The UK government has confirmed it did not carry out a formal national impact assessment before introducing a tourist tax framework across England, a move that has drawn criticism from hospitality industry representatives concerned about potential job losses. Jim McMahon, the local government minister, defended the approach by emphasizing the devolved nature of the policy, stating individual local authorities and mayors are responsible for evaluating the tax’s effects within their jurisdictions.

The policy enables local areas to impose uncapped overnight visitor levies on hotels, holiday lets, and bed and breakfasts. Hospitality groups, including UKHospitality, have warned that a 5% levy could reduce sector revenues by approximately £1.6 billion and jeopardize tens of thousands of jobs due to decreased demand for domestic holidays. Estimates suggest that even a capped levy might cost the economy up to £2.2 billion and result in the loss of 33,000 jobs.

During a House of Commons debate, MPs raised concerns about the absence of evidence that the levy would stimulate economic growth or that revenues would be dedicated to tourism development. Emma Lewell, Labour MP for South Shields, expressed that her local tourism industry, heavily reliant on nearby family visitors, could be severely impacted. She highlighted that small family-run accommodations and hospitality businesses in her constituency opposed the tax, fearing it would deter visitors altogether.

The levy is set to apply to domestic as well as international travelers, with Tax Policy Associates estimating that 63% of the generated revenue would come from British tourists. Richard Ferrier, chief executive of Heartwood Collection, which operates Brasserie Blanc, underscored the tax’s likely effect on business travel, particularly midweek stays crucial for hotel viability. He noted that corporate guests visiting during the early week contribute significantly to hotels situated near large company headquarters, and the tax could reduce these visits.

The government has portrayed the tourist levy as an expression of devolved powers, allowing local leaders autonomy to generate revenue aimed at improving local infrastructure such as high streets, public transport, and tourism facilities. McMahon reiterated that there is no compulsory implementation of the levy, and the decision rests with local authorities determining whether it suits their area’s needs.