196. A tourist tax as a means of raising revenue
is an attractive option in various regions including the South
West. The Local Government Association argued: "Levying a
tourist tax on bed nights by domestic and foreign overnight visitors
would be worthwhile in some areas, being relatively easy to implement
and funding services used by tourists."
Peter Lacey from Somerset Association of Local Councils stated:
"My members would say that the parishes pick
up a significant part of the tourist costs in terms of local provision
of public conveniences, in terms of tourist information centres,
in terms of all sorts of support that the parishes give which
is not related to the people of the parish who pay the tax. It
is related to the businesses of the parish."
But he also warned that a bed tax could be a serious
disadvantage to those who run small bed and breakfast businesses,
potentially forcing these businesses to close. "I do not
see a hotel as the problem; it is the bed and breakfast that is
the problem. That is a significant part of the market."
Francis Cornish from South West Tourism noted:
"Our research has shown that for every pound
the tourist spends only 21p is spent on accommodation. You are
hitting only part of the target with a bed tax. [
45% of the £8.3 billion per year which visitors spend in
the south west is spent by day visitors, people who do not stay
197. He also warned of the potential disincentive
"For the average American family of four going
to any of 52 prime cities in the world, the tax burden on London
is the second highest of the 52. In other words, there are 50
places cheaper in tax terms to go to. In terms of competition,
the tourism business, hotels, restaurants, catering for tourists,
the attractions or whatever in the south west are already facing
an uncompetitively high rate."
Andrew Sugden from the North East Chamber of Commerce
was also cautious:
"Tourism is growing in the north east and we
are very proud to see it grow at the rate it has, but at the same
time it is very much emerging and to threaten that by levying
additional charges on tourists is something we would feel very
198. The Committee believes that a tourist or
bed tax could generate funds to reinvest in services for tourists,
thus bringing fringe benefits for local people and businesses.
199. Overall we believe that local authorities
should have the opportunity to introduce a 'basket of local taxes'.
However, it is important to acknowledge that they will not raise
enough revenue to replace the existing council tax and that they
should be seen as nothing more than a supplement. It should also
be acknowledged that the primary role of such local taxation should
be to generate behavioural change, i.e. a congestion charge should
lead to reduction in car usage, rather than just seek to generate