Labour mayors across England have announced they will cap a new "tourist tax" at 5% on overnight stays by visitors, following concerns from the hospitality industry about potential job losses. The tax, which would be a percentage of the cost of hotel rooms, bed and breakfasts, and other forms of accommodation, is set to become a new local authority power. However, the 10 Labour mayors in city regions across the country have pledged to voluntarily limit the charge if they choose to implement it, after listening to industry concerns about costs. In a letter to Chancellor John Healey and Local Government Secretary Angela Rayner, the mayors stated that 5% would be a "reasonable ceiling" for the tax, allowing for "meaningful investment" in local areas. They emphasized that any future levies would be subject to local consultation. The letter was signed by mayors from London, Greater Manchester, Liverpool City Region, and other regions. The government had previously committed to protecting budget holidays by ensuring low-cost accommodations pay the lowest levy, with the extra revenue to be reinvested into high streets and local transport. While Labour mayors support the new levy, others have expressed caution or indicated they will not introduce it. Local leaders, including those in areas without mayors, must clarify by early 2028 how the revenue will be reinvested. They will be allowed to offer exemptions, such as for campsites, but not for entire localities to avoid confusion. The government plans to introduce a bill to Parliament "in due course" to implement the levy, which will apply to both British and international visitors. Trade bodies and critics have raised concerns about the impact of the tax. UKHospitality warned that the levy could lead to job losses, with an average increase of £100 to £120 on family holidays. Conservative politicians have criticized the tax as an additional burden, pointing out that hotels are already subject to a 20% VAT. Reform UK leader Nigel Farage described it as a "holiday tax" and said his mayors would not support it. The idea was first proposed by former Prime Minister Keir Starmer and is similar to schemes in Scotland and other European destinations. Some cities in England already have voluntary charges, but until now, mayors have not had the power to implement such fees.