At a recent conference, Sir Michael Lyons, who is currently undertaking an inquiry into the funding of English local authorities, argued that a bed tax on hotel accommodation was a ‘sideshow’ to his overall remit.

It might be a sideshow to him, but it’s more than that to most hoteliers.

When Grant Hearn, chief executive of Travelodge, argued that extra taxation for the hospitality industry was no trivial matter and warned that the bed tax proposal could price tourists out of locations, Sir Michael countered: “What is it about the tourism industry that breeds hyperbole?”

He may have been indicating that the £1bn-plus that it is calculated would be raised by a bed tax would be small beer alongside the funds that are needed to sort out local authority finance throughout the country. Nevertheless, his remarks betray a cavalier attitude towards the industry, which is already regarded as one of the most expensive destinations in the world, while British residents are voting with their feet by taking an increasing number of holidays aboard – thanks partly to the budget airlines. The imbalance of payments is rising inexorably and now tops £16bn. It will balloon further if this tax goes ahead.

To make matters worse, we also have the suggestion of a ‘plate’ or restaurant tax from the Labour Group on the Greater London Authority. Little wonder the industry feels undervalued.

At a time when the government is urging the tourist industry to expand and develop with a £100bn target by 2010, this hardly seems an opportune time to be adding yet more cost, in the shape of discriminatory taxes, to UK holiday and business travellers and to the general public eating out.

Not only are there objections in principle (Why pick on one industry to raise taxes? What is a ‘meal’? How will ‘accommodation’ be defined?) there are some practical objections to a bed or plate tax – the main one being the freedom for local authorities to raise these taxes in their own area. This will raise many anomalous situations.

A resort town such as Bournemouth might not want to impose the tax because of the potentially negative impact on its number of visitors, even though the yield in revenue might be significant. On the other hand, if, say, Torquay decides to impose the tax, hoteliers there will be at a great disadvantage to those in Bournemouth.

It is significant that Sir Michael appears to be going down the road of giving authorities more powers to raise money generally, but where taxes are concerned there needs to be an element of fairness.

Would hoteliers in Torquay – if the scenario I described above comes about – feel that they were being dealt with fairly? The answer is no. And that is exactly how the hospitality industry feels, too.