BED TAX

That this House notes that Sir Michael Lyons, in his interim report on local government finance, stated that he was interested in introducing a new hotel tax; further notes that this tax would be on top of existing business rates and on top of VAT on hotel bills; further notes that this could potentially add £100 a week to the cost of a family holiday or visit; further notes that the hospitality industry, including the British Hospitality Association, the Tourism Alliance, Caterer and Hotelkeeper, Travelodge and local operators, are running a campaign against the new tax; further notes that a recent study on tourism taxes across the world by the World Tourism Organisation noted that `whilst it is arguable that demand from business travellers is relatively price inelastic, holiday demand is exceptionally price elastic...If a hotel increases its prices, tourists will simply move to another hotel or if a holiday destination increases its package holiday prices, customers will simply switch to a similar destination elsewhere'; further notes that tourism supports 11,000 jobs a year in the East Riding of Yorkshire and is worth £360 million to the region's economy; further notes that the new tax could affect more than 200 businesses across the region; further notes that the proliferation of cheap flights to Europe makes small hotels and bed and breakfasts particularly vulnerable to any increase in taxation; and therefore calls on the Government to reject any proposals for a bed tax.