The idea of a tourism tax is a key component of fiscal devolution and a practical proposition gaining currency around the world. Rome does it. Edinburgh wants to do it. And in Westminster, we are increasingly convinced this is an idea that local authorities should be given the freedom to implement.
It is not just about hotels; the short-term let market, driven by giants such as Airbnb, has changed the game worldwide.
In Westminster, on any night, we estimate there are more than 8,000 properties rented out online. There is a major transient demographic who use our services but do not contribute to them.
The city council commissioned an independent consultancy to look at options for fiscal devolution. Bearing in mind the relatively high business rates of London’s West End, they suggest a modest overnight levy of between £1 to £2 per head.
In Westminster, we have Parliament, palaces, famous galleries and shopping streets. We are home to more than 30 theatres, 30 museums and 3,500 pubs and bars – all major draws for visitors. Combined with the working population, that is a lot of people to look after.
We have a daytime population of one million people and the authority spends £10.6m a year cleaning the West End alone.
Our conviction is that a modest levy will help with this and not hit the tourism trade. The money raised would go straight into those services which make the city look attractive and therefore help to boost tourism.
Airbnb and similar companies need to be part of this solution. They profit from our attractions and we think they should help us curate them.
Edinburgh City Council’s Transient Visitor Levy needs to secure legislation from the Scottish Parliament and a Westminster overnight levy would similarly need primary legislation.
This is not a done deal. We need to build both business and public consent that this could be a fair and reasonable thing to do.
Westminster wants to start a conversation with the sector to understand better how they would want to see any additional funding spent.
We have a vested interest in the success of our hotels, particularly as we head into the opaque world of Brexit. Any money raised from this kind of overnight levy would need to remain local and should be earmarked for the public realm. Our businesses would rightfully need to see a return on it.
The support from organisations like the Local Government Association (LGA) is there.
The precedent exists in other capital cities and the business case is clear. The visitor contributes, the council redistributes.
Cllr Nickie Aiken is leader of Westminster City Council
