Mayor branded 'megalomaniac' as North East tourist tax feud erupts

Kim McGuinness is set to be handed the power to charge holidaymakers a new levy on stays across the region, under Government plans announced last month.

The controversial new tax is expected to amount to no more than 5% of the cost of overnight bookings at hotels, holiday lets, bed and breakfasts, and guesthouses across Tyne and Wear, Northumberland, and County Durham.

Ms McGuinness has long called for the power to raise extra revenue from tourists, saying that millions of pounds could be pumped back into improving the region’s cultural offer.

But the idea has provided a backlash in the hospitality trade and is opposed by many of the council leaders who sit around Ms McGuinness’ cabinet table.

The Reform UK leaders of Durham, Gateshead, South Tyneside and Sunderland councils wrote to the Labour mayor in September asking her to rule out imposing a levy, while Northumberland’s Conservative administration has also vowed to try and stop the scheme going ahead.

That means council leaders could potentially block the levy if the policy came to a vote at the North East mayoral authority cabinet, which is made up of the mayor and representatives of the area’s seven local authorities.

Such opposition prompted Ms McGuinness to ask Prime Minister Andy Burnham to address the decision-making power on a tourist tax at a meeting with other regional mayors last week, the Local Democracy Reporting Service understands.

It is thought that she would want the ability to impose the overnight levy to sit directly with mayors, without requiring cabinet approval.

Reform’ Darren Grimes, the deputy leader of Durham County Council, accused Ms McGuinness of being a “megalomaniac mayor”.

He said: “In May last year, the people of the North East voted in their hundreds of thousands for councils that would stand up for them. Kim McGuinness has just asked the Prime Minister to make those votes worthless.”

Coun Grimes added: “Elected leaders turned into spectators, while one Labour politician in Newcastle decides what happens in your town.

“Our residents didn’t vote for us to nod along. They voted for us to say no when no is the right answer. And we will keep saying it, whether the mayor likes it or not.”

Many European cities already have similar taxes on visitors and Edinburgh recently launched a 5% charge on overnight accommodation bookings, while Liverpool charges a £2 nightly rate already and Manchester has a £1 charge.

However, the idea has been heavily criticised by hospitality sector leaders who fear it would be an added burden on businesses already struggling with rising costs.

A £1-per-night tourism levy was part of the mayor’s election manifesto in 2024, though the Government has since decided that it should be charged as a percentage of the cost of accommodation – rather than as a flat fee.

Ms McGuinness said: “Reform are plotting to stop multi-million pound investment in North East jobs and tourism – I will not let them play politics with our future. When I was elected as the first North East mayor I said my plan is to introduce a small charge on hotel rooms and use this to fund major events in our region. I guarantee this will create jobs and bring in thousands of tourists. There is no Reform plan to grow tourism. Nothing.

“Right now, overnight levies are planned or in place in London, Manchester, Edinburgh, North Yorkshire and more. In Liverpool hotel groups themselves introduced it because they know these funds help them compete against other cities for tourists. I am not prepared to let the North East slip behind while others take our visitors. It would be incredibly damaging to the Northumberland economy if North Yorkshire, for example, spent millions promoting its countryside and we spent nothing. This small visitor levy creates North East jobs, Reform want to block it.”