Tax on tourism 'would ruin' the Westcountry economy
The Conservatives have criticised a Labour plan for a "tourist tax" that they claim would damage a key Westcountry industry.
But Labour accused the Tories of "scaremongering", arguing the idea floated by an Opposition frontbencher in Whitehall was to underline the potential for giving local areas more control over taxation.
The proposal, put forward by Ed Miliband's Shadow Cabinet ally Sadiq Khan and backed by some Labour councils, would potentially see a tax placed on all hotel, bed and breakfast and self-catering accommodation.
If Labour adopted a levy similar to the 10% rate added to the price of a room in the US it would mean £10 extra for the cost of a £100 hotel room.
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Sarah Newton, Conservative MP for Truro and Falmouth, and also deputy chairman of the party, said: "It is damaging to consider any more taxes on small businesses that will jeopardise jobs in tourism which makes such a vitally important contribution to the South West economy. It would also affect other growing and new industries where business people from around the world visit the South West, investing in new businesses from quality manufacturing to highly skilled engineering and creative industries."
A Labour source insisted the party was not formally backing a tourist tax and the Shadow Minister was highlighting the need for "London to have greater control of its finances". "A tourist contribution is not Labour Party policy," he said.
But Oliver Colvile, Conservative MP for Plymouth Sutton and Devonport, argued Labour MP Graham Allan, chairman of a cross-party select committee of MPs, and Labour councillors in Sheffield have also called for a "hotel tax".
He said: "There are calls within the Labour Party for this to happen. We need to kick up a fuss for Plymouth at this stage.
"It is an appalling idea and the Labour Party needs to come out publicly to distance themselves from it."
But Luke Pollard, Labour's parliamentary candidate in Plymouth Sutton and Devonport, who works in the tourism industry, said: "The Conservatives know that introducing a tourism tax is not Labour's policy.
"Their attack is simply a example of shameless scaremongering. Tory MPs should think twice before they play politics with such an important industry in the South West that so many local people rely on for their livelihoods."
The idea of a tourist tax was considered as part of the Lyons report into local government finance while Labour was in government, but the idea was dropped after criticism from the tourism industry.
But Mr Khan revived the idea in a newspaper article in the London Evening Standard. "We could tailor a tourism contribution that works for the tourism industry, doesn't penalise local people and has the sole purpose of improving and promoting the city," he said.