An idea by Cornwall Council to raise £26m by charging tourists £1 extra a night, widely criticised by hoteliers, would be unworkable without parliamentary legislation.
Tom Flanagan, Cornwall Council's director for environment, planning and economy, last week raised the prospect of a bed tax as a means of generating more public funds from tourists at a meeting of the Communities and Local Government Select Committee discussing regeneration in Westminster.
The idea caused uproar among local businesses but both Malcolm Bell, head of Visit Cornwall, and the British Hospitality Association (BHA) warned that, even if the council were to adopt such an idea, it would need Government support anyway.
"As far as I know the Government is not interested in additional taxes, bearing in mind its commitment to be business-friendly," Bell said. "To my mind the only way it could be contemplated is through some kind of voluntary mechanism where the industry believed it was correct and supported it. And it certainly would not support a bed tax. We already have VAT at 20%, compared with France at 5.5%."
The BHA, whose chief executive, Ufi Ibrahim, last week spoke out in Caterer against a similar idea raised by Ryanair boss Michael O'Leary, also highlighted the impracticality of the idea.
"Any local authority thinking of introducing it would need Government support because it would need legislation," a spokesman said. "The industry already suffers from high taxation - the second highest on accommodation in the EU - which makes the UK very uncompetitive in Europe. We should be thinking of reducing taxes, not adding to them, in order to help UK tourism grow and create more jobs. A bed tax would be a very retrograde step.
"We believe the suggestion of a bed tax in Cornwall is very counterproductive - it will deter people from visiting the county, will be expensive to collect and is unlikely to yield the amount forecast. It will also unfair because it will heavily penalise Cornish hoteliers when those in other counties do not have to impose a bed tax. The Government rejected the idea of a bed tax in 2007 and that was the right decision," he added.
Meanwhile, Cornwall Council stressed that the idea was "not formal council policy at this time" and was "one of a range of ideas which are being considered by the council". It also pointed out that the idea had not yet been discussed by councillors.
What the hoteliers think
I don't think it is practical and I don't think it has any public support at all. You would rely on the goodwill of hoteliers and guesthouses to collect this tax, and that goodwill doesn't exist. So in terms of local government bright ideas, this wasn't one of them. We Cornish hoteliers] generate a lot more than £26m for our economy in local taxes, local spend, and employment of people locally. We don't need anything that would jeopardise that.
Mark Pilgrim, managing director of the Meudon, Mawnan Smith, Cornwall
The trouble is the council won't spend the money on selling /marketing Cornwall. If they said that they would use the money to specifically promote Cornwall, then I would be all in favour of it. But they are doing it because they are short of money and looking to make savings as a result of the cut in money from central Government. Bed tax would kill the goose that lays the golden egg. You might as well put a tax on ice-creams - it would be just as illogical. The council already raises money from tourists from the money they spend here. Tourism is the only industry really left in Cornwall - fishing and mining are all but dead.
John Gladwin, owner of Trevalsa Court, Mevagissey, Cornwall
I really don't think the council can be serious about this. I would be amazed if it went ahead. It really is the last thing the hotel industry needs.
Paul Robinson, owner of the Driftwood hotel, Portscatho, Cornwall
The hospitality industry already suffers from a skewed VAT playing field across Europe, with dear old us at the bottom of the slope, struggling to climb up. A bed tax just serves to widen the gap even further. Here in Oxfordshire, it is, I believe, pretty well recognised that the tourism industry has good potential to kick-start recovery, replace lost public sector jobs, and generally help pull this county up by the bootstraps. The recognition has to be converted into supportive action and by that I do NOT mean further taxation, be it local or central.
Anthony Lloyd, owner of Fallowfields hotel, Oxfordshire
The reaction from Twitter
jeanne_jeannie A tourist tax in Cornwall is just a bad idea! Bad for tourists & bad for the tourism businesses (ridiculous admin!) http://t.co/IuzMa4i
seasidesuffolk Cornwall proposing £1 a night ‘Tourist Tax' if successful would Suffolk Follow? http://t.co/9D1Ol5H
HeadlandHotel Utterly absurd!!
By Neil Gerrard
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