Scarborough Town Councillors Demand Guarantees as Tourism Tax Proposal Looms

Local leaders in Scarborough are sounding a note of caution following government proposals that could see a new levy placed on overnight stays.

The move to grant regional mayors the power to introduce a levy on overnight stays has been welcomed by some as a potential "game changer" for the region. A consultation process is currently underway, allowing businesses, communities, and interested parties to submit input on how the fee should operate before the closing date of 18th February.

While proponents see a potential "game changer" for regional investment, Scarborough town councillors have raised significant concerns regarding the economic pressure on local businesses and the necessity of keeping funds within the communities that generate them.

Concerns for a "Sector Under Pressure"

The hospitality industry, a cornerstone of the economy in towns such as Scarborough, Whitby, and Filey, is already facing a "perfect storm" of rising costs. Councillor Sarah Mason highlighted that accommodation providers are currently grappling with higher national insurance, rising business rates, and escalating operating costs. She argues that an additional charge could undermine the fundamental strength of the local economy.

Mayor Thomas Murray echoed these sentiments, noting the vital importance of the visitor economy to the town’s identity. He expressed fears that the levy might have "unwanted effects" on a sector that is already struggling in the current economic climate.

Councillor Sarah Mason provided a detailed assessment of the risks:

"A visitor levy could be of value if the money raised in Scarborough was guaranteed to be spent in Scarborough. That guarantee simply does not exist today.

Without legal ring fencing and local control, we risk raising money here only to see it spent elsewhere.

Our accommodation providers are already under intense pressure. Higher national insurance, rising business rates, and escalating operating costs. Adding yet another charge risks undermining a sector that is fundamental to our local economy.

It also increases the cost of a holiday for visitors at a time when many families are already struggling."

She further stressed the need for concrete protection for local interests:

"Before introducing another levy, we need absolute certainty that it is a fair, necessary, and genuinely beneficial to the community that pays it.

It is entirely reasonable for residents and businesses to question whether any new revenue would truly come back to the areas that generate it.

Promises are not enough. Only legal biding safeguards will do."

The Battle for Ring-fencing

A central theme among coastal representatives is the demand for "ring-fencing"—a legal guarantee that revenue raised in coastal towns stays there rather than being absorbed into a wider regional pot. Councillor Rich Maw suggested that Scarborough would likely generate a significant portion of the total revenue and insisted that this must be reflected in how the money is spent.

Councillor Rich Maw stated:

"towns like Scarborough that are tourist destinations. We're going to perhaps bring in the lion's share of this perhaps only second maybe to Harrogate and as a result of that the money, or the vast majority of that money, must be spent in Scarborough.

I can't say 100% of it. For me the lion share would suggest that if conversations from the air's office and combined authority started to say Scarborough gets 25% and the rest of it gets divvied up about North Yorkshire, then on behalf of Scarborough Town Council, I would suggest that we'd all dig our feet in and suggest that we would not accept that."

Mayor Thomas Murray was equally firm on the expectation for the projected £8 million expected to be raised within the town:

"This may have unwanted effects to our hospitality industry, a massive part of our visitor economy, an important part of our town.

However, if the Labour York and North Yorkshire mayor chooses, as I expect he will, this council has a duty to be clear about what we expect.

We expect that the projected 8 million raised in this town stays in this town, not siphoned off elsewhere.

That this is additional funding Not a backdoor excuse to replace or reduce existing budgets."

Administrative and Fairness Hurdles

Beyond the financial allocation, councillors are questioning the practicalities of implementing such a tax. Councillor Janet Jefferson raised concerns about how the levy would be policed, particularly regarding occupancy and fairness across different types of accommodation.

Councillor Janet Jefferson commented:

"I think it should be ring fenced. I think  it's going to be very difficult to implement and police because is this levy going to be per person per day or what? Because a property could accommodates four people. What happens if six people come? Is that in breach? Seems to be an awful lot of anomalies with this.

Probably the idea is good in raising funds, but in an industry that's already in some cases on its knees. I think it's something that's got to give serious consideration and we'll have to a secure policy as how the money is going to be collected.

But that's my only concern. Is it going to be fair and how is it going to be policed?"

The Wider Coastal Perspective

The debate has divided political figures across the region. Filey MP Kevin Hollinrake has criticised the plan, stating it will "hit the tourism industry" and the "rural economy". Conversely, David Skaith, the Mayor of York and North Yorkshire, views the levy as a way to "turbocharge" investment into transport links for the coast and support the hospitality sector.

In the East Riding, covering towns like Bridlington, Hornsea, and Driffield, Mayor Luke Campbell has adopted a more cautious stance, suggesting a mandatory levy might not be right for a region where businesses are already struggling.

Scarborough and Whitby MP Alison Hume has called for "extreme caution" and transparency, insisting that coastal communities must be the primary beneficiaries of any funds raised locally. As the 12-week consultation period continues until 18th February, residents and businesses in towns from Pickering to the seafront are being encouraged to share their views on a policy that could fundamentally reshape the Yorkshire Coast's tourism landscape.