Budget 2025: David Skaith presents Chancellor with £52m plan for York and North Yorkshire tourism tax
Mayor David Skaith has presented his proposal for a tourism tax to the Chancellor ahead of the Budget, with research showing it could raise £52m for York and North Yorkshire.
Mr Skaith travelled to Downing Street this week to meet Rachel Reeves and show her research on visitor levies from York St John University.
Yorkshire’s Labour mayors have been pushing Ms Reeves for powers to impose a European-stye tourism tax on overnight visitors.
They are hoping for an announcement in next week’s Budget, where the Chancellor will have to try and fill a yawning gap in the public finances amid a struggling economy.
Mr Skaith hopes Ms Reeves backs the visitor levy proposal, as the small charge that is applied to accommodation to invest back into the area would not go on local people.
Currently, only Scottish councils can officially introduce a tourist tax, after Holyrood passed legislation on this last year, however there are workarounds which have allowed Manchester to add a £1 fee on hotel rooms.
Ms Reeves has previously been reluctant to part with tax-raising powers, with former deputy prime minister Angela Rayner reportedly losing a battle with the Chancellor to allow such taxes.
However, Mr Skaith told The Yorkshire Post that conversations with Ms Reeves had been “positive”, with their meeting this week indicating a potential breakthrough.
The mayor presented findings from the Policy Lab collaboration between York and North Yorkshire Combined Authority and York St John University.
This found that a £2 visitor levy, per room per night, could generate £52m each year for the combined authority.
“This kind of money would be transformative for our region,” Mr Skaith said.
“That’s our pitch to the Treasury, that this is vital for an area like ours.
“It could make a huge difference with transport, strengthening our communities and enhancing our tourism offering. That would be truly transformational.”
For context, the combined authority said that its current annual bus budget is £7bn, while Mr Skaith has £18m for his mayoral investment fund.
Concerns have been raised that a visitor levy, alongside North Yorkshire’s double-rate of council tax for second homes and holiday lets, could put off some of the six million tourists that stay overnight.
However, Mr Skaith cited the example of European cities, like Barcelona, which have not seen visitor numbers drop.
“I see it as a great way to promote the whole sector even more,” he said.
“This is a very common practice in Europe and we are not seeing numbers not drop off at all.”
Prof Brendan Paddison, Dean of York Business School and professor of tourism geographies who carried out the research, said the key to getting the public on board with a visitor levy is ensuring “there is real transparency on how that money is spent and where it is spent”.
“It’s important that the tourism and hospitality sectors do get a slice of that pie,” he explained.
Prof Paddison suggested there could be signs across York and North Yorkshire identifying that money coming from the mayor’s tourism tax had been used for improvements to the public realm.