Angela Rayner pushes councils to tax tourists despite business concerns

In England, discussions have been ongoing regarding the introduction of a tourism tax to help local councils generate revenue from foreign visitors. Angela Rayner, the Deputy Prime Minister, has been advocating for the inclusion of these powers in the recent Devolution Bill published earlier this year. However, she faces significant opposition from Rachel Reeves, the Chancellor, who fears that introducing such a tax could negatively impact local hospitality businesses. This debate follows a wave of requests from various city councils, including those in Bath and Cambridge, asking for the ability to impose levies on tourists to address increasing pressures from tourism. Local authorities such as Greater Manchester and London have echoed these concerns, with mayors like Andy Burnham and Sadiq Khan expressing their support for the introduction of a modest accommodation levy. They argue that such a measure would not only aid in managing the burdens of high tourism but could also help enhance the local economy and support vital public services. They highlight that the current state of tourism is critical to the UK economy, considering inbound tourism is one of the largest sectors and contributes significantly. Despite the calls for implementing a tourism tax, it is important to note that currently, there are no set plans for its introduction in England. Local councils may already opt to charge levies on overnight stays through existing legislation, such as the Accommodation Business Improvement District model. This regulatory environment allows councils some latitude, but the fear of potential backlash from local businesses has kept the idea of a broader tax system in limbo. The situation is further complicated by contrasting views within the Labour Party. While Angela Rayner supports the notion of allowing tourist taxes to balance the costs incurred by local authorities due to increased visitor numbers, others within her party, including Mel Stride from the opposition, argue that the instinct to impose more taxes is counterproductive and could harm the already strained hospitality sector. Ultimately, the future of any tourism tax in England remains uncertain, caught between the need for increased local funding and the implications it may have on business and tourism growth.