The British Independent Retailers Association (Bira) has warned that the government’s new Overnight Visitor Levy could reduce spending on Britain’s high streets. While Bira supports the principle of giving local leaders more control over investment decisions, it expressed concern that the levy may impact visitor spending power.
New Levy Powers for Local Leaders
Earlier this week, it was announced that mayors and local leaders will have the power to introduce an Overnight Visitor Levy as part of the government’s devolution drive. The levy will be charged as a percentage of accommodation costs, with hotels and other providers responsible for collection. Spending plans are expected by early 2028.
Bira, representing over 6,000 independent retailers, highlighted concerns within the hospitality sector. They argue that any additional cost to visitors will reduce their spending power, impacting independent shops on the high street.
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Calls for Reinvestment Assurances
Bira is calling for strong assurances that revenue from the levy will be reinvested into the high street. After reviewing two mayoral strategic plans, they noted that high streets were barely mentioned. The association wants confirmation that money raised in an area will be spent there, supporting local businesses.
Andrew Goodacre, CEO of Bira, said, We understand why local leaders want the power to raise funds from visitors, and in principle, we support giving mayors more control over tourism investment.
However, he warned, Every extra pound a visitor pays in levy is a pound they don’t spend in independent shops and cafes.
Goodacre emphasized the need for cast-iron assurances that money raised in a town or city will be spent supporting local businesses. Without visible and direct reinvestment, he argued, the levy risks taking money out of local economies rather than putting it back in.
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Potential Impact on Local Economies
The concern is not just about the levy itself but also about how the funds will be allocated. Bira’s worry is that if the money isn’t reinvested into the high streets, it could have a negative impact on local economies. This is a valid concern, especially considering that high streets have been struggling in recent years.
The association’s call for assurances is a reminder that while the levy may provide much-needed funds for local leaders, it’s essential to consider the potential consequences for local businesses. As the plans for the levy move forward, it will be key to monitor how the funds are allocated and whether they have the intended positive impact on local economies.
With the spending plans expected by early 2028, there is still time for Bira and other stakeholders to make their case for reinvestment in the high street. As the debate continues, it’s clear that the Overnight Visitor Levy is a complex issue that requires careful consideration of its potential impact on local communities and economies.
