Westminster City Council leader Paul Swaddle has launched a petition demanding that London boroughs receive at least 50 per cent of any revenue raised by Mayor Sadiq Khan's proposed tourism tax. The move follows the Mayor's announcement of plans to introduce an overnight levy in the capital, capped at 5 per cent of accommodation costs, with the exact rate yet to be determined.
Petition calls for fair share of tourism levy
Cllr Swaddle, who leads the Central London borough, is calling on the Mayor to commit to passing on at least half of any revenue raised by the levy to boroughs that deliver services for tourists. The campaign comes as Westminster faces a 50 per cent cut in Government funding over the next four years, amounting to £100 million less from the national Government as part of the Fairer Funding Review.
The Mayor has been a long-time supporter of introducing a tourist levy to support London's economy. His decision to push forward with plans follows the Government handing greater powers to Mayors and local leaders, including the ability to introduce overnight levies.
Concerns over hospitality sector and local services
Cllr Swaddle has previously stated that an overnight levy could increase the burden on London's already struggling hospitality sector. He warned that there would be "precisely zero benefit to Westminster residents and businesses" if the Mayor does not share revenue raised with councils.
"The reality about an overnight visitor levy is that in Europe, VAT is significantly lower and the total tax burden is lower. Our hotels across the West End and elsewhere in Westminster need to be competitive to keep us a global visitor attraction," Cllr Swaddle said. "However if the levy is to be raised, local authorities need to keep at least half to be spent locally for services that benefit visitors, such as keeping the streets clean and safe. The Mayor of London has no intention of sharing any overnight levy income with councils so there will be precisely zero benefit to Westminster residents and businesses."
The cost of supporting the visitor and commuter economy in Westminster is estimated at £115 million a year, according to Cllr Swaddle. "It's important we now see the fine print of what is being proposed," he added.
How overnight levies work across Europe
An overnight levy is a tax that accommodation providers pay to the local authority, normally based on a percentage of the price of a room or a flat night rate. The cost is almost always passed on to guests by hotels, who pay a small amount extra to stay overnight.
Such levies are already in place in many major cities in Germany, the United States, Italy and the Netherlands. Some of these levies have caps on the number of nights they can be applied for. For example, in Wales the levy is applied only to the first 31 nights of a tourist's stay.
Research suggests that a £1 a night levy in London could raise up to £91 million a year for the capital, according to the BBC.
Government response and next steps
A spokesperson for the UK Government said: "Mayors will be empowered to deliver more long-term, locally led investment in transport, regeneration and cultural assets that can unlock growth and make places more attractive for residents, businesses and visitors. The Government will not compel any Mayor to introduce this levy, nor will Central Government reduce funding for Mayors if they decide to do so."
The petition by Cllr Swaddle now seeks to pressure the Mayor to commit to sharing revenue with boroughs, as the fine print of the proposed levy is awaited.
