Angela Rayner battles Rachel Reeves over England tourist tax

Independent

5 days ago

Angela Rayner has reportedly called for the introduction of new powers to allow a tourist tax in England.
The deputy prime minister is pushing for councils to have the ability to tax tourist hotel stays, despite opposition from Chancellor Rachel Reeves, reported The Telegraph.
According to the outlet, Ms Rayner supported the inclusion of the power to charge tourist taxes in the Government's Devolution Bill published earlier this month.
Ms Rayner is responsible for the Government's policy on councils as Secretary of the Ministry of Housing, Communities and Local Government (MHCLG).
Treasury officials, including Ms Reeves, are understood to have opposed the measure due to concerns for the implications on hospitality businesses.
Shadow Chancellor, Mel Stride, told The Telegraph: 'Labour can't help themselves – it's always tax, tax, tax. Whether it's Angela Rayner or Rachel Reeves, the instinct is always the same – more taxes.'
She added that a levy on hotel stays would 'hit hospitality hard.
Inbound tourism is the UK's third-largest service export, with the UK the seventh most visited country in the world in 2023. A record 43 million foreign visits to the UK are expected this year, in addition to domestic travel.
The Labour mayor of Greater Manchester, Andy Burnham, is among local leaders asking to be allowed to charge more tax to visitors.
Other mayors have echoed his sentiment. Sadiq Khan, the mayor of London, said: 'A modest overnight accommodation levy, similar to other international cities, would boost our economy, deliver growth and help cement London's reputation as a global tourism and business destination.'
In June, the mayors of the Liverpool City Region, Greater Manchester, London, the North East, the West Midlands and West Yorkshire signed a joint letter calling for visitor levies across England.
A similar law is already in place in Scotland, passed in 2024, which allows councils to tax overnight accommodation if they wish to do so.
A MHCLG spokesman said: 'There are currently no plans to introduce a tourism tax in England. Places can already choose to introduce a levy on overnight stays through the Accommodation Business Improvement District model.
'We are also already empowering local leaders by removing restrictions and allowing the existing Mayoral Council Tax Precept to be spent on areas that drive local growth, such as transport and adult skills.'
Bath and Cambridge recently urged the government to allow them to introduce tourist taxes, becoming the latest in a string of English destinations seeking similar levies.
In a letter sent to Ms Rayner, the leaders of Bath & North East Somerset Council and Cambridge City Council state that their 'destination' cities are under growing amounts of pressure when it comes to tourism.
The councils are seeking a roundtable with the government to explore ways that they can support sustainable tourism in their cities, including the introduction of 'a modest visitor levy' with revenue that will benefit both residents and visitors.