Some thoughts on a tourist tax

The possibility of a local tourist tax is a regular topic for political discussion. Many councils, including the unitary authority in Cornwall, continue to ponder the benefits of using the mechanism to raise additional monies to support cash-strapped public services and have lobbied central government on this issue.

As far back as 2011, Cornwall Council’s corporate director for the economy, Tom Flanagan, attended a Westminster select committee and told MPs that a modest one-pound-a-night tourist tax could raise £26 million a year.

But there has also been considerable opposition to such a proposal. I have seen it described as “dangerous” and some people have expressed concern that it would negatively impact on tourism.

Interestingly however, a formal consultation in Edinburgh has just shown significant public support for a £2 tourist tax for the Scottish capital, and the local council is lobbying the Scottish Parliament to allow them the powers to be able to set a levy on tourist accommodation. Reports state that more than 2,500 residents and businesses responded to the consultation, which showed “90% of residents are supportive of a tourist tax, while 51% of Edinburgh accommodation providers also support it.”

Adam McVey, the leader of Edinburgh Council leader has welcomed the “huge swell of support for a tourist tax … with residents and all types of business backing a scheme that is fair and sustainable.” It is estimated that between £11.6 million and £14.6 million per year could be raised and invested in the Edinburgh area.

Alison Evison, the president of the Council of Scottish Local Authorities has meanwhile described the outcome of the consultation as “important news” and “hard evidence of an overwhelming appreciation of the potential benefits of a discretionary tax.”

In the context of Cornwall, there are three things which I think most people would accept to be true.

The first is that public services in Cornwall are greatly under-funded and, as a consequence, Cornwall Council, the Police, the local National Health Service and other public bodies are struggling.

The second is that, because of the UK Government’s austerity measures, Cornish residents are paying higher levels of council tax but getting less in return.

And thirdly, that the population of Cornwall increases massively in the summer months and this does have an impact on the provision of public services, which central government fails to properly recognise in its funding arrangements.

It seems to me that, unless the UK Government delivers fair funding for Cornwall, we have a duty and a responsibility to explore such options as a tourist tax to help safeguard local services all-year-round.

This is my column in this week's Cornish Guardian.