To ask His Majesty’s Government what assessment they have made of the impact of introducing a visitor levy on the cost of domestic travel and holidays within the United Kingdom.

My Lords, the precise design and scope of the visitor levy power is still under development. Our consultation closed on 18 February and the Government will publish our official response in due course. Mayors will need to decide whether to implement a levy and, if so, consult on specific proposals. This will inform their decisions regarding whether and how a levy will be applied and how any revenue is invested. Evidence from international schemes suggests that modest rates have a minimal impact on visitor numbers. Improved destinations and visitor experiences may also offset price sensitivity over time.

My Lords, I am grateful to the Minister for her Answer, but the facts in this country are probably a little different from those she has given. According to the World Economic Forum’s travel and tourism development index, the United Kingdom currently ranks 113th for price competitiveness. A soon to be published Oxford Economics study suggests that, even under the most benign visitor levy scenario, which is a £2 per room per night charge, the effect in 2030 would be millions fewer nights in paid accommodation, nearly £0.5 billion less in total tourism spending and thousands of fewer jobs. Given those figures, why are the Government contemplating a holiday tax at all?

I certainly agree with the noble Lord that the Government want to see the tourism economy in Britain reach its full potential. The decision on whether to introduce a levy will be for mayors, and they will need to consult ahead of making those decisions. As a mayoral power, the ability to create a visitor levy will ensure that those with the best understanding of their region can tailor investment towards growing the local economy, whether that be in tourism or other areas, bearing in mind its needs, including those of the accommodation sector. This puts the power back in the hands of mayors to develop their own tourism economy in the way that they see fit, and it may lead to new visitor attractions and better quality of accommodation.

My Lords, can the Minister confirm that, where there are no mayors, it will be up to local authorities whether to implement this levy? Will she undertake that, whether this levy is implemented locally or nationally, there is a consistent system of collection right across the country? Will she make sure that it is not as cluttered and badly designed as the Scottish system is now?

The power will be devolved to mayoral strategic authorities, because they cover the functional economic areas and mayors have strategic roles in driving growth. The power is principally linked to the growth remit that we have given our mayors and to the powers of mayors, and any revenue is expected to be invested in growth, an agenda for which mayors are responsible and accountable. They can use their mandate for change and take the difficult decisions necessary to drive it. That could include, for example, subject to consultation, giving a portion of revenue to local authorities to deliver the services that support growth, including in tourism and the visitor economy. It is important that mayors have those powers. It is for mayors to design the system that works for their local area.

My Lords, I welcome this levy, which should be used to help support what visitors come to see—namely, arts and cultural attractions. Do the Government recognise that reintroducing tax-free shopping would significantly boost the number of visitors and hotel revenue, as well as being a boon to the economy more widely, including creating thousands of jobs?

I always appreciate the noble Earl’s championing of culture and leisure, including the impact that that has on tourism, and I am grateful to him for the work that he does in that area. I am afraid the consideration that he asked about is very much the responsibility of His Majesty’s Treasury and not my department. However, we are proposing that revenues from the visitor levy will support local economic growth, including the visitor economy, and that can take the form of capital investment and the provision of growth-related services. Mayors can then take decisions informed by their consultation on how the revenue raise should be invested in their region.

My Lords—

My Lords—

It is the turn of the Labour Benches.

Does my noble friend the Minister agree that one of the key achievements of the last Labour Government was free entry into museums, which had a huge effect on boosting tourism? Can she assure me that this Labour Government will continue to do all they can to boost tourism in that way and keep free entry to museums and other cultural visitor attractions in this country?

I agree with my noble friend that that was a great step forward. I should declare an interest, as I benefit from that free entry when I am on my granny duty in the recesses. She makes an important point about access to leisure and culture, which we should always aim to make as widely available as possible, because it opens the eyes of not just young people but all of us to the richness of our history and culture.

My Lords, with regard to the introduction of a levy, which I personally do not support, will the Minister look at the situation in relation to current tourists who are taken ill? Those who have emergencies are well looked after by the NHS, but, at least in my own research, half of our NHS hospitals are not charging tourists who are not in an emergency when they should be.

I am sure that my noble friend Lady Merron, who is sitting next to me, will be happy to respond to that question. It is important that people who find themselves in a medical emergency get treated promptly and that that is dealt with as quickly as possible. It is reassuring for tourists who come to this country to know that they will receive support if they are taken ill while they are on holiday here. On the issue of charging, I will defer to my noble friend.

My Lords, there are some major tourist areas in England that are not part of a devolution deal and have no plans at present for a mayor. Why should they be disadvantaged in their areas and growth, based on not having a particular elected person in that area?

I have much sympathy with the noble Lord’s point. We have consulted on whether and how to extend the power to local leaders with similar geographic footprints and powers relating to transport skills and strategic planning, such as the leaders of the foundation strategic authorities. We will look at the responses to that and I will be able to inform the House in due course.

My Lords, for the avoidance of doubt, can the Minister clarify that the scheme that she is talking about would be applicable to England and not to Wales? That must be the case for two reasons: first, there is a facility in Wales for having these sorts of charges; and, secondly, elected mayors to take this forward do not exist.

My understanding is that this system is for English mayors.

My Lords, the Government’s priority today appears to be to reduce the cost of living. If that is the case, why do they feel that introducing new taxes to make holidays in the United Kingdom more expensive for British people is a good idea?

We would not have such a problem with the cost of living if the previous Government had not driven up cost of living pressures, as evidenced by the action we had to take in this Budget to take an average £150 off household energy Bills from April and to freeze rail fares and prescription fees for a year. We understand that potential visitors may have concerns about the effects of a new levy. That is why local leaders will run a formal local consultation before making use of the new power.

Will the money raised from visitor levies stay with the local area?

There is a very simple answer to that question, and it is yes.

My Lords, I ask a question by way of clarification. Will I have to pay this levy when I go up to watch my beloved Manchester United every week?

I suggest that the noble Lord, Lord Shamash, may want to think about a team closer to home—there are some very good ones near to where he lives. However, football allegiance apart, it depends on the accommodation that people are staying in. This applies only to commercially let short-term accommodation—only that will be in scope of the visitor levy. This includes holiday lets, hotels and guest houses, subject to local decisions on the scheme. The noble Lord always has the option to support a team closer to home.