Why I Voted Against Labour’s Proposals for a New ‘Hotel Tax’

In tonight’s full council meeting I have spoken out against a Labour motion which requested the Chief Executive of Rochdale Council to write to the Government, asking them to give the Mayor of Greater Manchester, Andy Burnham, new tax-raising powers.

The motion put forward by Cabinet Member for Business, Liam O’Rourke, suggested that a new ‘Hotel Tax’ be levied against all hotels in Greater Manchester, which would, of course, include all those in our borough.  Under the proposals, a charge of £1 per room, per night, per star would be added to every room sold across the city.  All the additional taxation would go directly to the Mayor under the vague remit of fixing the cities homelessness problem.

Why hotels?  What about the companies who sell cheap booze or gambling, that directly impact on the homelessness issue?  The horrified reply from the Labour benches: “What? More tax on beer!!”

Whilst I support many initiatives that help people who find themselves homeless in our area, this was, unfortunately, nothing more than a poorly disguised attempt to secure new tax-raising powers for the Manchester Mayor.  Powers which I fear would open the floodgate for more taxation aimed at hard-working people in our borough and city.

I explained to Councillor O’Rourke that his new ‘Hotel Tax’, which he described as “Just a little bit of money”, would amount to tens of millions of pounds of additional taxation every year.  It would raise the price of accommodation across the city and, in an extremely price competitive industry, put our hoteliers at a distinct disadvantage against those in other destinations.

I asked him to consider what impact a compulsory £4 – £5 price increase per night, might have on some of our independently operated, small hotels; this could amount to as much as a 10% increase in their nightly room rate.

I explained that when people don’t come to stay in our area it is not only the hotels that lose out; restaurants, theatres, shops and other service sector businesses all miss out on that custom too.

I told the Council chamber that this was an economic matter, which had bigger implications than Councillor O’Rourke had considered.  Perhaps, as the Cabinet Member for Business, he should have been more focused on businesses, rather than using them to stuff Mr. Burnham’s coffers with cash.

Amidst the heckles from the Labour benches and calls for me to be ‘kinder’, I did a quick bit of maths.  Councillor O’Rourke suggested that his new ‘Hotel Tax’ could be applied to around ten million stays each year (this did not multiply the rate by the hotels’ stars) so possibly raising as much as £30,000,000.00 per year for the Mayor.  In tonight’s motion, the figure of 268 homeless people was also quoted.  So, by my calculations, in the first year alone, we could buy every homeless person in Manchester a brand-new house.  Now that’s a lovely idea, but I can’t see it happening quite like that.  How much will be spent on administration and wasted in other ways?  How little will be spent on really solving problems?

I also pointed out that the hospitality sector in our city is one of the most generous when it comes to caring for the homeless.  I have had first-hand experience of working with organisations like Coffee for Craig, which feed and care for homeless people across the city.  The way they do this isn’t with Mayors funds or grants, they do it with the support and generosity of businesses from the hospitality and service sector.  Hotels and restaurants give food and their time. Their chefs and staff go into the city to serve hot meals, and they do it willingly and freely.

Serving meals to Manchester’s homeless with the amazing people from Coffee 4 Craig.

I was pleased that my Conservative colleagues joined me in voting against this motion.  We suggested instead that hotels and restaurants across the borough might be encouraged to gather donations from their customers (many already do) and that these could be used to support more local projects in the areas in which they are collected.

Whilst some may consider me ‘heartless’ and ‘horrible’ there is a moral issue here.  Tonight was not about solving the problem of homelessness in Greater Manchester.  It was about a socialist opportunity to use the plight of those people to gain new taxation powers for the Labour Mayor and I am glad to have spoken against that.

To the haters, I can say that I will continue to give my backing to genuine projects that offer support to people in our borough who find themselves homeless.  In my experience, it’s those unsung heroes, without political or financial motive, who are really helping to change lives.