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The Caterer

Sleeping with the bed tax

20 July 2006
Sleeping with the bed tax

Sir Michael Lyons welcomes feedback from Caterer readers but wants them to further engage in the debate

You can tell the summer has arrived when you open the newspaper to read about the latest "shock horror" tax initiative. The strangest thing for me has been reading about all these "new taxes" and finding my name directly linked to them. So I'm glad that Caterer and Hotelkeeper has given me this opportunity to put these stories into context.

I know from my mailbag and my inbox - and now the 4,000-plus petitions collected by Caterer - that the tourist industry is actively engaged in the debate on the role, function and funding of local government.

All the contributions have been valuable to me, and they will certainly inform my analysis as I move towards drawing up conclusions and recommendations over the coming months.

Let me be clear: I have not yet made any recommendations on any tax. Nor am I in the business of making blanket proposals for new national taxes. But I do have a remit to look at ways in which some local authorities could use new financial flexibilities.

While one option that has been suggested to me is a tourist bed tax, similar to taxes introduced in places such as New York, it is by no means the only option I am investigating. There are many ways that tourists and business visitors can contribute to the upkeep of the places they visit - for instance, the congestion charging schemes in London and Durham.

On 8 May, I published a report outlining my latest thinking about the future role and function of local government. In my report, I emphasise the unique responsibility of local government in "place-shaping". In my view, local government does not exist just to administer services, it should also have a strategic view of a community's distinctiveness, and its future success.

So where does tourism fit into my thoughts on local government? The facts about tourism speak for themselves: tourism is one of the largest industries in the UK, accounting for 3.4% of the UK economy and worth about £74.2b in 2003. The 24.7 million overseas visitors who came in 2003 spent £11.9b here.

I want local authorities to be working for prosperity: this includes supporting our thriving tourist industry. Building and maintaining attractive and viable tourist destinations takes money, time and resources. But that does not necessarily mean that new taxes are the only answer; local government needs to work more efficiently and, with its partners, make best use of its resources.

In many areas, the local council works well with local businesses to invest in the infrastructure and amenities required by a successful tourist destination. What I want to consider is to what extent tourists and visitors should contribute to the costs of these activities.

I hope that these few words will give you a feel for the many issues and considerations that will feed into my final report, which I need to deliver to ministers by the end of this year.

  • For more information, or to download a copy of Sir Michael's latest report, visit the Lyons Inquiry website.

The Lyons Inquiry and bed tax

20 July 2004 Independent inquiry into local government headed by Sir Michael Lyons opened by John Prescott and Gordon Brown.

20 September 2005 Government announces extension to the inquiry's terms of reference.

15 December 2005 Lyons announces consultation on the future role of local government.

23 March 2006 Travelodge survey shows consumers believe hotels are already too expensive.

13 AprilCaterer launches Say No To Bed Tax campaign.

4 May Hospitality industry steering group on bed tax is formed, including representatives from Caterer, British Hospitality Association, VisitBritain, Tourism Alliance, VisitLondon and the Bed and Breakfast Association.

8 May Lyons publishes his latest thinking on the future role and function of local government.

13 July Travelodge and Caterer deliver more than 90,000 signed petitions to the prime minster, Tony Blair.

20 JulyCaterer delivers more than 4,000 petitions from readers to Sir Michael Lyons.

December 2006 Lyons Inquiry to report to government.

For more on bed tax, go here >>

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