Saturday, 13 January 2018

A £1 tourist tax could help mitigate the cuts

First published in the Morning Star 9/1/18. Despite all the campaigning, it can still be hard to convince people of just how savage local government cuts have been in Scotland.

You can try giving them the figures. Nine out of ten austerity job losses have been in councils. Despite Holyrood getting a £180 million budget increase from Westminster, councils in Scotland will get nothing this year.

Even a 3% increase in the council tax is a £135 million real terms cut even with the lowest inflation projection. Councils estimate they need an extra £545 million to stand still without even starting to repair the damage done by the years of silent slaughter of local services.

Yet many people remain unconvinced. That is, unless they have had a personal experience of the cuts.


For example, if they can't get the home care service they need because the resources aren't there. A situation made worse when providers can't retain staff on the wages they pay.

Or if they work in that service. A Unison survey of Edinburgh's health and social care workers in December concluded that they feel “overworked, over-pressured, unsupported and disbelieved.”

The report said: “Many members stated they take on more work than they can safely manage because of their sense of obligation to the service users and to their colleagues.”

And among the heartfelt quotes from staff was: “This has caused me anxiety at work which is affecting my home life. I am constantly concerned that I am going to miss something important which results in serious harm/death to a client.”

Or if they face increased charges for local services or new charges for what used to be free. There is nothing progressive in limiting universal tax increases and transferring the burden through charges which disproportionately affect the poorest.

But even then, in Edinburgh at least, it tends to be the trams that get the blame rather than the government.

The festivals and the New Year events also come up as people ask what the council does with all the money it gets from them. The fact is, far from profiting, the council subsidises these events to bring money into the city to benefit local and national businesses and create jobs.

Which brings me to a couple of issues being hotly debated in the capital over the festive season. A so-called tourist tax and hotel price hikes.

The local media has been belatedly shocked by the fact that a hotel was charging £400 for a room on Hogmanay when it is usually about £90. They should have looked around on the night of the independence referendum when a £70 room was going for £600.

This shouldn't come as a surprise to people who know how the market works. It isn't there for competition, it's there to fleece you when it holds all the cards and you are most in need.

So, with figures like this flying about, why should there be controversy about a modest £1 per night tourist tax that could bring in £15 million to offset a fair bit of the £21 million cuts the city faces this year?

Well, apparently there is. The Scottish government so far refuses to devolve the powers to allow councils do it. This is ironic from a government that tells us they can't do progressive things because Westminster won't devolve the powers.

Government blocking of the tax has been hailed as a 'victory' by the British Hospitality Association (BHA). Their website says the tax “would have resulted in an unfair charge levied indiscriminately on all consumers simply wanting to enjoy an overnight stay in Edinburgh.”

Dare I suggest that consumers might think £300 to £500 price hikes are a tad more unfair than a humble £1 tax? Personally, I would go for a punitive windfall tax on the profiteering.

The BHA boasts of having campaigned against the tax for the last six years which is exactly the same time that Edinburgh council's trade unions have been campaigning for it.

The unions argued in 2011 that this was not a panacea but it might mitigate some of the damage. They argued that such is the scale of cuts that they are destroying the very fabric of services, not just for the next few years but forever.

They recognised that the people who caused the problem are reaping billions while the political choice of austerity means the workers they fleeced are losing their jobs. It's not fair but it is real. And it won't change until there is fundamental political change at Holyrood and Westminster.

So what do we do in the meantime? Do we just let services that care for the vulnerable, keep our communities safe, protect our health, educate our children and maintain our roads wither on the vine possibly never to return?

Or do we try to do something to keep the basics there? One way is to stop throwing good money after bad on privatisation and the unions have had some success in winning that argument. Another is a tourist tax.

It won't save all services and jobs. But by mitigating cuts it would help to hold together a framework for the future. Add to that things like restructuring and buying out expensive PPP/PFI contracts, use of council bonds, or savings from refinancing, and breathing space could be bought.

It won't solve the problem. But it may keep the wolf from the door and allow us to build services to be proud of again in the future.

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