Government stance forces city to ditch bed tax scheme

LONG-running plans to introduce a “bed tax” on hotel guests in Edinburgh have been dropped, it emerged today.

The city council had proposed the charge as a way of raising money for promotion of the Capital. But the proposal received a cool response from the Scottish Government and leaders of the Lib Dem/SNP council administration today confirmed they have ditched the plan.

City chiefs will now focus on alternative means of raising money, including a “business improvement district” (BID) for the hospitality industry, where businesses would pay a “levy” towards the fund to promote the city.

Councillor Tom Buchanan, the city’s economic development leader, said: “We need to bring back a report to policy and strategy pointing out that we required legislation from the Scottish Parliament or Westminster Parliament to enable a tax to be charged. However, the government did give a commitment in saying that a sectoral BID across the hospitality industry could work and we are prepared to put resource into that. It will involve looking at an airport contribution, hotels contribution, universities – a range of organisations.”

When asked if he was disappointed to have to rule out a scheme that he supported, Cllr Buchanan said: “I am pleased that the government is allowing us to look at alternatives and it is better to look at alternatives that do not require additional legislation because that adds time to how long it takes to introduce something.

“There are hoops to go through [for a BID] but we need to put money into Marketing Edinburgh or we will fall behind other cities. The local authority will not have the budget to do that and we need to align what we do with investment from the private sector.”

News of the bed tax plan being dropped has been backed by representatives of the hotel industry.

Colin Paton, chairman of the Edinburgh Hotels Association, said: “It is good news that the inequitable steal from the hotel industry will not be happening.

“Regarding a tourism BID, I would be interested in seeing how that would work. The hotel industry would expect to be part of a tourism BID but we await to see who else is part of it. If it was equitable it would need to include restaurants, the airport and taxi drivers.

“We would also need to know what Marketing Edinburgh propose that the money is spent on because it is an investment.”

However, Councillor Andrew Burns, leader of the Labour group on the council, said: “A bed tax has the backing of Labour, the Lib Dems, the Greens and the SNP – over 75 per cent of the council – and could really assist in sustaining our festivals and events.

“It is therefore extremely unfortunate that Fergus Ewing has refused to engage with the council on this matter, and he has quite clearly overruled his SNP council colleagues without any real discussion or debate.

“The Scottish Government should be working with local government. Instead they’ve sided with the hotel lobby, chosen big business over local democracy.”