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11
Oct
A game changer or madness?: The arguments for and against a tourist tax
Is a policy to charge on overnight room bookings in York and North Yorkshire a "game changer" or "madness"?
That’s a debate that politicians in Harrogate, Knaresborough and Ripon have been having this past week over plans for a tourist tax.
Mayor David Skaith, Labour Mayor of York and North Yorkshire, is a huge proponent of the tax, which he says could raise £26 million a year and help to reinvest in the region's tourist sector.
However, Conservative politicians in the county fear it is another financial burden that local businesses will have to bear and will deter visitors to the region.
The Stray Ferret has taken a closer look at the arguments for and against the controversial policy.
Four reasons for the tax
1. Opportunity to invest
Mayor David Skaith has been a long proponent of the tourist levy and on more than one occasion has described it as a “game changer".
The policy is a chance to raise revenue locally and reinvest it into the region, he says.
Mayor David Skaith talking to businesses at the Crown Hotel in Harrogate about his plans for a visitor levy in York and North Yorkshire
For Mr Skaith, the new policy is also an opportunity to invest. When pressed on the topic, he often points to this argument to push the positives of the levy.
He told a Skipton and Ripon area constituency committee this past week:
To keep York and North Yorkshire looking like it does costs a huge amount of money. We have an opportunity to invest in the sector to grow it, support it and attract more people here.
2. Helps to relieve pressure on services
A central point of the tourist tax is that it gives mayors and local leaders the chance to relieve the pressures that high visitor can have on an area.
Cities such as Manchester, Liverpool and Edinburgh all have versions of a levy, which are used to clean streets and set up marketing campaigns to increase footfall.
Mr Skaith has pointed to the need to use the levy to also improve services that residents who live in the region rely on.
He said:
York and North Yorkshire has something for everyone. Millions visit every year, and that’s why a visitor levy could be a total game changer for us.
Thriving communities and thriving destinations go hand in hand, but welcoming so many visitors puts pressure on the infrastructure and services our residents rely on.
3. Money can be targeted
On multiple occasions, Mr Skaith has argued that the money raised from a tourist tax can be invested into projects to improve an area.
This could include projects for the high street, transport and other services to help footfall.
The Labour mayor said he plans to unveils a list of potential schemes which could be invested in to help the tourism sector before the end of the year.
Cllr Felicity Cunliffe-Lister.
Cllr Felicity Cunliffe-Lister, Liberal Democrat for Masham and Fountains who owns Swinton Park estate, who supports the overnight levy, said the policy could work if it is spent intelligently.
She said:
Tourism does generate wealth and it generates jobs, but it does so at an enormous cost to local residents. If this tax is spent intelligently, it will address this.
4. A chance to grow the sector
Beyond the need to raise money to cope with the pressures of high visitor numbers, supporters of a tourist tax also point to the opportunity to grow the sector.
At a Harrogate and Knaresborough area constituency committee last week, Mr Skaith said the policy was a chance to invest in York and North Yorkshire’s visitor economy and grow it.
He pointed to the fact that some areas of the county, such as on the coast, struggle outside of the summer season to attract visitors.
Mr Skaith said:
I see an opportunity to really grow the visitor economy. If we go around much of our region in the summer, we are incredibly busy and at Christmas time we get a lot of tourism. But outside a lot of those times, we are quite quiet particularly in our coastal areas.
He added that investing in cultural events and skills of the hospitality sector could help to grow the industry and help it retain visitors all year round.
Four reasons against the tax
1. Businesses are already struggling
Perhaps the biggest reason for those opposing the tax is that businesses and people are already struggling with the cost of living.
At a Skipton and Ripon area constituency committee last week, Sir Julian Smith, Conservative MP for Skipton and Ripon, said local businesses, such as hotels, were already “on their knees”.
Sir Julian Smith speaking in the House of Commons.
Sir Julian described the policy as “madness” and pointed to National Insurance and utility increases, which he said were already putting a financial burden on businesses.
He said:
This tourism tax is a madness. These businesses who I and you are all meeting regularly are on their knees at the moment.
I can’t speak strongly enough for that group of people who provide employment to our young people across the area and how this tax will cause many, many problems.
2. It will make holidays more expensive
To tie in with the cost of living, those opposed to the policy also point out that it may make holidays more expensive.
Cllr Nathan Hull, a Conservative who represents Washburn and Birstwith, criticised the idea that adding a levy onto holiday bills would help to promote tourism.
He said:
Quite frankly, I think it is a horrendous idea. If you want to encourage tourism, then making holidays more expensive is a pretty strange place to start as far as I'm concerned.
Meanwhile, Cllr John Mann, Reform UK councillor for Pannal and Oatlands, pointed out that the cost of the tax will likely be past on to tourist at a time when people are already struggling with the cost of living.
He said:
Surely with the tax burden in the UK and our region at a post-war high, aren’t people being taxed enough?
3. The tax will deter people from staying in North Yorkshire
A concern that has frequently been raised in opposition to the levy is that it will deter visitors to North Yorkshire — rather than help to grow the region’s visitor economy.
Cllr Hull raised the point at last week’s Skipton and Ripon area constituency committee, which was attended by Mayor Skaith.
He said:
Maybe people won’t want to come into the county because it is cheaper to go elsewhere.
However, Mr Skaith has denied that the tax will deter visitors.
A report into the levy by Policy Lab, which was set up last year by York and North Yorkshire Combined Authority, which Mr Skaith chairs, and York St John University, also found there was no strong evidence that a levy would significantly reduce overall visitor numbers, particularly in established destinations.
4. The levy is uncapped
Last month, the government announced that its preference for a tourist levy is that it would be based on a percentage charge.
Mayor Skaith, along with other Labour mayors, pledged to cap the new charge at 5%.
However, this has not allayed concerned from some of those opposed to the tax who point out that the government’s policy is that the tax is uncapped.
Cllr Simon Myers.
Some senior Conservative councillors in North Yorkshire also fear that the policy is another means of the government passing on the “financial burden” onto local government.
Cllr Simon Myers, executive member for culture and housing on North Yorkshire Council, told the Skipton and Ripon area committee that he was cynical about the levy.
He said:
Am I over cynical in saying that down the line, the Treasury will be saying to central government when you come to new funding rounds that they have the ability to raise more tax locally, so we can save the Treasury money not by dealing with the bloated civil service but by expecting local government to yet again bear the cost of propping up the vast expenditure by the civil service.
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