Labour MP Dan Tomlinson has welcomed the Government’s decision to give mayors and local leaders the power to introduce an Overnight Visitor Levy, arguing that the reform will allow regions to raise and reinvest money in growth, infrastructure and their visitor economies.
The Government confirmed this week that local leaders in England will be able to introduce a percentage-based charge on paid overnight accommodation, with the money raised retained locally. Ministers say the measure is intended to shift financial power away from Whitehall and give communities greater control over investment decisions.
Tomlinson said:
“This is the right policy to help raise funds to support regional leaders to invest in growth and the visitor economy in their region.”
He stressed that the power will be optional rather than compulsory, allowing different parts of the country to make different choices.
“Some Mayors will use it and do great things with the power. Others will decide not to use it. The opportunity for different decisions is good.”
A new power for local leaders
Under the plans, the levy will be calculated as a percentage of the cost of accommodation rather than a flat nightly fee.
The Government says that approach is intended to avoid disproportionately increasing the cost of lower-priced accommodation and family holidays. Revenue could be used to support areas such as high streets, public transport, events, public spaces and visitor attractions.
The decision forms part of Prime Minister Andy Burnham’s wider devolution programme, which is seeking to transfer more economic and fiscal power to mayors and local leaders.
Communities Secretary Angela Rayner said the change would allow local leaders to raise and reinvest money “where it’s needed most”, with decisions taken by people who understand their communities.
Tomlinson welcomes local choice
Tomlinson’s intervention focused strongly on the principle of local accountability.
He argued that areas choosing different approaches would allow voters to judge over time whether introducing a levy had delivered better outcomes.
He said:
“We will see how different places fare over time with different choices.”
Tomlinson also suggested the issue could become part of future mayoral election debates, with candidates having to explain to voters whether they would use the new power and how any proceeds would be spent.
That reflects Labour’s wider argument that meaningful devolution should involve not only greater local spending power but also clearer local political responsibility.
Hospitality industry raises concerns
The proposals have faced opposition from parts of the hospitality industry, which argues that an additional charge could increase the cost of domestic holidays and create further administrative burdens for hotels, guesthouses and short-term accommodation providers.
UKHospitality has cited research suggesting that a nationwide 5% levy could ultimately reduce economic output and affect employment in the sector, as reported this week.
Supporters of the reform counter that visitor levies are already widely used internationally and can provide a dedicated revenue stream to improve the places tourists come to visit.
Manchester and Liverpool already operate locally developed accommodation levy schemes, while similar systems are established in cities across Europe. Liverpool City Region Mayor Steve Rotheram has backed the new powers as a way to invest in tourism infrastructure.
Devolution with accountability
The Government is expected to legislate for the new powers, with local leaders required to set out how they intend to use any revenue raised.
For Tomlinson, the significance of the policy is that Whitehall will no longer make the same decision for every part of England.
His argument is that mayors should be trusted to decide what is right for their own regions — and then be accountable to local voters for whether those choices deliver stronger growth, better infrastructure and a more successful visitor economy.
