A tourist tax could provide funds for public services and help finance regional authorities, York and North Yorkshire's mayor has said.
Mayor David Skaith said he would be in favour of a visitor levy which could also be used to help pay for the upkeep of tourist hotspots.
The Labour mayor has joined senior York councillors and York Central MP Rachael Maskell in calling for the levy amid debate about its effect on the local tourism industry.
The Government has said it has no plans to give local authorities in England powers to introduce tourism taxes.
It comes after West Yorkshire Mayor Tracy Brabin told MPs a visitor levy had been floated in talks with Chancellor Rachael Reeves about more tax powers for regional authorities.
It follows the introduction of a 5 per cent tax on accommodation charges set to come into effect in Edinburgh in July and £1-a-night charges in Manchester using legal workarounds.
Labour’s Ms Brabin told the Housing, Communities and Local Government Committee tourist taxes could help mayoral combined authorities become more financially self-reliant.
Zoë Billingham, of the Institute for Public Policy Research (IPPR), told the committee on Tuesday, January 28 visitor levy and other tax powers would help support devolution more broadly.
She added the Government’s position of not increasing taxes beyond the hikes announced since Labour took office last year appeared to be behind their reluctance to allow visitor levies.
Ms Billingham said:
“It happens in other European cities like Barcelona, and is an absolutely low-hanging fruit because it does not actually take any tax-raising powers away from central Government, it is instead creating a new form of fundraising at the regional level.
“If the Government gave the freedom to mayors to increase taxes, it should be politically on the mayors to then decide whether, politically, they want to raise those taxes and then take responsibility for that spend and that tax in that area.”
Mr Skaith said mayors would need more powers to raise their own funds as they take on more responsibilities.
The mayor said:
“York and North Yorkshire are amazing places to visit and welcome more than 25m visitors a year.
“A modest visitor levy, like those in most European cities, would allow us to invest in the public services, helping us to keep our great places attractive for both residents and visitors, as well as improving services that residents rely on, such as transport.”
The mayor’s comments come amid debate about how a tourist tax would be implemented in York, who would get powers to levy it, and whether or not it should happen.
Labour’s Coun Claire Douglas and Coun Pete Kilbane, York Council’s leader and economy spokesperson respectively, have both backed a visitor levy.
Coun Kilbane has said they were lobbying the Government to get the powers to levy charges so the council could control how the money is spent.
Charges have been introduced in places such as Manchester by setting up accommodations business improvement districts (BIDS) who collect and spend the money.
Labour York Central MP Rachael Maskell has also joined calls for a tourist tax, estimating one could raise between £1.7m and £3.4m-a-year for the city.
But the proposal has faced opposition from hotels and from the Hospitality Association York industry body amid fears it could put tourists off.
They have said it would come as the industry is already facing mounting costs including from upcoming minimum wage and National Insurance hikes.
Others including York-based sales and marketing business owner Keith Rozelle have said they would welcome the charges.
Mr Rozelle, who has drawn up a business case for visitor levies, told the Local Democracy Reporting Service (LDRS) they would help fund York’s offer for tourists.
He added York should follow Manchester and set up a BID to collect the charge.
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