‘Tourist tax’ could be an option in future, says Southwark Council

Katherine Johnston (04 March, 2020)

Lib Dems have been pushing the council to generate more income of its own

33706Cllr Humaira Ali, pictured outside Bermondsey station during the general election campaign is backing a voluntary tax to raise funds for the council's services

Labour councillors have refused to commit to an optional ‘tourist tax’ in Southwark – but say they haven’t completely ruled the idea out.

The scheme, which would involve a voluntary levy on hotel stays, was proposed by the Liberal Democrats at last Wednesday’s council assembly.

They say novel ways of generating income will be the only way to protect people living in the borough from increased charges and fees.

Currently councils have limited powers to implement mandatory charges, but many are lobbying in favour. But they can get around this by making it ‘opt-in’. Boroughs to do this include Hackney.

Speaking at the budget-setting council assembly on Wednesday, February 26, Bermondsey councillor Humaira Ali called on the Labour-run local authority to stop passing costs onto residents in the form of car parking charges and controlled parking zones (CPZs) and instead focus on making money.

Tourist levies have been put in place in many cities around the world, including those struggling with the effects of ‘over-tourism’, such as high numbers of properties being taken out of the rental market and instead being let for short term stays, including Airbnb homes.

Cities in France, Italy and Germany all have some form of levy.  This year Amsterdam in the Netherlands joined their ranks with a room rate and further increased charge for visitors staying in Airbnbs.

Across the UK local authorities have been debating the idea since Edinburgh first voted in favour. Funds raised will help manage large-scale events and infrastructure affected during peak tourist season.  A Local Government Association survey found 53 per cent of UK residents would support the scheme.

MPs have warned that it could have a negative impact on struggling hotels.  An all-party parliamentary group for hospitality argued that if this type of tax is to work long-term there would need to be a VAT reduction on hotels to help protect the industry.

Councillor Victoria Mills, the council’s cabinet member for finance, performance, and Brexit, said there was a lot more work to be done to before seriously considering the scheme.

“We are always looking into new ways to innovate financially, and this includes investigating introducing a voluntary tourist tax,” she said.

“However, it would have been irresponsible to vote for the Lib Dem budget proposal as without significant further work we cannot yet know how much money a tourist tax would generate.

“We should not make budget decisions based on conjecture and guesswork.”

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