Labour mayors pledge to cap Burnham's 'tourist tax' raid at 5% - as hotel owners warn that overnight levy will cost jobs
Labour's metro mayors have pledged to cap a proposed 'tourist tax' on overnight stays at 5% - after a furious backlash to the plans.
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Mayors will be given powers to impose an uncapped "overnight visitor levy" on anyone staying in hotels, holiday lets and bed and breakfasts in England, it was announced yesterday.
The tax will apply to all overnight visitors to towns and cities that decide to impose the levy, applying to each night of the stay.
After businesses suggested that jobs in holiday hotspots could be affected, the mayors wrote an open letter pledging to cap the levy.
The letter was signed by Labour mayors in London, Greater Manchester, Liverpool City Region, West Midlands, North East, West of England, West Yorkshire, South Yorkshire, East Midlands and York and North Yorkshire.
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In a letter to Chancellor John Healey and Local Government Secretary Angela Rayner, the Labour metro mayors said 5% represented a "reasonable ceiling" on the tax.
"It provides a balance of ensuring that local levies are not excessive, or vary significantly between regions, while also leaving room for local variation as appropriate," they added.
They added this would still allow for "meaningful investment" in local areas, adding that future rises in the rate would be "subject to local consultation".
Reform's two mayors and the pair of Conservative ones are unlikely to impose the levy on their regions after their national parties slammed the proposal on Thursday.
A government source said "it will be up to local leaders and local voters" in England "to decide what is right for their area".
Mr Burnham was mayor of Manchester when the City Visitor Charge was introduced in April 2023 - a £1 per room, per night fee - to pay for measures aimed at attracting more visitors.
The plans have sparked fury in the hospitality industry.
Trade body UK Hospitality warned earlier this year that a tax would raise the cost of holidays as households continue to face cost‑of‑living challenges.
The boss of one leading holiday firm told the Telegraph: "There will be a jobs bloodbath at a time when they’re trying to get young people into work."
Shadow Chancellor Andrew Griffith said it was "propping up dodgy town hall finances on the back of even higher youth unemployment."
Sir Keir Starmer first proposed introducing local tourist taxes in 2025.
Mayor of London Sir Sadiq Khan supports a tourist tax on overnight visitors, which could raise more than £350m a year for the capital.
He said: “A well-designed, modest levy has the potential to provide an important additional source of funding to support growth, strengthen London’s offer to visitors and help us remain globally competitive."
In Scotland, local authorities have the power to introduce a visitor levy on overnight accommodation set as a percentage rate. Edinburgh has brought in a 5% levy capped at five nights.
In Wales, a capped levy of £1.30 per person per night is set to be introduced in April next year.