The Bed Tax (follow up)

In my last article I mentioned that after the meeting with Sir Michael Lyons I would report back on issues relating to the Bed Tax. I attended the meeting in Leeds on the 18 August this year and I was, it must be said, impressed with Sir Michael.  He has a very clear understanding of his role in examining Local Government finance and was willing to listen to the thoughts and considerations of the assortment of business owners who attended the meeting.

Specifically his role is to examine and report to Government on the financing of Local Government. He commenced his remit with the statement that he would 'rule nothing in or out of his inquiry' and this is where some of the more radical ideas for financing local authorities have sprung from. Whilst he did say that a Bed Tax would be intrusive and quirky I have to own up and say that he was at that time para-phrasing my comments to him made earlier in the meeting.

The Bed Tax received three of four paragraphs in Sir Michael's Interim Report where some reasons for considering this tourism tax were listed. I was of the opinion prior to the meeting with Sir Michael that the Bed Tax when examined in detail would not move up the ladder of importance for helping to finance local government. I am still of that opinion.

Now whether the Government acts on the report Sir Michael is currently holding his last round of consultation on is for Ministers to decide. There would have to be a strong arguments (financial) I believe in favour of the Bed Tax in Sir Michael's report for Minsters to consider its imposition. I do not believe the report will support the imposition of the tax. This is of course only my opinion but I do think that when looked at in detail there will be very little to commend it for consideration.

It will:
be economically very difficult/expensive to collect.
decrease our competitiveness in the world tourism market place.
unfairly target one specific industry.

Of course any Government could decide, in its wisdom, to overrule ANY sensible suggestion and impose the tax anyway but it would lose credibility after paying for a report and then not acting on its findings and some serious egg on face would not doubt ensue.

So where do things go from here? Well anybody has the opportunity to comment either on the Interim Report from Sir Michael or in general about Local Government financing until the end of August. Sir Michael will then concentrate on reviewing the comments and representations made to him and produce his final report.

It would, even allowing for my thoughts above, be stupid for the industry to stop canvassing for the ruling out of the Bed Tax, so whenever an opportunity exists to make an adverse comment on its imposition please do so. It always helps I think to suggest an alternative when criticising any measures such as this and one comment made at the meeting from one business owner still rings in my ear:

"What I would like" he said "is to pay my local tax and think of it as an investment not a cost"  Now that would be a step change in thinking, I wonder whether it is achievable?

Very finally whilst I do think a Bed Tax is not the way to go I do think that a general sales tax, even an increase in the VAT rates might become an option for serious consideration for increasing revenues to pay for Local Government. That would mean we were all involved for even it we didn't collect and return it Government we would all have to pay it!

Fingers crossed!!

Chris Parkin

More update as they happen on the blog page:
http://www.bandbowner.com/public/department47.cfm