England is an international outlier in the extent to which decisions are taken centrally, and at the same time has experienced some of the highest levels of regional inequality in the developed world. We believe the two are linked. Too many decisions have been made in Whitehall, far away from the reality of life across the country, and disconnected from the impact of those decisions. These have often not reflected the needs of places and communities across the country.

To change this, the Government has embarked on an ambitious agenda of devolving powers to local leaders with a new assumption of devolution by default. The Government’s devolution agenda will shift power closer to local communities, with decisions taken by democratically elected Mayors and local leaders who understand their areas best.

The landmark English Devolution and Community Empowerment Act 2026 introduced reforms to give local leaders clearer powers, greater responsibility and stronger accountability so that decisions affecting places can be taken closer to the communities they affect. These reforms support the Government's wider Rewiring the State programme, which seeks to shift power, funding and accountability away from Whitehall and into the hands of local leaders. The Act’s aim is to reverse the centralisation of decision-making which has held our country back for too long; to boost economic growth, strengthen public services, and restore public trust in politics.

For Mayors and other local leaders to take greater responsibility for driving growth and improving life in their areas, they must also have greater control over local investment. Giving Mayors and other local leaders greater power over tax revenue is a vital step in helping them drive investment and good growth in their areas.

That is why today, MHCLG and HMT have published the Government's response to the Overnight Visitor Levy in England consultation. The consultation closed earlier this year, and since then we have continued to engage with Mayors, local leaders and stakeholders from the visitor economy to strike the balance between a simple deliverable levy for industry and one which empowers Mayors and local leaders to raise revenue for investment in their area.

England is home to some of the world's most iconic visitor destinations, from its vibrant cities, breathtaking countryside and national parks, to historic seaside towns along its spectacular coastline. The visitor economy supports millions of jobs, enriches communities, and enhances the quality of life for millions of people. Yet there are few local levers available to help destinations invest in and sustain this vital industry.

A visitor levy will enable Mayors and other local leaders in England to choose to use a proportionate contribution from visitors to the region to reinvest in the local area. It is a major step in giving local leaders greater control over the decisions and funding that affect their areas, putting new powers over locally raised revenue into their hands for the first time in decades. Mayors and other local leaders are best placed to identify the projects and infrastructure that drive growth and make a place attractive for visitors and residents. Local leaders know their local history, local culture, the unique attributes of their places that draw visitors in, and what challenges local areas face. Along with our plans to devolve a portion of income tax and enable Mayors to retain some of the business rates generated in their areas, the visitor levy represents our commitment to creating a more accountable state, responsible to local people. This is about giving places the tools they need to drive good growth, in every part of the country.

Giving local leaders in England the power to introduce a visitor levy in their area will bring them in line with Scotland and Wales, as well as local authorities across France and international cities like New York and Amsterdam. We want to provide Mayors and other local leaders with a fiscal tool that they can choose to use; we understand that a visitor levy on overnight stays will not necessarily be right for every place, and so the choice of whether to introduce it will be for Mayors and other local leaders to take. That ultimately is at the heart of this devolution programme.

To develop the details of the visitor levy we have engaged extensively with the public, accommodation providers, charities and local leaders. In our consultation we tested views on the levy supporting local economic growth, including through strengthening the visitor economy. Our decisions reflect this wide-ranging engagement.

The visitor levy will be set as a percentage of the accommodation cost, ensuring that charges are proportionate to the price of the stay. A percentage rate model helps ensure that the levy is affordable and will mean a stay at a budget friendly hotel or guesthouse would attract a lower visitor levy than a luxury 5-star hotel in London.

All mayoral strategic authorities (MSAs) and foundation strategic authorities (FSAs) will have Overnight Visitor Levy powers. This recognises their role in driving local growth and ensures this fiscal power is available across England, to be used for unlocking stalled investment, improving infrastructure and delivering good growth across the country. The levy will enable Mayors and other local leaders to invest revenues in support of the visitor economy, experience and important local priorities.

It will be for Mayors and other local leaders to decide if the visitor levy is the right decision for their areas, following a consultation. The Government will provide non-statutory guidance to support those leaders who are considering introducing a visitor levy. Mayors will be able to set out their spending plans by March 2028.

https://www.theyworkforyou.com/wms/?id=2026-09-10.hcws330.0