Derbyshire County Council, which boasts the popular Peak District National Park on its patch, has slated the Government after it announced that it will be giving mayors new powers to levy a ‘tourist tax’ on holiday accommodation.
The Reform UK council previously backed opposition Group Leader, Cllr Alex Dale, after he persuaded the Reform administration to join opposition to the East Midlands Mayor’s proposal to introduce a ‘tourism tax’ levy for overnight visitors to the national park.
But the Labour Government’s Local Government Secretary, Angela Rayner, presented its latest plan to allow mayors in England to impose a ‘tourist tax’ without a cap on how much they can charge and with limited controls and greater freedom over how they wish to spend the proceeds.
County council Deputy Leader, Cllr Stephen Reed, said: “It is ludicrous that this Government continues to think that it can tax its way to growth and shows it has no clue when it comes to economic management.
“This tax will increase pressure on businesses already facing numerous operating challenges. It will mean job cuts for local workers and increased costs for visitors, not just from abroad but for locals as well, at a time when the cost of living is still a real issue for lots of residents.
“Labour would be cutting off its nose to spite its face by applying this tax in Derbyshire.
“Derbyshire doesn’t have the Louvre or the Colosseum, it isn’t a fashion capital to rival Milan, and this isn’t York or London. We have a small tourism sector that punches above its weight, but we must remain competitive. This tax harms Derbyshire; it doesn’t help it.
“Worst of all, there is no guarantee that the revenue raised will go back to supporting the very sector they claim to be helping, or how much of what is raised will make it back to them. Most disturbingly, that determination lies solely with regional mayors, distantly removed from the businesses that understand the challenges.”
The Labour Government aims to introduce the levy on overnight trips – dubbed a ‘tourism tax’ – to help create an income for regional mayors to boost growth, including the Labour-led East Midlands Combined County Authority’s Mayor, Claire Ward, who oversees Derbyshire and Nottinghamshire.
Derbyshire County Council’s Conservative Group Leader, Cllr Alex Dale, won the backing of the controlling Reform UK county council at a meeting at County Hall, in Matlock, on February 11, in his call for the local authority to lobby the East Midlands Mayor to scrap the plans after outlining how he felt they could damage tourism in Derbyshire and the Peak District.
Cllr Dale told the meeting: “We are in a very competitive marketplace in this country with tourism and we want to bring people to Derbyshire and I really strongly think we should not take steps that may make people think twice about coming to Derbyshire.”
He has argued the Peak District and the wider county attract millions of visitors every year, generating £3.58 billion for the local economy and supporting more than 33,000 jobs across hotels, bed and breakfasts, pubs, restaurants, shops and visitor attractions.
Cllr Dale told the meeting this tourism is important for overall economic growth and it should be supported and not drained.
He claims that even though some may argue it is only a small extra amount for visiting tourists to pay – potentially £1 or £2 extra per room, per night – it is the ‘thin end of the wedge’ and once it is in place it will never go away.
Reform UK Leader, Cllr Alan Graves, previously said: “We as Reform councillors have raised concerns about proposals to impose a tourism tax on the Peak District, creating an unfair burden on businesses and families struggling with the cost of living.”
He added that it risks discouraging visitors while doing little to address infrastructure challenges, and he added that feedback has shown a ‘tourism tax’ will be another cost that people cannot afford, hitting those on the lowest incomes.
Cllr Graves added that asking people to pay more to visit will add to their tax burden and not protect the Peak District at a time when more should be done to support tourism and jobs by not pricing people out or reducing numbers and harming the local economy.
The hospitality industry’s trade body, UKHospitality, said a five per cent overnight levy across England may mean as many as 33,000 job losses and a £2bn hit to the economy, with areas more dependent on tourism being worst affected.
However, East Midlands Combined County Authority Mayor, Claire Ward, has welcomed the Government’s consultation response, published on September 10, on new powers that could allow mayors in England to introduce a small levy on overnight stays by working with the sector.
The Government and EMCCA argue the proposed Overnight Visitor Levy would support a range of activities to help attract more visitors to the region and encourage them to stay longer. The levy would be paid by visitors staying in commercial accommodation such as hotels, guest houses, holiday lets, B&Bs and campsites.
If introduced in the East Midlands, the Mayor says she will work with partners, businesses and stakeholders to shape any scheme to understand what is right for the region, while investing in transport, infrastructure and activity to grow the visitor economy, improve places for residents and visitors, and support local jobs and businesses.
Ms Ward said: “The East Midlands is an incredible place to visit, and people travel from miles away to enjoy the world-class sport and culture, beautiful countryside, thriving cities, market towns and historic places.
“But none of these things – whether it is the natural beauty of the Peak District, our heritage buildings, or world-class hospitality – will continue to attract visitors and improve their offer if we do not invest in them. The overnight visitor levy is a way that we can sustain investment – year after year – in the places and experiences that people will return to.
“Having seen this work in other places around the world, I am confident that we can make it work here. But to ensure that happens, we will work with partners, businesses and stakeholders to understand what is right for our region, how a levy could be designed to match that, and how any money raised could have the greatest impact.”
EMCCA says it has already committed to growing the region’s visitor economy by at least £1bn by 2035.
It believes a visitor levy could help support that ambition by funding improvements that make the region even more attractive to visit, including major events, culture and heritage, public spaces, destination marketing and support for visitor economy businesses.
Visitor levies are already used in many places around the world, including visitor destinations in Europe and the USA.
The Government has said the power would give local leaders more choice over how to raise and invest money in local priorities.
EMCCA says it will continue to work with the Government and other mayoral strategic authorities as the national policy develops, and any local proposals would be shaped through engagement and considered through EMCCA’s decision-making process.
Local Government Secretary, Angela Rayner, stated that the tax-raising powers would help fund local communities and the measure will give mayors the choice to raise and reinvest funding where it is needed most.
The Government has argued that England attracts over 130 million overnight visits each year and any new levy would apply to visitors at accommodation providers including hotels, holiday lets, bed and breakfasts and guest houses.
It claims research shows reasonable fees have minimal impact on visitor numbers, and it claims money raised could help fund local projects to improve communities and enhance tourists’ experiences, which could help attract more visitors without needing Government approval.
For now, the rate will be set at no more than five per cent in almost every major English city after Labour mayors agreed to cap their charges at that level.
The proposal is expected to be introduced in Parliament as a bill within months, and mayors will be allowed to charge a levy as a percentage of the price of an overnight stay rather than as a flat fee.
By Jon Cooper, Local Democracy Reporter