London latest to mull tourism tax to pay for public transport, amid Welsh Government consultation plans

London is the latest part of the UK to mull a tourism tax to pay for services such as public transport.

Tourists to London should face a new tourism levy to fund Transport for London, which is facing a funding crisis, the London Assembly heard yesterday.

The move comes as the Welsh Government has said it plans to consult on a tourism tax later this year, which if implemented could see councils have a say over how much they could charge visitors in their areas.

Last week then Welsh Secretary Simon Hart, speaking just a few hours before resigning in a bid to force out Boris Johnson as Prime Minister, called on First Minister Mark Drakeford to “drop his ridiculous plans for a tourism tax”.

But Professor Tony Travers of the London School of Economics told the London Assembly yesterday that a tourist tax would be worth “hundreds of millions of pounds” per year – and suggested it could be used to solve Transport for London’s funding crisis.

New York, Paris, Berlin, Rome and Amsterdam all already operate a similar tax.

Prof Travers told the London Assembly a new tourism levy of a few pounds per night for international visitors “would be on a list of potential ways of producing longer-term funding” for Transport for London.

‘No assurances’

Welsh Conservatives have previously called on the Welsh Government to abandon its “damaging proposals” for a tourism tax.

In April they put forward a proposal calling on the Welsh Government to ditch the plans which are part of their cooperation agreement with Plaid Cymru.

“So, they say that the introduction of a tourism tax would have no impact at all on visitor numbers to some of our key tourism locations in Wales,” Senedd Member Tom Giffard said.

“But I thought Ministers might be keen to hear the latest from Venice, one of the world’s leading tourism destinations, that has now said it’s introducing a tourism tax to dissuade further visitors from attending.

“Yes, you heard that right; it turns out that extra taxes for visitors mean fewer people want to visit.

“We also know that, from my questioning of both the First Minister and the finance Minister, that there is no assurance at all that such a tax will lead to any additional money being spent on improving tourism offers in these areas.

“The Government either cannot or will not be able to prevent councils from deleting existing tourism budgets and replacing them with this tax instead.”

‘Empowering’

The Welsh Government responded that tourism levies were commonplace across the world, with revenues used to the benefit of local communities, tourists and businesses, which in turn help make tourism sustainable and successful.

“Tourism levies, of course, as we’ve heard, are very commonplace across the world, with most countries in Europe applying them,” Minister for Finance and Local Government, Rebecca Evans, said.

“They’re proportionate by design and they represent a small percentage of the overall bill for consumers. There’s little evidence that tourism levies have a negative economic impact. They’re used to benefit those local areas and communities that choose to use them.

“The powers will be discretionary, empowering local authorities to make their own judgments and decide what’s best for their communities.

“Of course, I welcome all views and evidence as we continue to work collaboratively with our partners to help shape these proposals. A major consultation will take place later this year, and that will be an opportunity for all views to be heard and considered.

“Through this process, we’ll design a tax that’s aligned to our core tax principles, and one that works for communities in Wales.”