This consultation response sets out BusinessLDN’s views on MHCLG and the Treasury’s proposals for designing a new Mayoral power to create visitor levies on overnight stays in England.
It’s hard to imagine a more challenging set of economic circumstances than the present situation into which to introduce an overnight visitor levy. The hotel and accommodation sector was one of most severely affected parts of the economy during the Covid pandemic and the recovery from it. In recent times, it has borne the brunt of government-imposed policy costs, including increases to National Insurance Contributions, increases in the statutory Living Wage and in business rates.
Despite the many economic challenges and increasing pressures on the sector, if the Government chooses to proceed with a visitor levy, it should focus on addressing the fact that London and the UK underspends on attracting tourists and promoting the capital more generally. BusinessLDN stands ready to work with the Government and with the Mayor to ensure the proposed visitor levy is well designed and implemented to address this point. To ensure that is the case, our over-riding priorities are:
- To ensure that the proceeds from any levy are used to support growth, with the funds hypothecated to focus on promoting London and attracting tourists;
- That levy collectors must have a meaningful say over what the money is spent on; and
- That simplicity is the watchword in the design and operation of the levy, to minimise friction and ensure it is well understood by accommodation providers and customers alike.
We would also urge the Government to look again at the case for reintroducing VAT-free shopping for international visitors and extending exemptions for Sunday trading rules to targeted areas, such as the West End and Knightsbridge, to mitigate the impact of higher costs resulting from the levy.