Growing potential for Cornwall to introduce a ‘tourism tax’

There has been discussion both in Parliament and Cornwall Council’s chamber this week about the potential for Cornwall to introduce a “tourism tax” – a levy paid by people holidaying in the Duchy.

Last year, communities secretary Steve Reed MP said mayor-led councils would be given the power to impose a charge on visitors staying overnight in hotels, bed and breakfasts, guest houses and holiday lets.

Some places have already introduced visitor levies – Manchester charges a £1 flat fee per room, per night, Liverpool charges a 1.6 per cent levy on the total accommodation cost, Bournemouth, Poole and Christchurch charge a £2 flat fee per room, per night, while local councils in Scotland have the power to implement levies.

However, Cornwall Council has made it clear it won’t entertain the idea of having a mayor and is instead seeking designation as a single foundation strategic authority (FSA). The Government has indicated it is “minded” to grant Cornwall this exceptional standalone status.

There is now pressure on the Government to allow the introduction of visitor levies as part of FSAs as well as mayor-led authorities, meaning Cornwall could tax tourists if so inclined.

Speaking in the House of Commons on Monday (June 15), Truro and Falmouth’s Labour MP Jayne Kirkham said: “The King’s Speech contains proposals for an overnight visitor levy. The decision on whether to introduce it is to be devolved to mayoral strategic authorities and, potentially, foundation strategic authorities.

“Most coastal and rural areas that struggle with the impact of tourism are not in mayoral areas, so can the Minister confirm that FSAs will also receive the power to use the levy, and will she and Treasury officials meet me to discuss this?”

Nesil Caliskan, parliamentary under-secretary for housing, communities and local government, responded: “The cheer across the House is a reminder for me of the importance of coastal communities. The Government is committed to mayoral strategic authorities having the fiscal tools to drive good growth in these areas. We have recently consulted on extending those power to FSAs and will publish a response shortly.”

The matter was also raised at a meeting of Cornwall Council’s sustainable growth scrutiny committee the following day (Tuesday, June 16).

The committee’s Conservative chairman, Cllr Connor Donnithorne, questioned Cllr Sarah Preece, Liberal Democrat cabinet member for tourism, on his understanding that Cornwall Council has applied to the Government for powers to levy a holiday tax.

“We are working very hard as I’m sure you’re aware to secure foundation strategic authority status,” said Cllr Preece. “We have a strong view that the authority should have the powers that would come with that – one of which would be to implement a tourism levy should it so desire and, of course, that would be an elected members’ decision.

“At this point there is no singular request for us to implement a tourism levy. It comes as part and parcel of the authority status, so to do a consultation on the levy would be premature.

“Our complete focus is to ensure we get that foundation strategic authority status. The process of consulting widely with stakeholders and the visitor economy sector itself will be really critical to how we finally come to the chamber to present a position [on a tourism levy].”

She added: “We have requested that we have the powers to enact a tourism levy should it be a decision that is taken.”