Industry figures and opposition MPs have hit out at proposals to introduce a new tax on restaurant and take-away meals to boost the coffers of local authorities.
The "plate tax" proposal, submitted to the Lyons review into local authority funding by the Association of London Government (ALG), would add a 6-10% surcharge on meals, which could collectively raise £1.5b a year in additional taxation. The proposal follows controversial recommendations for a "bed tax" levy on hotels and B&Bs, which has been fiercely opposed by the industry.
Sir Michael Lyons said he was "exploring further" the potential for levying taxes on restaurants, and was studying the recommendations, although a spokesman for Lyons emphasised that the proposal was just one of a range of options being considered.
Bob Cotton, chief executive of the British Hospitality Association, described the proposals for a plate tax as "beyond belief - I thought it was a spoof when I first heard about it". He added: "What are we going to be taxing next? Pavements? Windows?"
Caroline Spelman, Shadow Secretary of State for Local Government, said: "In recent years there has been a dramatic improvement in the quality and range of restaurants in Britain. Yet I fear this high street resurgence will be choked by a new meal and take-away tax. We need to vigorously oppose these plans before they get momentum."
A spokesman for the ALG said it did not support a plate tax outright, but had submitted the proposal as part of its "blue-sky thinking" on local government funding.
Businesses say no to bed tax proposal
London's visitor economy is overwhelmingly against a bed tax, Caterer can exclusively reveal.
Under proposals being considered by the Lyons Inquiry, a bed tax would add 5-10% to accommodation bills and would not be ring-fenced for tourism.
A new survey, conducted by tourism body Visit London, shows that 92% of respondents were "completely opposed" to the idea, and 63% believed a bed tax would cause a "major downturn" in their businesses, resulting in a decline in turnover of more than 5%.
The survey, which questioned more than 125 hospitality and tourism-related businesses, also showed that a further 31% believed the tax would hit their sales by 1-5%.
Craig Beaumont, Visit London public affairs manager, said: "As the proposal currently stands, a blanket bed tax would not be of benefit to visitors or businesses that rely on them. How would we know, for example, that any money raised would be ploughed back into supporting the industry?"
Grant Hearn, chief executive of Travelodge, added: "If the British public wants more from local government, it should share the cost burden equally and fairly. What we find illogical and grossly unfair is a policy like bed tax that discriminates directly against tourists. People quickly forget the £12b a year tourists pay in tax and the 2.2 million jobs the industry sustains."
Caterer‘s Say No To Bed Tax campaign submitted more than 4,000 signed petitions from readers, who are against the tax, to Sir Michael Lyons's office in July.
By Daniel Thomas and James Garner