Something novel happened yesterday with the Corporate Scrutiny Committee inviting the CEO, Kevin Lavery and Alec Robertson, Leader of Cornwall Council facing questions from members of this committee. Those wishing it would be as exciting at the Leveson Inquiry, or the Culture and Media Select Committee grilling of the Murdock family would be disappointed as it was rather a tame event.
Even though it had no earth shattering news, many of the questions asked by members of this committee were very good. One of these was on Newquay Airport and the £5 airport development fee. I have always thought this
fee tax was one step down from Dick Turpin asking for your valuables as you go about your business.
Anyway, the question was asked could this tax be stopped? The simple answer from the CEO was yes it could. One of the reasons why it could be stopped is because of the huge drop in passenger numbers over the last few years has made the airport less reliant on this money. The CEO said this could be looked into. I would welcome this as many feel this fee is wrong. Then again, looking into it does not mean it will stop.
The Local Government Secretary, Eric Pickles announced yesterday that local authorities will soon be able to keep (there is a catch) Non-Domestic Rates (NDR), otherwise known as business rates. Currently, local councils receive their funding from three main sources: grants from central government; council tax; and other locally generated income (such as fees and charges for services).
The catch is the government is not going to allow the local authority to keep all of the NDR. The government wants to make sure there is a fair starting position by taking business rates away from those with too large an amount in comparison to their current spending, and then top up those authorities with too little, again in comparison to their current spending.
Yes, on one hand it looks like the government will give greater flexibility to local authorities on keeping and spending NDR, but it won’t let local authorities set NDR, as this power will remain with the government (at the moment).
To be honest, I doubt it will mean extra money, as if you gain from the NDR, you will have a reduced amount in the formula grants handed out by the government. Still, I do believe this could work positively for Cornwall, but we won’t know for sure until the number crunchers get out their calculators to make sure.
The Communities and Local Government Department has released a ‘Plain English Guide’ to the proposals. They explain without government speak the proposals.
A few days ago I blogged about the latest ‘idea’
from certain quarters of Cornwall Council about a Tourist Tax, or Bed Tax. I said this was nothing more that a tourist poll tax and would be hard to administer, and more than likely cost a small fortune to run.
Figures of £25 million in additional revenue have been quoted from within the Council. It does seem a lot of this money could be used for the benefit of the whole of Cornwall. So I decided to do more research on this to see if the numbers stacked up.
Using the latest data base there are currently 225,692 beds in Cornwall and they are split into the following categories and bed numbers.
- Agency – 3984
- Bed & Breakfast – 4448
- Campus – 839
- Farmhouse -590
- Guest House – 5062
- Holiday Park – 53766
- Hostel – 1185
- Hotel -17239
- Inn -1422
- Self Catering – 81535
- Camping and Caravanning – 55622
We all know that the occupancy of beds is not year round, and some categories will do better at certain times of the year. I have worked out that the £25 million will come from an average occupancy of 110 days or 30% though-out the year.
The trouble with the whole concept of a tourism tax is how you administer and collect the money. Will the owners of the establishments have to keep a record of each night someone stays in a separate ledger and if requested have to submit these documents to Cornwall Council to be checked? What happens if you don’t pay? What mechanism would be in place to collect the outstanding amount? It will be bad enough trying to collect it, let alone chase up non-payers.
I have said before about the message this sends out to tourists. It is a very bad image for Cornwall if the tax will be seen as another way of fleecing visitors. It is not the right message to send out because holidaying in the UK is not always the cheapest compared with a lot of other European destinations.
Whilst it may be seen as a way to improve the infrastructure of Cornwall without loading it onto the Cornish tax payers but, I truly believe this whole concept is fraught with a lot of problems and issues. Instead of hearing about how much money could be raised, it would have been far better to be told the details and how it would be administered before it all went public.
The latest announcement from Cornwall Council is to look in the possibility of a Tourist Tax. It is claimed that no final decision has been made, but from my experience you are hardly going to go public about it, unless it’s been pretty well discussed and decided this is the way forward.
My understanding is this Tax could be raised by means of a premium added to the accommodation costs that the tourist pays. Its been said this could be £1 per bed per night. This on face value might not seem a huge price to pay, but if you take for example a family of 4 will generally require 3 beds and they are staying for a week. It does not take much of a maths boffin to workout this is an additional £21 a family has to find for their stay.
This process of taxing a bed may work for Guest Houses, Hotels and Bed and Breakfast establishments, but what about the Holiday Lets? A Holiday Let House may have six bedrooms, but only four people stay. Are you going to charge per house, or the number of beds in use? The other problem is not all Holidays Lets are marked down as businesses. Many are used by the owners, but supplement their incomes by renting it out for a month or two.
The administration of this whole process would be complex and labour intensive. I believe a lot of the money collected would be spent on running the system, and so most of the money would be gone before it could be spent on the infrastructure.
Tourism is a very competitive market locally, nationally and internationally all fighting for the little money that is around. The message this sends out to tourist could have a negative impact; because other areas like Devon would surely make the claim that don’t go to Cornwall because they tax you to visit, but we in Devon don’t. The tourism industry struggles at the best of times, adding this tax could really do a lot of damage.
It would be far simpler if the Government allowed Cornwall Council to keep all the Business Rates it collects for them. That way, the money collected from these rates could be used for infrastructure and improvement.
My opinion is this idea of a Tourist Tax is nothing more than a Poll Tax on tourist. If introduced would be very damaging to the reputation of Cornwall’s tourism industry.
Yet again there has been no backbench involvement on this issue. My real fear is that we won’t get any involvement either. The Cabinet and the Directors can sit on the 4th floor and think up these ideas, but please before you go live on radio and talk about them, include the backbenchers in the discussion first.