Amid government plans for an overnight visitor levy, council leaders from across the capital gathered outside Parliament to push to “keep the levy local.”
The proposed tourist tax is a small payment collected through accommodation providers, which will be instated by each mayor, with the aim of boosting the economy and developing infrastructure.
London Councils are asking that local authorities within the capital reserve 50% of the total collected in each borough, with this being part of the national framework legislation.
Cllr Claire Holland, Chair of London Councils, said: “Boroughs are determined to ensure that an overnight visitor levy is a success for Londoners, our businesses, and our tourist industry. Guaranteeing a fair share of funding to local authorities is vital to achieving this.
“By ensuring councils retain at least 50% of revenue raised in their area, the levy would provide much-needed funding for local services that support tourism and measures that drive economic growth. There would be clear benefits to local residents, businesses, and visitors alike.”
The introduction of a “tourist tax” has been successful across Europe, including in France and the Netherlands, where cities such as Paris and Amsterdam operate higher visitor levies.
Scotland is also implementing a similar plan to charge visitors for overnight stays.
Although the legislation has been passed by the Scottish national government, it is up to local councils to introduce the levy, set the rate and manage how the revenue is collected and spent.
Under the model currently being suggested for England, the system would be similar but with a key difference.
Rather than local councils having control over the levy, the power to introduce and manage it would sit with mayoral strategic authorities, such as regional mayors.
This means borough councils would have less direct control over how the levy is designed and how the money is distributed.
Tourism brought in approximately £17.6 billion in revenue from visitors to London in 2024, according to VisitBritain and the Office for National Statistics.
Despite this, there is still a large amount of economic pressure on local services.
London Councils believe the revenue generated from the levy could help boost services such as waste management, street cleaning and community safety.
Along with the initiative to keep half of the money generated from the levy, London Councils want confirmation that boroughs will not be overlooked when applying for government grant funding as a result of retaining levy revenue.
Council leaders say this would help give confidence to local businesses that they will see benefits from the introduction of the levy.
Councillor Holland said: “As ministers consider their next steps, we continue to make the case for boroughs to retain a fair share of revenues, while recognising the need to invest on a pan-London basis as well.
“We look forward to working with the government and Mayor of London on the design and implementation of the levy so that we get the best possible result for the capital.”
Ministers are expected to review responses to the consultation before deciding how the levy could be introduced across England.
London Councils propose that the remaining funds should be spent on a pan-London basis to support economic growth and services that are critical to the tourism economy, with decisions made jointly by the Mayor of London and boroughs.
However, council leaders warn that without guarantees in the national framework, boroughs may not have a formal role in designing the levy or deciding how the funding is distributed.
Photo by Marcin Nowak on Unsplash
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