Tourism and hospitality businesses urge John Healey to axe overnight visitor levy plans

John Healey’s predecessor Rachel Reeves granted powers to England’s metro mayors to introduce European-style tourism taxes in her final Budget.

The Country Land and Business Association (CLA) has joined more than 30 tourism and hospitality organisations writing to new Chancellor John Healey and urging him to axe plans for overnight visitor levies.

Mr Healey’s predecessor Rachel Reeves granted powers to England’s metro mayors to introduce European-style tourism taxes in her final Budget.

Regions will be able to have £1 or £2 levies on visitors staying overnight, in a similar way to Barcelona, Paris or Edinburgh.

Both York and North Yorkshire Mayor David Skaith and West Yorkshire’s Tracy Brabin have expressed interest in bringing a tourism tax in, saying it would allow them to reinvest the funds in communities and transport infrastructure.

Mr Skaith could raise more than £50m annually with a £2-a-night rate.

However, businesses have warned that it will increase the cost of domestic holidays and could damage regional economies.

The CLA said analysis by Oxford Economics has suggested that the policy could result in 33,000 fewer jobs and a £2.2bn hit to UK GDP.

More than 30 businesses, tourism and hospitality organisations have now written to Mr Healey, urging him to axe the plan.

CLA president Gavin Lane said: “A tourism levy sends entirely the wrong signal at a time when many rural businesses are already under significant financial pressure.

“Business taxes seem as incoherent as they have ever been.

“Increasing taxes via a visitor levy while at the same time reducing VAT on visitor attractions and business rates for pubs and clubs seems very poorly thought through and confusing.

"The profit warnings from Greggs and Wetherspoons demonstrate that UK retail and hospitality is grappling with significant cost pressures, including 20 per cent VAT, business rates and rising labour costs.

“This is compounded in rural areas with poor transport links, weak digital connectivity and restrictive planning rules.

“Rather than introducing new costs for visitors and businesses, policymakers should focus on creating the conditions for this vital sector to thrive.”

New Prime Minister Andy Burnham appears unlikely to axe the policy, as he has said devolving more powers is one of his main priorities.

He is expected to make a speech on Friday setting out further details in this area.

While Greater Manchester Mayor, the city’s Business Improvement District (Bid) introduced a voluntary visitor levy to raise funds.