Local Tourism Tax Revenue Must Stay on the Coast, Demands MP

Calls are mounting from local representatives for any future revenue generated by a proposed visitor levy to be ring-fenced for the specific communities that raised it, ensuring the money is not absorbed into broader regional budgets.

Following the announcement in the budget that regional mayors could be granted new powers to introduce a charge on overnight stays, Scarborough and Whitby MP Alison Hume has stressed the need for extreme caution, transparency, and assurance that the funds benefit the Yorkshire Coast.

Addressing the proposals, Ms Hume highlighted the vulnerability of coastal areas and their essential role in the wider economy. She stated that while the concept of a transparently raised levy holds merit, its execution must guarantee localised investment.

Ms Hume offered the following comprehensive assessment:

"In the budget, powers have been given to the Mayors to levy a tourist tax, but the detail hasn't been worked out as yet.

My view very strongly is that this needs to be approached with caution and with full transparency and conversations with the hospitality industry.

In effect, a simple levy transparently raised is a good idea. However, it's really important that any taxes raised locally in Scarborough and Whitby. Let's face it, it's Scarborough Whitby in the villages are the jewel in the crown. And we need to see the money spent here."

The MP further elaborated on where this revenue should be directed, emphasising that improvements to travel infrastructure that supports both residents and visitors might be a suitable use for the funds.

"It's really important that any taxes raised locally in Scarborough and Whitby, let's face it, Scarborough Whitby and the villages are the jewel in the crown and we need to see the money spent here.

I think if it's raised locally and spent locally, that may include transport to and from the coast. I'm thinking more in terms of trains and buses than roads, I have to say.

But 50 million projected is a lot of money when you consider the Mayoral fund in total that they get is £18 million, it is as David Skaith says a game changer. So I think there needs to be a lot of conversations"

North Yorkshire Mayor Embraces 'Game Changer' Potential

The move to grant mayors levying powers has been met with enthusiasm by York and North Yorkshire Mayor David Skaith, who has long campaigned for a visitor tax, describing it as a "game changer" for the region.

Mr Skaith has publicly stated he would “love to explore” using the potential funds—which could raise an estimated £50 million a year locally, or up to £52.2 million-a-year based on £2-a-night charges—to improve connectivity in rural parts of the county, including links to Whitby and other areas of the coast.

The Mayor emphasised that investing in transport in these areas would not only benefit tourism but also support local communities who have faced numerous cuts to public transport offerings over the last decade. He intends to use the funds to "shore up those and actually increase them".

To turn these ambitions into reality, the York and North Yorkshire Combined Authority and York St John University have established a new Policy Lab. The lab's first project is detailing proposals for the visitor levy, with aims to ensure growth is sustainable and inclusive, and also to look at tackling coastal deprivation.

Mr Skaith stressed that he will be

“very much about working with the local authorities, working with businesses, working with the tourism sector as a whole, to really bring them all on the journey together and actually work out what we want to see from such a levy, how it would work, how it would be collected”.

However, the proposal is not without its detractors, as some hoteliers have already expressed that they are “deeply concerned” by the implications for businesses and the tourism sector.

East Yorkshire Mayor Stresses Caution and Evidence

Meanwhile, in the East Riding, Mayor of Hull and East Yorkshire Luke Campbell MBE has adopted a more cautious position, insisting that the final decision must be evidence-led and benefit the region.

Mayor Campbell raised concerns that implementing a mandatory charge might harm businesses already facing difficulties. He said:

“My instinct is that a mandatory levy probably isn’t right for this region. I’m concerned that adding extra costs for visitors could damage businesses that are already struggling.”

He confirmed that his support hinges on whether the measure supports local enterprise and increases visitor numbers. “My test is simple: does it help local businesses and bring more people into the area? If not, I won’t back it,” he added.

Mr Campbell has tasked officers at the Hull and East Yorkshire Combined Authority with providing a full assessment, and they will also consider whether a voluntary visitor contribution—allowing people to opt in to support local improvements—would be a better fit for the area. The government has confirmed that mayors are not required to introduce the levy and central funding will not be affected by the decision.

The Government's consultation on the measure allows businesses, communities, and interested parties to provide input on how the fee should operate. The consultation is set to close on 18th February. It can be found at https://www.gov.uk/government/consultations/overnight-visitor-levy-in-england