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Kemptown MP calls for debate on Labour’s tourism tax

Besi Besemar September 5, 2013

Simon Kirby MP
Simon Kirby MP

Simon Kirby MP for Kemptown & Peacehaven this morning called in the House of Commons for a debate of the Labour Party’s proposed tourism tax and its potential impact to Brighton & Hove.

Speaking during Business Questions, the Kemptown MP expressed his concerns over such a tax and called on Labour to abandon the policy.

Mr Kirby has also sent a postcard to every member of the Shadow Cabinet ahead of the Labour Party conference in Brighton later this month. The postcard, which depict the Palace Pier, calls on Ed Miliband MP and Ed Balls MP to rule out a tourism tax in Brighton and Hove.

Last month Labour’s Shadow Justice Secretary Sadiq Khan MP proposed a levy on overnight accommodation, designed to raid the pockets of tourists staying in hotels. Since the idea of a tourism tax was proposed there has been great concern over its implications for places like Brighton, where tourism makes such a vital contribution to the local economy.

Simon said:

“There is understandable concern over Labour’s latest tax in tourist destinations across the UK, and in addition to my call for a debate the issue was raised twice in this morning’s session of Culture, Media and Sport questions. Still we have heard nothing from the Shadow Cabinet, and Ed Miliband has yet to respond to my letter seeking his thoughts on the proposal.

“I would welcome a debate in Parliament on the merits of a levy on overnight accommodation, as I believe it would allow an opportunity to highlight the disastrous impact it would have on the local economy in places like Brighton and Hove. Tourism generates £1billion in the city and supports tens of thousands of jobs. We need to do everything we can to encourage visitors, not put them off with more taxes at a time when money is already tight for many families.

“I have sent Brighton postcards to every member of the Shadow Cabinet ahead of their visit to our fantastic city later this month, asking them to rule out a tourism tax in Brighton and Hove. I hope that at least one of them can respond and confirm that the Labour Party will abandon this disastrous policy.”

Local hotelier and former chair of Tourism South East, Nick Head, said:

“In the UK VAT is charged at 20% on B&B, attractions entrance fees and restaurant meals. In the rest of Europe the VAT rate is 3 to 6%. To holiday in UK it is already 14% more expensive than a comparable European holiday due to VAT alone. 

“To add a bedroom tax on top of a 14% higher rate of VAT tax than the rest of Europe will simply drive business elsewhere. 

“In 2002 at a UK Incoming Tourism Business Event at the House of Commons I discussed the loss of business from London to Paris because of the then 11.5% higher rate of VAT with a Labour treasury minister who told me in UK “it will never happen”. Despite the proven case that within a year of France reducing VAT on hotel accommodation and attractions entrance fees the total take by the French Treasury from all taxes paid by the hotel and attractions industries significantly increased. More jobs, more business, more VAT, PAYE and Corporation Tax collected.

“When will Labour “take tourism seriously”? Or is Labour only interested in big industry jobs? 

“I applaud Simon our Conservative MP for his stance against a Labour proposed hotel bed tax and standing up for his electorate. However Simon’s party is in government and could take action by reducing VAT on B&B, attractions and restaurant meals to the same rate as the rest of Europe. And give the UK tourism industry a level playing field to compete on merit to win back some Brits who go abroad who in the process add to the balance of payments deficit by some £40 Billion a year (the difference between what incoming visitors spend in the UK and Brits spend abroad); as well as provide an incentive to overseas visitors to choose the UK to holiday in. We have a 2nd to none rich culture of every kind, natural environment and heritage offering in Britain but for many weighing up the cost against other destinations in Europe +14% is often too expensive! 

“In September 2009 the Conservative Party called a national conference for the Tourism Industry which was held in Brighton. As part of The Conservative pitch to win the support of the Tourism Industry one of the proposals presented and discussed at length was the possibility of reducing VAT on tourism to the European rate of circa 6% because tourism is one of the most labour intensive of all industries and with retail the quickest to set on new jobs when demand picks up even a little. The proposals were made by a think tank set up by The Conservative Party and led by the finance director of Blackpool Leisure Beach (the biggest tourist attraction in the UK) and a professor in tourism from the LSE. The bottom line was more jobs, more money spent and more tax overall collected. This was a serious presentation made using real outcomes elsewhere. Nothing has changed about the validity of the sensible financial argument made by The Conservative Party. As with Labour – when will the Conservatives start taking tourism seriously? 

“Well done Simon Kirby. Not well done Government Ministers and Labour Front Bench. Just because much of the UK tourism industry (nearly 70%) is owned by family and private SME’s and not by global businesses like many of our failed banks with access to ministers 24/24 is no reason to ignore the contribution we could make to the national economy and balance of payments by being listed too and given an even playing field to win business on merit in Europe.”

Tourism is worth over a billion pounds a year to Brighton & Hove and supports many thousands of local jobs (over 13,000 full time equivalent jobs in the sector in the City).

According to labour market statistics there are 137,000 jobs in Brighton & Hove. Based on a recent Brighton and Hove City Council report, around 14% of these jobs are supported by tourism generated turnover.

Warren Morgan, leader of Labour and Cooperative on Brighton & Hove Council was asked earlier this month for a comment.

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Cllr Warren Morgan

He said:

“This is utter nonsense from Simon Kirby; there are no proposals for a tourist tax for Brighton and Hove from Labour, and indeed we’d oppose any such move by the Greens or Tories. 

“It is just an attempt by him to distract attention from the half a million people now reliant on foodbanks, the million workers now on “zero hour” contracts, and the fact that over the life of this Tory government people will be £6,600 worse off.”

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