A committee of MPs has issued a stark warning to the Labour government about the growing discontent among residents over council tax increases. They’ve called for a complete revamp of the “unfair and regressive” council tax system and have urged for councils to be empowered to devise strategies better tailored to their localities, such as the implementation of a tourist tax.
Have your say! Should English councils have the power to set a tourist tax in your town, city or area? Comment below, and join in on the conversation.
Local authorities across England are grappling with escalating costs while being tasked with delivering more vital services to an increasing number of people on a shrinking budget. Last year saw nearly all councils choose to hike their rates by the maximum 5%, with some receiving special dispensation to increase it even more to stave off financial disaster.
According to a report by the Housing, Communities and Local Government (HCLG) Committee, which was highlighted by the Mirror, the current council tax system is labelled as “the most unfair and regressive tax in use in England today”. The report suggests that allowing each area to establish its own forms of local taxation, including a tourist tax, could generate additional revenue and alleviate the financial strain on local inhabitants.
Tourist taxes are implemented in various countries worldwide, typically as a minor additional charge on the cost of a hotel stay. The Welsh government is introducing such a tax, and it’s also applicable in Scotland. It’s often justified as a means to cover tourism-related costs like public transport and additional waste services.
However, the government has stated that there are no plans to introduce a tourist tax in England. This follows reports that Deputy Prime Minister Angela Rayner is advocating for local authorities to have the power to impose tourist taxes, but her proposal was rejected by the Treasury.
Chancellor Rachel Reeves reportedly vetoed the idea out of concern that it would decrease revenues for businesses already grappling with increased national insurance contributions and a government-imposed rise in the minimum wage.
Last month, a group of mayors, including Greater Manchester’s Andy Burnham and London’s Sadiq Khan, called for the introduction of a visitor levy to generate revenue from tourism. In a letter to Culture Secretary Lisa Nandy and Chancellor Rachel Reeves, they proposed that local authorities be granted the power to introduce a tourist levy in the Government’s devolution bill.
Have your say! Should English councils have the power to set a tourist tax in your town, city or area? Comment below, and join in on the conversation.
