TAITMAIL Steve Reed’s culture tax
So here it is, sneaking in round the back of the Budget ushered in not by Rachel Reeves but by Steve Reed, the local government secretary: a tourism tax for England.
The idea has been around for years and 40 countries already have one to supplement the cost of their cultural infrastructure, but in the UK we have always baulked at it as, ostensibly, unfairly targeting hard working families’ city breaks, but more honestly because it would be a new strand of income central government would have no control over. As it is, the DCMS-parented Arts Council England gives out 670m a year nationally, including lottery money.
Image shows Manchester city centre
England gets 130m visitors a year overwhelmingly for our culture, and its elected mayors – just six of them in Liverpool, Manchester, London, the North East, the West Midlands and North Yorkshire - are being given the power to step in line with the likes of Milan and New York by adding a small percentage to hotel bills (including b&bs, guest houses etc) to “put more money into local priorities, so they can keep driving growth and investing in these communities for years to come” Reed says.
There’s no mention of how much this new tax would be but realistically it’s going to be 3-5% on hotel bills, and it could raise maybe £1.2bn a year, half what local councils spend on culture. A consultation process was launched this week which ends on February 18, and this will be crucial.
It’s happened remarkably quickly, suggesting the new tax’s proponents might have been pushing on an open door, because it was only in March that the think tank The Cultural Policy Unit (CPU) published A City Tourism Charge: The Case for a Progressive Levy on Overnight Visitor Accommodation, which the likes of Andy Burnham, Tracy Brabin, Sadiq Khan and Steve Rotheram tucked under their arms when they went into argue their case with the government. “Cities like Barcelona and Paris raise tens of millions each year through similar schemes – money that goes straight back into improving the visitor experience and supporting the local people who keep those destinations thriving” says Rotheram. “I’m pleased that the government has listened and acted.”
In fact, some mayors have pre-empted the legislation with Manchester introducing a “city visitor charge” by creating “business improvement districts” and other cities across the UK have followed suit, including Liverpool. This new law will slot in nicely.
Is it going far enough? For a start, giving the power to just these six mayors means a bit less than two-thirds of the green and pleasant land foreigners are flocking to won’t be able to levy the tourist tax because those areas are not covered by an elected mayor.
And there seems to be an assumption that the resultant bonanza will chiefly benefit our “systematically under-invested … rich cultural assets”, as the former Bank of England economist Andy Haldane describes it.
Not necessarily. In Reed’s announcement there’s no mention of culture and it says the mayors “will be able to invest in transport, infrastructure, and the visitor economy”, which can mean almost anything. Rotheram in Liverpool wants it to shore up “iconic” events such as the Euro 28 football tournament; Burnham sees it enhancing his public transport revolution in Manchester; the North East’s Kim McGuinness foresees “a new era of events and festivals”. So the bones of this culture tax are being picked over before it's even born.
And the CPU report wanted a proviso that the income from the hotel tax should not be a substitute for existing local arts funding, but since cultural support is not mandatory for local authorities that will have to depend on the mayors' good will. It wanted the levy ring-fenced for cultural infrastructure and placemaking, including “major cultural attractions, museums and libraries, creative districts in cities and towns, grassroots venues and the local tourism services and facilities that underpin them” but any such definition is going to have to be written in during the consultation.
Local councils are still the largest subsidisers of culture, spending £2.4bn a year on libraries, museums, heritage sites, concert venues and theatres. But since 2010 that funding has been under severe strain from local authority funding cuts and almost exactly the same amount, £2.324bn to be precise, has been pared away from local budgets because of the rising costs of, for instance, social care. Cultural budgets are an easy pocket to pick. “We have to make sure culture infrastructure is a substantial recipient (London and Liverpool seem up for that) and we suggested some goes to local authorities too” says Alison Cole, director of the CPU and co-author of its report. “It’s now all in the design and responses to the consultation, so we need to rally the troops.”
What the tourism tax will do, however, is refocus arts funding from the generalised national purview with its endless form-filling, reporting back and justification to the particular local needs, enabling proper long-term transparent tailored strategic planning.
It will swivel cultural support away from Westminster and should be the biggest change in cultural planning and funding since the Arts Council arrived 80 years ago.