Proposed Visitor Levy

Rachel Gilmour Excerpts

Wednesday 25th March 2026 Westminster Hall

[Rachel Gilmour (Tiverton and Minehead) (LD)]

It is a pleasure to serve under your chairmanship, Mr Efford. As everyone knows, Tiverton and Minehead is the most beautiful constituency in the country, and I am privileged to represent a part of the country that sits firmly in the tourist belt and has such rich heritage. In my constituency, tourism is not an abstract construct—it is the lifeblood of our local economy. On Exmoor alone, the visitor economy supports around two thirds of all employment. We have 8.4 million visitor days a year, generating economic activity of £682 million.

In principle, I am a firm believer in localising power and placing decisions as close as possible to the communities affected. Therefore, the idea of giving local authorities the ability to introduce a visitor levy is not something I instinctively oppose. However, we must be honest about the context. Hospitality businesses are operating in the most extraordinarily challenging climate. Many are already swamped by red tape and administrative burdens, and introducing a new levy now risks imposing yet another layer of cost and complexity. Businesses will have to update systems, retrain staff and absorb the administrative load. For many small operators, that is not a trivial undertaking.

There have been references to European countries, but the fact remains that visitor levies across Europe typically sit alongside much lower VAT rates. If we want to maintain our competitive edge, the Government must think long and hard about this issue and get the balance right. If they wedded the tax to a VAT slash, as proposed by my party, they would have my ear, but only on the basis that it was a hypothecated tax for the sole benefit of my constituents.

If the Government are determined to press ahead, I seek very clear assurances on behalf of the people I represent. Any revenues raised must be ringfenced, without condition, for reinvestment in the local visitor economy—and, crucially, within the immediate geography in which they are generated. They must not be absorbed into broader local authority budgets unless clearly aligned to defined visitor economy strategy. Otherwise, any levy becomes an additional tax, not a growth tool.

There are further concerns; the removal of rurality from funding formulae has already disadvantaged large, sparsely populated constituencies such as mine, which spans two counties. The rural premium is real and it is significant. Areas without mayoral structures could be left at a disadvantage. Unless that is addressed before implementation, the gap will only widen.

Crucially, we must ask whether any levy would genuinely support the local economy, or whether the risks to the hospitality sector would outweigh the benefits. Visitor spending does not stop at the hotel door. It sustains pubs, shops, attractions and transport. Any reduction in visitor numbers could ripple across the entire local economy.

I place on record my positive recognition of the Somerset & Exmoor local visitor economy partnership, which is already doing vital work to strengthen and co-ordinate our tourism offer. Any levy must complement, not undermine, such efforts.