England's mayors handed power to impose tourist tax in Burnham devolution drive

By Andy Bruce

MANCHESTER, England, Sept 10 (Reuters) - Regional mayors in England will be handed the power to charge a levy on overnight stays, Britain's government said on Thursday, as it pressed ahead with a tourist tax that Prime Minister Andy Burnham hopes will help move power and money away from London.

The Overnight Visitor Levy, which drew immediate criticism from the hospitality industry, gives mayors the option to tax people a percentage of the cost of their stay.

Burnham, who replaced Keir Starmer as prime minister in July, sees the levy as a way of financially empowering local leaders. He said last week the tax would come into force towards the end of the next financial year, with mayors expected to set out spending plans by early 2028.

"This measure will give mayors the choice to raise and reinvest funding where it's needed most," said Angela Rayner, Secretary of State for Housing, Communities and Local Government.

"It'll help support the local services, public spaces and attractions that both residents and visitors rely on, with decisions taken by people who know their area best."

UKHospitality, which represents the sector, said the move would hurt British families and add to red tape.

"Give mayors one tax-raising power on one sector and they will pull that lever until it snaps," said Chief Executive Allen Simpson.

Simpson cited research by consultancy Oxford Economics estimating that a fully implemented 5% levy by 2030 would cost around 33,000 jobs and reduce economic output by £2.2 billion ($2.98 billion).

The industry also argues that British hospitality already pays 20% sales tax, double the norm across much of Europe.

Scotland has already moved ahead on the issue. Edinburgh launched a 5% levy in July, capped at five nights.

($1 = 0.7381 pounds)

(Reporting by Andy BruceEditing by Gareth Jones)