Birmingham Commonwealth Games Bill [HL]

Debate between Baroness McIntosh of Pickering and Lord Snape

Wednesday 24th July 2019 Lords Chamber

[Lord Snape]

I think that I can handle most things that the noble Baroness throws at me in this place. Of course, it is not the first time that the noble Lord has defended the Government; indeed, the Liberal Democrats spent some years in alliance with them from 2010—and much good it did them, I might add on the subject of elections. Neither the noble Lord nor the noble Baroness mentioned the fact—I hope that the Minister will—that there is, it is said, a £40 million gap, which must be closed before the Commonwealth Games go ahead. If the gap cannot be closed in this way, how will it be closed?

Perhaps the noble Lord who speaks on behalf of the Liberal party should not knock an idea that seems enormously attractive to me. I fought three elections as a local councillor, only one of which was successful. If I were still a member of my local authority—that would be difficult because it was abolished some years ago—the thought of a tax that did not penalise my voters would be enormously appealing. That is the sort of self-interest that one normally hears from Liberal councillors—although it normally depends, of course, on which end of the village they are and the group of people that they are addressing at the time.

I go back to the question of yield management, as I think it is called—as a former Business Minister, the noble Baroness, Lady Neville-Rolfe, will know that. If it is good enough for hotel chains to vary the prices of their rooms on a nightly basis, surely it is permissible to look at the possibility—no more, no less—of a tax with which, I repeat, we are familiar with across the world and which, to give the city credit, Edinburgh hopes to introduce in the near future.

I will repeat one more phrase from my speech in Committee: we all know that the objections are based on the Treasury, because it hates the word “hypothecation” and hates the idea of anybody else applying taxes because that takes away some of its power. Again, I remind the Minister that the Conservative Mayor of the West Midlands—I did not vote for him; I accept that he won against the odds and will have to fight for re-election in 2020—has publicly announced his support for the scheme. Looking at his former partners on the Liberal Benches, it comes to something when a Conservative mayor is more radical in his views on taxation than his former colleagues in the Liberal Democrat party.

So I hope to get a more sympathetic hearing from the Minister on this occasion. Surely we could look at something like this; it is not revolutionary or Marxist or anything like that. Surely it would benefit the city, the region and, most importantly, the funding of the Commonwealth Games.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to have an opportunity to follow the noble Lord, Lord Snape, who made an interesting contribution. This is my first opportunity to contribute to the Bill. I ought to declare my interests at the outset: I chair the board of PASSCo, the proof of age scheme.

I echo the comments of my noble friend Lady Neville-Rolfe and the noble Lord, Lord Addington. I wonder whether the noble Lord, Lord Snape, has read closely the terms of Amendment 2, moved by his noble friend, the noble Lord, Lord Hunt. It puts enormous obligations on local authorities to raise this levy and,

“provide financial assistance equivalent to the proceeds of the levy, after costs of administration, to the Organising Committee for the purpose of delivering the Games”.

The real reason I counsel my noble friend the Minister against accepting this first-ever imposition of a hotel tax in England is that it would be the thin of the wedge. It would put down a marker for others, as we have seen in Edinburgh, who may wish to go down the same path.

At Question Time, the Liberal Democrat Benches in particular—I think it is the noble Lord, Lord Lee—often raise the spectre of the concerns that the tourism sector currently faces. One of these—I imagine that both hotel rooms and dinner tables face it; this has been one of the tourism sector’s persistent, as-yet-unsuccessful campaigns—is that we impose a 20% VAT rate, which already makes us uncompetitive in the face of our nearest competitors in the European Union and beyond. The States would not dream of putting such a high tax on their own business, particularly as they want to put America first, as we keep hearing.

We know that hotels and restaurants will face particular challenges as we leave the European Union at the end of October, in the sense that these businesses and the tourism sector generally—are heavily dependent on non-British EU citizens. We do not yet know what the supply of labour from EU countries will be, as we do not know whether there will be a transition phase or whether there will be the complete frictionless trade and free movement that we currently enjoy.

I do not wish to rehearse all the arguments that others have made, other than to say that I am convinced that a tourism tax—even on the level of a pilot scheme, as proposed here—could have a huge negative impact on businesses that rely on the tourism economy by potentially reducing visitor spending right across the industry. We are talking about hotel rooms today, but it could be restaurants and other businesses tomorrow. I urge my noble friend to look carefully at Amendment 2 and Amendment 7, particularly subsection (2), and advise him against accepting these measures.