Proposed Visitor Levy

Tom Gordon Excerpts

Wednesday 25th March 2026 Westminster Hall

[Tom Gordon (Harrogate and Knaresborough) (LD)]

It is an honour to serve under your chairmanship, Mr Efford. I congratulate the right hon. Member for East Hampshire (Damian Hinds) on securing the debate.

As Liberals, we strongly believe that power should be handed down to the lowest level and that we should give local areas the tools and ability to shape their own future. In principle, I would therefore support giving combined authorities the powers to introduce an overnight visitor levy—but, in this economic climate, that does not mean that we necessarily should. Let us be clear: hamstringing regional mayors with inadequate funding and then handing them the power to tax is not devolution—it is simply passing the buck.

Across North Yorkshire, from Whitby to Harrogate, from the dales to the moors, tourism is not a luxury, but a lifeline for many communities. Hotel owners in my constituency tell me that if the money comes back into the local visitor economy, they can make it work. That is a reasonable position—but they also say they have been promised investment before, and that is where the scepticism lies.

Tourism is a vital part of the economy of many local areas, supporting jobs, local businesses and community services. One topic that has not been talked about much today is the support from town and parish councils with the hard graft of organising events, supporting culture and bringing people into our communities. That is why I am supporting both Harrogate’s and Knaresborough’s bids to be towns of culture. The problem is that there is no requirement to involve them in that tourism strategy, or even necessarily on what a visitor levy may look like. That is a glaring omission.

My hon. Friend the Member for Stratford-on-Avon (Manuela Perteghella) cannot be here today, but she has told me about the work that her town council is doing in organising such events as the world-renowned Shakespeare birthday parade, which attracts visitors from across the UK and beyond. Under these proposals, the council could be expected to deliver the footfall to the town and the economy, but denied a say on the charge. That simply cannot be right.

If we are serious about devolution, local must mean local—not just mayors in their ivory towers, feathering their own pet projects and their nests. We should be including voices from town halls, parish councils and the communities they represent. That principle must extend to how any money raised from a visitor levy is spent. I have heard clearly from my own town councillors in Harrogate, Josie Caven and Graham Dixon, that if the mayoral tourist tax is introduced, people expect to see the basics done properly. Some of that revenue should go to funding services that tourists use—for instance, the cleaning, fixing, painting and refurbishing of parks and public toilets. If people are asked to pay more, they will expect to see where the money goes. If people cannot see where it goes, they will not believe a word about why it has been raised in the first place.

Crucially, people want to have an input and a proper say. That is why, in communities across the country, local Liberal Democrats are on the ground, working hard for their communities. They know much better than some of these regional mayors how any levy should be spent. For instance, across the other side of the Pennines in Stockport, local Lib Dem champion Niki Meerman is campaigning to bring a pavilion back into use at Bredbury rec. The local Lib Dem team in Offerton, led by Councillor Will Dawson and Councillor Dan Oliver, along with other local champions such as Jamie Hirst, wants to make sure the community gets the leisure facilities that have long been promised. Jason Jones is working to bring back Woodbank Hall into use. Those are not vanity projects. These are the things that make communities work.

[Damian Hinds]

They are focus articles.

[Tom Gordon]

They may well be focus articles too. The local community champions that we have on the ground are making the point that if money is raised locally, it should be shaped locally, spent locally and seen locally. That applies across England.

Councillor Hannah Kitching in Barnsley put it to me very clearly: if South Yorkshire ends up with a tourist tax, people will expect to see real investment in public transport—connecting the whole region, not just parts of it. That means expanding such things as the Supertram network beyond Sheffield and Rotherham, so that growth is shared from the visitor economy and not concentrated.

In my constituency, I have heard real concerns from businesses that a tourist tax has the potential to suck up money and take away from Harrogate and Knaresborough, rather than adding value to our community. If we are going to end up with yet another tax imposed by another Labour politician, it should at least fund the issues that will drive tourism and growth in our local area, for instance my long-standing campaign to dual the line between Knaresborough and York or the community campaign to get a restoration package for Knaresborough castle. Those things would bring people to the area and add, rather than taking away. They would not just be cases of tax and spend for the sake of it; they would deliver visible, tangible improvements that local residents and tourists alike would actually use.

Let us be honest about the context we are in. Hospitality businesses are already under pressure from every direction. Costs are up, business rates are rising and the Government are making it harder to employ the very people the sector depends on. A sector cannot be taxed into growth, especially when it is already struggling to stay afloat. When Ministers or mayors say, “It’s only a pound or two a night,” that might sound small to us, but it does not feel small to a family booking a week away or a small hotel running on tight margins. In a domestic tourism market such as ours, price sensitivity is not a detail; it is everything.

As it stands, the proposal’s fundamental flaw is that we would not necessarily end up taxing tourists; we would tax staying. Day-trippers, who often add strain to local infrastructure pay nothing, but those who stay overnight, supporting local jobs and businesses, pay more. We risk sending the signal, “Come for the day, but don’t stay the night.”

North Yorkshire is the size of a small country, so who are we really taxing? More often than not, it will not be international tourists, but people from our own region: a family from Harrogate staying in Whitby or a couple from York spending a weekend in the dales. That leads to the concerns that this would not be a tourist tax in North Yorkshire, but a tax on our own communities enjoying their own county.

The issues of fairness extend even further. Scout leaders have raised real concerns about whether they would be impacted. Are we seriously considering a policy that would put a price on a Scout camp, a school trip or young carers receiving residential respite weekends? We should be removing barriers for young people, who have already had a rough deal from this Government, not adding to them.

Perhaps the biggest question is: why now? The reality is that this has not been driven by a tourism strategy; it has been driven by funding gaps. The Mayor of York and North Yorkshire, David Skaith, is operating with far less funding than many other devolved mayoralties, despite covering a vast rural geography. Instead of fixing that, we are handing over a simple new power to tax. When the Government will not fund regions properly, they give them a new tax and call it empowerment. Let us call it what it is: a workaround for underfunding, not a plan for growth.

If Ministers are serious about this policy, three things must be clear. First, every penny must be reinvested into the local community it was raised in, and towns such as Harrogate and Knaresborough should not be used as cash cows for other places. Secondly, businesses should have a genuine say—not just a consultation exercise, but a seat at the table. Thirdly, there must be clear exemptions for young people, charities and community groups. Without those safeguards, this is not a visitor levy; it is simply another pressure on an already stretched sector.

Tourism in North Yorkshire is not just about places; it is about people and the welcome that they offer. That is what brings people back time and again. Yes, let us empower local areas and give them the tools, but let us not pretend that this policy is fully thought through, or that it would deliver the fair deal that our communities deserve.

Before I finish, I have questions for the Minister, some of which we have heard already. Will this levy apply to short-term lets, such as Airbnbs? If not, how is that fair? What exemptions will there be for Scouts, charities, young people and unpaid carers? What formal role, if any, will town and parish councils have in this scheme? How can we ensure that their voices are heard by these mayors? How will the Government guarantee that the money raised is not just spent locally, but spent with genuine input from local communities? If we get this wrong, we risk pushing our tourism and hospitality sector over the edge, and cutting off our own nose to spite our face.

--- Later in debate ---

[The Minister for Local Government and Homelessness (Alison McGovern)]

As ever, it is a pleasure to serve under your chairship, Mr Efford. I am grateful to the right hon. Member for East Hampshire (Damian Hinds) for securing today’s debate on the proposed visitor levy in England. It has been an absolute pleasure to hear from—I think—nine Members on the Back Benches about their constituencies, all of which, I am certain, are equally lovable and great places to visit.

As Members have set out, this is an extremely important issue across the country. I respect the hon. Member for Droitwich and Evesham (Nigel Huddleston), who speaks for the Opposition. He has a passion for the tourism and visitor economy, and he is right to say—as other Members, including the right hon. Member for East Hampshire, set out—what an important part of our economy the tourism industry is. I agree with the hon. Member for Droitwich and Evesham on that.

I will focus some of my remarks on devolution, because the approach we are taking is based in the strengthening of devolution. We now know that mayoral devolution works in terms of economic growth. From the construction of the Elizabeth line here in our great capital to Greater Manchester’s integrated transport, devolution has delivered results in getting the infrastructure that we need for growth.

I just say to hon. Members that I am not immune to the arguments they have made about the challenges to economies in different parts of the country; those points have been well made. If somebody had told 13-year-old me that one day people would go for a mini-break on Merseyside, I would have thought they were barking up the wrong tree. But, believe it or not, tourists and visitors of all kinds have saved the city I love, so I am not remotely immune to the arguments Members are making. It is extremely important that we consider carefully how to grow those parts of our economy that really need it, and particularly coastal areas. I take what Members have said very seriously, and I will consider it as part of the Government’s consultation.

When I was listening to the right hon. Member for East Hampshire describe very effectively the effect of tourism on our economy, I wrote down the word “Brexit”, given the effect it has had. It is too late in the day for me to become grumpy now, so I will just crack on, because this is a serious subject. The truth is that our country’s economy needs to grow at a faster rate than it has over the past decade and a half or so. The question is how we make that happen. The truth about our country is that power is extremely centralised, which means we have historically taken decisions for those places with the most power—largely the south-east.

However, recent decades of devolution—under both parties that have been in power—have begun to show a different story: when we give local leaders real powers, they can take better decisions, invest for the long term and change their fortunes. That is what devolution is all about. Mayors already hold levers for growth, from transport to planning, skills and housing.

[Tom Gordon]

Will the Minister give way?

[Alison McGovern]

I will give way to the hon. Gentleman if he first allows me to give a little shout-out to my local mayor, Steve Rotheram. The Centre for Cities recently found that over the past decade under his leadership the employment rate in Liverpool has gone from 61% to 71%—a 10-point increase. That is a miracle, and I pay tribute to Steve Rotheram for his work on that.

--- Later in debate ---

[Tom Gordon]

I completely agree, and as Liberal Democrats we want to see devolution and the handing-down of powers. But, again, I come back to the question whether it is really meaningful devolution if, when I ask the Labour Mayor of York and North Yorkshire about removing the 9 o’clock time limit on disabled bus passes, his answer is that he does not have the funding to do it. These are not real choices if the funding settlements are not there in the first place.

[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.