business or travelling for medical treatment. Why on earth should those people be taxed simply for going about their daily lives? It is not fair.

The Prime Minister has repeatedly promised to give breathing space to households struggling with the cost of living, yet this tax does the exact opposite. British hospitality does not need another tax. Hard-working families do not need another tax. Young people looking for work do not need another tax. The Government must scrap the holiday tax.

[Jim McMahon]

Where do I start? We are not starting from year zero. The idea that the time under the previous Conservative Government was somehow “the good days” for our pubs, our hospitality industry and our tourism economy. Just think about the thousands of pubs that closed on their watch, and the bars, the restaurants and the live music venues that were left standing by themselves because they were ignored by the Government of the day. Well, now they have a Government on their side, which is why we have already introduced measures to give pubs and live music venues a 20% business rates cut, and we have targeted investment at our town centres and our high streets.

At the end of the day, it is not possible to go to a corner of England and not see somewhere that was impacted by all those years of austerity and the lack of investment that went alongside it. The question is: do we just accept that decline is inevitable and that the rot that the Conservatives allowed to set in across large parts of this country is a permanent fixture of our national character? Or do we decide that a different route can be taken, in which we invest in our economy and growth?

Importantly, we must see this measure through the prism of the new spirit of devolution, because there is no mandation—areas are not being made to introduce a levy. It is down to local leaders to make the right call for their area, to consult on those decisions and, importantly, to present back to their community where the investment will go. That will not just benefit people who are visiting. Investment in tourism hotspots in particular—in our great cities and countryside—and our rural economies will benefit the people who live there, because they will have better neighbourhood services provided. In the end, everyone will win.