Mayor seeks London hotel tourist tax – yet Government is blocking it

This week saw reports that London’s Mayor has sought the power to introduce a tourist tax on visitors to the capital as commonly seen in many cities across Europe and the wider world.

For some time if you arrived at a hotel or hostel in much of the planet a small levy was applied at check-in. For a hostel or one star it may be a few cents or zero. Stay at a five star at £400+ a night and pay, say, 11.38 euros, as in Paris.

Aside from Paris a similar levy exists in many of the world’s most popular cities including New York, Barcelona, Berlin, Lisbon, Rome, Vienna, Amsterdam, Hong Kong, Singapore – plus many more.

Yet England remains the stand out that lets many overseas visitors avoid such a tax when staying in hotels, despite many in England having to pay it when travelling abroad.

Help yourself?

With the Treasury seeming to rebuff plans for investment in London transport improvements in the spending review and Met police cuts looking likely, the chance to raise money locally seems one way to plug the gap – at least in part.

But in the centralised system we have in England no Mayor or council leader can do it. In many nations it’s a routine power given to Mayors from large cities down to smaller towns. They’d think it mad central government don’t let them have such powers to improve their local areas.

While it may blow the Treasury’s minds to give powers at a town-level, the fact they won’t to major world cities is symptomatic of the ludicrous lack of devolution as Whitehall holds on to power like Gollum in Lord of the Rings.

It seems ever more clear the Treasury under Labour doesn’t want to fund public substantial capital transport improvements (why repay a city that votes for you?) yet nor does it want London itself to even try to fund improvements.

Aren’t this government supposed to be “for the builders, not the blockers”?

That’s what the endless soundbites say. Except when it challenges the Treasury’s outdated thinking that is.

Treasury thinking

Despite a change of government Whitehall retains its strong desire for power and when it comes to, say, transport investment, simply shuffle a small sum of funding around the country. Want some investment Manchester? Sorry London, none for you.

What do you mean France has built twenty tram network at cities across the country since the year 2000 AND is spending billions each year in Paris?

No you cannot have similar – and no you cannot raise your own income.

*fingers in ear*

Manchester under Andy Burnham also wants a tourist levy but cannot thanks to the dead hand of the Treasury so hotels in the centre set one up. But it’s limited and all it really does is cleaning around the immediate vicinity rather than fund policing or public transport.

Nothing new

It’s all quite odd just how reluctant Whitehall is. There’s nothing new about tourist taxes. It’s now around fifteen years ago I turned up to a hotel on the continent which was the first time I paid such a levy. I think it was one Euro. I didn’t mind as such a small sum and after all I was putting pressure on the transport network, so what’s the big deal?

It’s an insignificant sum for cheap places and do the ultra wealthy staying in the finest hotels at vast cost care about a small additional cost?

It’s doing no harm in Paris where visitor numbers have bounced back strong since the pandemic.

Within the UK Scotland have broken free of Whitehall’s need for control – to some degree – and so Edinburgh will create a levy in 2026 which it hopes will raise £50m. Norway this week announced a similar move.

Not being so obsessed with centralisation as England, local authorities in Norway can decide themselves whether to adopt and apply the tax at their own discretion up to a cap, and vary by season.

But in the UK a Labour government won’t even give Labour Mayors of world-famous cities like London and Manchester powers a local Town Hall in France possesses.

This stultifying, suffocating centralisation needs to end. Labour seem as wedded to it as the Tories before. Do they want London (and other cities) to whither? If so they’re going the right way about it.