Camden Council plans to lead campaign for London-wide hotel levy

Plans to launch a campaign among London boroughs to introduce a tax on tourists staying overnight in the capital has been dismissed by the British Hospitality Association (BHA).

Camden Council hopes that it will gain widespread support for a ‘hotel stay levy' in order to go some way towards meeting the funding deficit in annual budgets, as a result of a 8.8% cut in central Government grants amounting to £2.6b. Services in Camden will be adversely impacted as a result of an expected £70m cut to its £350m budget over the next three years.

A levy imposed on hotel guests could only be introduced through central government legislation.

Theo Blackwell, Camden's cabinet member for finance, said that the council could raise up to £5m per annum if a levy of £1 is levied on all hotel rooms per night in the borough, along the lines of a similar tax operated by hotels in Amsterdam, Barcelona, Paris and Rome.

"The money would go toward paying for street cleaning to ensure that the locality is kept looking nice for tourists, residents and businesses.

"We are having to look at new ways of raising revenue as a result of the austerity measures. While we understand hotels may not like this suggestion, how can they expect the area in which they are located to be kept up to scratch, without making some financial contribution?"

Blackwell confirmed that Camden council would also explore the option of a voluntary tourism ‘tax', similar to the one introduced last year in Hackney, where £1 is added to the bill for each night's stay at hotels which choose to sign up to the scheme. The voluntary sum, capped at three nights, helps to fund training programmes and cultural events in the borough.

The BHA would lobby against any proposed hotel levy. Martin Couchman, deputy chief executive of the BHA, said that it would be a very difficult and highlighted that some European destinations, such as the Balearic Islands, had given up on the tax for this reason.

"It would add another layer of bureaucracy to hotels, which are already faced with 20% VAT, in addition to business rates, and will actively oppose it."

Previous attempts to introduce a hotel tax in Cornwall, York and Edinburgh have failed.

York City Council a step closer to proposed ‘bed tax' >>

Cornwall tourist tax idea is ‘unworkable' without legislation >> Bed tax gives me nightmares >>