Labour Mayor slams Labour Treasury ministers over lack of tourism tax powers

Posted byCambridge Town OwlPosted inUncategorized

Not that you’d know from BBC Politics’ love-in with Team Nigel

It’s in the smaller, independent/online outlets that are picking up on the issue of taxing tourism similar to how other countries do so.

‘Get on with it’: Support builds for London-wide tourism tax – Greenwich Wire 11 Aug 2025

Labour Mayor Accuses Treasury of Blocking Tourism Levy Despite Devolution Pledge – Byline Times 26 Aug 2025

Rachel Reeves should allow local tourist tax – Institute for Govt comment 29 Jul 2025

Scotland has already legislated for a visitors’ levy

Which is why Edinburgh is less than a year away from bringing in their own visitors levy that will apply to Air BnB properties *and* purpose-built student accommodation rented outside of university term times. Here’s looking at you Cambridge! (I wrote about HM Treasury’s micromanagement here)

Tourist Information services

For a city council that has been so enfeebled by successive chancellors, a permanent revenue stream to pay for a civic tourist information centre is long overdue.

Cambridge is fortunate that one entrepreneur set up their own tourist information centre in The Guildhall, but in the grand scheme of things relying on the private sector to carry out civic functions as a political principle results in very patchy coverage and service delivery. Hence if ministers are serious about growing civic pride, they’ll bring forward radical solutions that can free up local councils to provide such services under a single civic brand. Promoters of the private sector solutions relied too much on assumptions that proved to be too strong in reality. Including:

  • That tourists have the time and patience to wade through all of the different providers of the same services, being able to verify what is in front of them is true, before selecting their choice and maximising their utility/satisfaction from their choice like the economics textbooks tell us consumers do
  • That tourists don’t want a trustworthy civic service that provides unbiased information with no financial incentives for one provider over another
  • That tourists quite enjoy the unmanaged crowds in the tourism hotspots
  • That tourists quite like enfeebled local government unable to keep the streets in a decent state of repair and cleanliness because lower taxes mean lower prices – right?
Remember when Michael Heseltine promised that everyone would be a winner with privatisation in 1994?

That went well looking at the water companies.

While ministers of all parties have been very reluctant to bring in such powers for local councils (otherwise they’d be in place by now), all eyes will be on Edinburgh to see how much revenue the Scottish Capital raises. Furthermore, it will give some idea of the elasticities – the responses from both tourists and firms in the tourism industry to what will be an additional cost.

  • By how much will tourism numbers overall change as a result of the levy? (They could rise in the longer term if the revenues re-invested makes for an overall better experience!)
  • By how much will hotel bookings change as a result of the levy? (How will this impact on the type of accommodation potential patrons/customers choose to stay in? eg in lower cost accommodation)
  • What will be the local economic impact of the re-invested revenues? (For example will it create more opportunities in the construction industry as money is spent on improving the street scenes?)

Parliament is back next week. Expect lots of big announcements.

If you are interested in the longer term future of Cambridge, and on what happens at the local democracy meetings where decisions are made, feel free to: