Fear of added costs
Businesses call for halt to city tourism tax plan
Tourists may have to pay a levy to visit Edinburgh (photo by Terry Murden)
A plan for a tourism tax in Edinburgh has been branded potentially damaging to small businesses.
In a Federation of Small Businesses (FSB) survey of 124 firms in the city, 76% said they were against a levy on tourism and 73% said it would have a negative impact on the local economy.
The city council is drawing up a business case for the tax with the aim of persuading the Scottish government to hand over the power to introduce it.
The draft proposals are due to be revealed followed by a consultation with local businesses. It is estimated that visitors spend £1.46 billion each year in Edinburgh, supporting around 34,800 jobs.A levy of between £1 and £4 on top of a hotel bill is believed to be the sum under consideration.
Garry Clark of the FSB said businesses were already facing a series of tax and business rates hikes. “What we don’t want is yet another tax.”
He said the Scottish government had repeatedly ruled out a tourism tax and said the tourism industry itself opposed the idea.
Adam McVey, leader of Edinburgh City Council, argued that the residents supported the proposal. He said: “It would be a small levy similar to the price of a cup of coffee.
“It is important to get a levy, the right levy, to support the things that bring visitors here.”
He said more tourists sere coming to the city, which was a good thing, but said it created challenges in managing the infrastructure.
Janet Torley, FSB area leader for the east of Scotland said tourists must be valued and not “priced out” of the city. She said: “This is a wake-up call for the City of Edinburgh Council, signalling that its plans to introduce a tourism tax in the city are unwanted and potentially damaging.
“Despite the caution which the Scottish Government has urged over this tax, the city council has pressed ahead with the development of a ‘business case’ for its introduction. Now it is clear that the overwhelming opinion of local businesses is ‘no’.
“Edinburgh is at the very heart of Scotland’s tourist industry – it is our most visited city, it has our busiest airport, and it is home to some of our most iconic landmarks. Edinburgh’s success as a magnet for international tourists is vital to the economic health of visitor economies right across the country.
“If we tax tourists out of Edinburgh, then we risk taxing them out of Scotland, damaging the prospects of small local businesses throughout Scotland and threatening jobs.”
The plans have drawn criticism from other industry bodies, including the Scottish Tourism Alliance and the Association of Scotland’s Self-Caterers.
Coun McVey, said: “I understand that there are those who remain to be convinced that this would be a positive move and of benefit to us all. I can assure them this is only the beginning of a considered, thoughtful and balanced debate with industry leaders, the people of Edinburgh and those who visit us.”
Support for the levy cam from John Donnelly, chief executive of Marketing Edinburgh, who said: “Finding a sustainable way to invest in the city whilst balancing the needs of our residents, our tourism industry and the wider business community is crucial to our future.
“We must protect Edinburgh’s position as one of the most desirable destinations in the world – and the more we invest, the more we grow, to the benefit of all.
“If we are to identify the right solution, it is important to keep an open mind. We need a clear, balanced and thoughtful debate, considering the merits and disadvantages of every option.
“That means nothing should be off-the-table at this stage – we must seriously contemplate a levy as a potential solution and explore the positive impact its introduction could have.”