Proposed Visitor Levy

Nigel Huddleston Excerpts

Wednesday 25th March 2026 Westminster Hall

[Nigel Huddleston (Droitwich and Evesham) (Con)]

I refer hon. Members to my entry in the Register of Members’ Financial Interests. As always, it is a pleasure to serve under your chairmanship, Mr Efford. I congratulate my right hon. Friend the Member for East Hampshire (Damian Hinds) on securing the debate and speaking so wisely, enthusiastically and knowledgeably about the sector in his opening remarks; to the relief of everybody, that means that I will not speak as long as I originally thought I would.

I have to start with a basic question to the Minister: what do the Labour Government have against the tourism industry? I mean that in all seriousness because, since the Chancellor’s first Budget, we have seen more than 200,000 job losses, and more than half of them have been in the tourism and hospitality sector. Why does that sector seem to be singled out for additional taxes on top of the burdensome ones already imposed across the breadth of the private sector?

Why does the tourism sector seem to be particularly paying the price, especially given how important it is to the UK economy? It brings joy to millions of people—both domestic and overseas visitors—every year, generates more than £147 billion in economic activity and employs well over 2 million people—about 3.5 million, if we include the broader tourism and hospitality sector. Of course, as my right hon. Friend the Member for East Hampshire pointed out, it is also a major generator of export revenue, adding more than £30 billion a year. That is greater than the car industry and greater than the defence industry, but it is being singled out for yet more taxes. Why? How often do we have to say that we cannot generate economic growth by whacking up taxes, and we cannot create jobs by making it more expensive to employ people? That is why we are seeing unemployment.

Before I go on to further details and probably more negative comments, I want to take the opportunity, as many colleagues have, to praise the sector. Our tourism industry is a British success story, and we are very proud of it. Everyone who has contributed has spoken proudly about the amazing things in their constituencies that attract people domestically and from around the world. It is not just the overt tourism things, but our beautiful landscape, incredible heritage, specific tourist offerings and beautiful beaches. We have a lot to offer the world, so we should be proud of this sector, but that raises the question of why it is being hit so hard. It is a major employer in every one of our constituencies.

This is already a highly taxed sector. Those are not just my words; the former Tourism Minister, the hon. Member for Rhondda and Ogmore (Chris Bryant), said that a few months ago. He also said the Government had no intention of bringing in a tourism tax, but a few weeks later the Government are doing just that.

It has been pointed out that this was not a manifesto commitment, just as the national insurance increases were not. The credibility of this policy is therefore already in question, especially when it comes on top of those national insurance increases and the changes to the thresholds, as well as business rates changes that have undermined the retail, hospitality and leisure sectors, and significant above-inflation increases in the minimum wage. We support and have supported increases in the minimum wage, but the increase so far above inflation for younger people has had a disproportionately negative impact on their employment prospects. The tourism sector is primarily an avenue for young people, so we have had increased unemployment and huge amounts of missed opportunity for people to have what could have been their first job in an amazing sector.

It has been said frequently today that this is not just a tourism tax, but a tax on overnight stays—I agree with my Liberal Democrat colleague, the hon. Member for Harrogate and Knaresborough (Tom Gordon), who made that point a few moments ago. It is an overnight accommodation tax, and it is therefore unclear who exactly would be within the remit. Yes, obviously hotels and hostels, but is it caravans, tents and B&Bs? Will the private rented sector and other sectors be included? Who would be included? Would there be exceptions for groups such as Guides and others, who rely heavily on and get great joy out of overnight stays?

As has been said, even if it is proposed at an early stage that the level should be £2 per person per night, that is an additional £56 on a family holiday for four over a seven-day period. That might not sound like a lot to a lot of people, but in the shoulder seasons in a caravan park, for example, it could add a quarter or more to the cost of a holiday. That would make the decision about whether to go very real, and could do immense damage to the shoulder season. One of the most important things we need to do, particularly for our coastal resorts, is extend the shoulder season to increase the sector’s productivity.

I am sure the Minister will comment about how this tax fits into the overall finances of local government and could help local authorities, but there are many practical concerns about how it could be implemented. My right hon. Friend the Member for East Hampshire asked whether we could get a guarantee that the money would be ringfenced. There is a suspicion that the tourism industry would be subsidising and paying towards broader local government finance. Would the tourism tax end up paying for adult and children’s social care? Unless the Minister can guarantee that that will not be the case, that will always be the suspicion.

Tourism taxes are often brought in around the world and then spent on additional tourism and marketing, tourist centres or supporting local tourism offerings. If there is a suspicion that this tourism tax will be spent on other things, it will be doomed to fail from the beginning. The history of all these taxes also shows that, although they may be brought in at a very low level, they always go in just one direction: up and up. So the £56 a week I mentioned could quickly become a much bigger amount. Is the Minister therefore considering putting a cap in the legislation on the maximum amount that could be achieved? Other hon. Members have mentioned that sometimes when these taxes are brought in, there is the quid pro quo of a lower VAT rate; very rarely is there both a high VAT rate and a tourism tax.

There are other points to consider. The hon. Member for Strangford (Jim Shannon) raised the point about the challenges if one area raises a tax and another does not, and he has experience of that on the border between Northern Ireland and the Republic of Ireland. What if Cornwall brought in a tax but Devon did not? Businesses right on the border would face stark issues because of perfectly reasonable decisions made by holidaymakers. That would be through no fault of their own, but because of a decision made by local government.

The hon. Member for Cities of London and Westminster (Rachel Blake) spoke of the peculiarities of local government in London, where we have the boroughs and the mayor, and that point has been raised by Conservative councillors as well. She made the reasonable argument that if the tax is brought in, it maybe needs to be split; otherwise, all the benefit goes to one and some of the costs go to others.

The hon. Member for South Shields (Emma Lewell) raised the fear that if this tax is brought in, there could be 33,000 or more job losses in a sector that is already suffering—I mentioned the over 100,000 jobs that have already been lost in hospitality and leisure. There are real concerns here.

I have further questions for the Minister. The key one is about ringfencing: can we please make sure that we can include in the English Devolution and Community Empowerment Bill—if it comes in—that the money will be ringfenced for tourism? Has an assessment been made of the impact of this tax? Can the Minister confirm whether she has had discussions about VisitBritain and VisitEngland spending, which has also been cut? That is the argument I am making: why are the Government constantly attacking this sector, reducing its funding and increasing taxes on it, when it used to be a great success story? Could the Minister confirm whether she will support Conservative party proposals for 100% business rates relief for retail, hospitality and leisure? There is an alternative to constant increases in taxes.

Whatever the problems may be with local government finances—and there are challenges—we all recognise that they should not and cannot be resolved off the back of an already struggling tourism industry. This is the wrong tax at the wrong time. But if it is coming in, can the Minister assure us that the money raised from tourism will absolutely, 100% be spent on tourism?