Proposed Visitor Levy

Debate between Damian Hinds and Douglas McAllister

Wednesday 25th March 2026 Westminster Hall

[Damian Hinds]

I do not know if the hon. Gentleman heard the earlier intervention by the hon. Member for Torbay (Steve Darling), who made the point—quite rightly—that we cannot look at a single tax in isolation. I will come on to discuss that point, and I will invite the hon. Member for Uxbridge and South Ruislip (Danny Beales) to look at the maths on what happens when we add up all the taxes together and compare the cities that he has just mentioned with cities in this country.

We have lost market share, and it turns out that reaching the big target that the Government now have, to reach 50 million arrivals in the next few years, will involve—believe it or not—us losing more market share. Therefore, the great big ambition is for us to lose share of the global market for tourism. We should be much more ambitious than that.

Governments of all sorts and all flavours have acknowledged the importance of tourism, verbally and in writing. I will not go through all the sector deals and so on that there have been through the years. We now have, or at least anticipate, the visitor economy growth strategy from the current Government. However, I do not think—and I am not making a party political point here, because this applies to multiple Governments—that any Government in this country in my lifetime have ever given attention to this sector commensurate with its importance and potential.

[Douglas McAllister (West Dunbartonshire) (Lab)]

The visitor levy became law in Scotland in September 2024, allowing Scottish local authorities to apply a 5% charge on overnight stays. It is due to be implemented next year in my constituency and is estimated to bring in £1.7 million annually. Last month, I met Loch Lomond and The Trossachs National Park Destination Group to hear their concerns about the tourist trade. While I suspect the right hon. Member disagrees with a levy, does he agree that, if a levy is to be introduced, it should clearly be invested in a manner that benefits and strengthens the local tourist economy, in consultation with trade—not just to fill a black hole in council budgets?

[Damian Hinds]

The hon. Gentleman is a wise man, and he anticipates a point I will come to very shortly.

Under the previous Government, candidly, there were increases to air passenger duty, rises in visa charges, the introduction of the electronic travel authorisation at a price of £10, and of course the loss of VAT-free shopping for tourists. The new Government are not just carrying on with those things, but adding cumulatively to those costs at a significantly greater rate. They are doubling the price of the ETA, which will now be £80 for a family of four. In fact, ETAs and visas are now both considerably above European price levels—considerably so, in the case of visas. On ETAs, unlike others, we do not give even a discount, let alone an exemption, for children or for people over 70. The Government have also cut the marketing budget for VisitBritain by 41%.

On top of all that, they now propose to bring in a bed tax. What is that bed tax? We do not know. It could be many things. It could be per room or per person. It could be a fixed percentage of the room rate, a fixed amount or tiered fixed amount. If it is a tiered or fixed amount, what amount? In truth, however, whatever amount is set initially is probably pretty irrelevant. Let us not forget that air passenger duty started at a rate of £5 and £10 and now ranges between £15 and well over £200. Will children be discounted or exempt?

The consultation talks about giving powers to a mayor; what about places that do not have a mayor? What will the scope be? Will it include sleeping in a tent? Will it include holiday camps, static caravans, scout camps, school trips, pilgrimages, hostels, homestays or sleeper trains? We do not know the answers to any of these questions right now.