Day: August 23, 2024

Edinburgh’s visitor levy scheme takes another step forward

PLANS for a Visitor Levy in Edinburgh took another significant step forward yesterday (22 August), as councillors agreed key details of the draft scheme.

It is anticipated that the levy will generate tens of millions of pounds a year to reinvest in the city’s infrastructure and sustainable tourism from summer 2026.

A formal 12-week public consultation seeking further input from residents, visitors and businesses, will commence in the coming weeks. This will inform the final scheme, which will be agreed in January 2025, allowing the 18-month implementation period to begin.

Edinburgh will become the first place in the UK to launch such a city-wide levy, which will drastically help the Council manage the demands of increased tourism while ensuring sustainable investment in the visitor economy, public services, city maintenance, affordable housing and preserving the Capital’s cultural heritage.

Edinburgh Council backed the Lib Dem proposal to split Transient Visitor Levy income, after a fixed Housing investment, between: 55% city operations 35% culture and 10% destination management.

Key highlights of the draft visitor levy scheme include:

  • Flat 5% charge per night: Visitors staying in accommodation will be required to pay a small, fixed fee per night of 5% of the accommodation cost, capped at seven consecutive nights.
  • Wide range of accommodation: The levy will apply to paid accommodation including hotels, short-term lets, hostels and bed and breakfasts, but will exclude stays in campsites.
  • Funding allocation: The levy is expected to raise £45-50 million a year by 2028/29.  Revenue generated will be reinvested directly into initiatives that benefit residents and enhance visitor experiences, such as a ‘Well Kept City Fund’, affordable housing, city infrastructure, destination marketing and support for major events and festivals.
  • Shaped with industry input: The draft scheme has been shaped by many years of engagement with local businesses, residents, and tourism stakeholders including hoteliers.
  • Expected to launch 2026: When the draft scheme is finalised, early in the new year, the Council will begin working with partners to implement the Visitor Levy and make it live by Summer 2026.

Read the full report considered by Councillors and more information on the visitor levy scheme.

The decision is a victory for Edinburgh housing campaigners and trade unionists:

Council Leader, Cammy Day, said: “We can’t take Edinburgh’s incredible cultural offering and reputation as a fantastic place to visit for granted, and a visitor levy presents an innovative way of sustaining the sector and the city.

“It will significantly increase our ability to invest in the visitor experience and the tourism pressures we face, from keeping the city clean to responding to our housing emergency, so that everyone can continue to enjoy all that the city has to offer. By better supporting these services we can secure Edinburgh’s future as a top global destination.

“These proposals have been shaped by the views of residents, visitors and industry. We’re committed to making sure this is the best levy for Edinburgh and will begin our formal consultation as soon as the Scottish Government allow.

“This is a once in generation opportunity for Edinburgh and I look forward to the many benefits a visitor levy will bring, allowing us to reinvest tens of millions of pounds in sustaining and improving the things that make our city so special – for our visitors and residents who live here all year round.”

Neil Ellis, Chairman of the Edinburgh Hotels Association, said: “Edinburgh Hotels Association welcomes the introduction of the visitor levy for its intended use of improving the experience of all visitors, local, national or international, through additional spending.

“This is a fantastic opportunity to further enhance Edinburgh’s reputation on the world stage as a must-visit destination.”

Christina Sinclair, Director of Edinburgh World Heritage, said: “The visitor levy brings an opportunity to generate crucial funds to invest in our historic city, ensuring its heritage remains authentic and that the UNESCO-designated Old and New Towns of Edinburgh World Heritage Site are protected, enhanced and promoted for future generations.

Charlie Cumming, Chief Executive of the Edinburgh & Lothians Greenspace Trust, said: “ELGT are in support of the funds raised from the proposed visitor levy to provide additional resource to make improvements to the city’s public spaces. It will be encouraging to see much needed funding for the upkeep of our much-valued greenspaces that provide many benefits to residents and visitors.

“The funding will also provide an opportunity to develop sustainable improvements to help mitigate against climate change and biodiversity loss.”

Roddy Smith, Chief Executive of Essential Edinburgh, said: “We welcome the next phase of the consultation by the City of Edinburgh Council.

“The key principle for the implementation of the visitor levy remains, that the money collected and then distributed should be additional to existing Council resources and not replacement funds and be used to finance projects that primarily support the tourism sector.

“We welcome the three potential funding pots which if used appropriately will have a significant impact on how our city looks, and how we can support our crucial heritage and arts/event sectors.

“Importantly, it will also invest in dedicated marketing and promotion, to ensure our successful tourism sector continues to grow sustainably. With an effective public and private partnership driving this work, we are excited that real progress can be made.

“Edinburgh must not take our tourism sector for granted, and if the finance generated through the levy goes towards supporting our tourism sector, then the city will see economic benefits for our business both directly and in the supply chain, employment growth and much needed large infrastructure projects being delivered. This will materially benefit all the residents in the city.

“Essential Edinburgh will continue our engagement with our members, the industry and Council to move forward towards the finalisation of the scheme.’

More energy misery as Ofgem announces 10% price cap hike


23 August 2024 – OFGEM STATEMENT

Every 3 months we review and set a level for how much an energy supplier can charge for each unit of energy and daily standing charge, under the price cap. 

From 1 October to 31 December the price for energy for a typical household who use electricity and gas and pay by Direct Debit will go up to £149 per year. This is an increase of 10% and adds around £12 per month to an average bill.

The new cap is 6% (£117) cheaper compared to the same period last year (£1,834).

You are covered by the energy price cap if you pay for your electricity and gas by either: 

  • standard credit (payment made when you get your electricity and gas bill) 
  • Direct Debit
  • prepayment meter
  • Economy 7 (E7) meter

The actual amount you pay will depend on how much energy your household uses, where you live and the type of meter you have.  

Energy price cap rates 1 October to 31 December

Electricity rates

If you are on a standard variable tariff (default tariff) and pay for your electricity by Direct Debit, you will pay on average 24.50 pence per kilowatt hour (kWh). The daily standing charge is 60.99 pence per day. This is based on the average across England, Scotland and Wales and includes VAT.

Gas rates

If you are on a standard variable tariff (default tariff) and pay for your gas by Direct Debit, you will pay on average 6.24 pence per kilowatt hour (kWh). The daily standard charge is 31.66 pence per day. This is based on the average across England, Scotland and Wales and includes VAT.

Costs included in the energy price cap

The level of the energy price cap is made up of different costs, for example the wholesale cost of gas and electricity, costs to supply energy on the network and VAT. These costs are split within the energy price cap between the unit rate and the standing charge.

Read about typical household energy use and how the energy price cap is calculated on our Average gas and electricity use explained page. 

View and compare 1 October to 31 December and 1 July to 30 September energy price cap standing charges and unit rates by region. 

You can also get and compare all the energy price cap (default tariff) levels. 

Review of standing charges

Last year we started a review of standing charges. Our call for input had feedback from more than 30,000 customers, consumer groups, charities and others.

Today we have published an options paper on our ways to reduce standing charges for households, called ‘domestic standing charges’. Standing charges are set by your energy supplier and are also included in the energy price cap. Your supplier will charge you this cost each day, even if you do not use any energy on that day. The charge covers the cost to maintain the energy supply network, take meter readings, and support government social and environmental schemes, like the Warm Home Discount scheme. 

View Understand your electricity and gas bill

The options in the paper could reduce the standing charge by between £20 and £100 per year by transferring parts of these fixed supplier costs to the unit rate (the price paid for every unit of energy used). 

We know that if these changes are made it could affect people who cannot safely reduce the amount of energy they use. This could be because of their dependence on life-saving medical equipment or living in a low standard of housing with poor insulation.

We are asking energy suppliers to offer energy tariffs that have no or low standing charges as well as their current tariffs. This will mean that energy efficient households will be able to choose a tariff that rewards them for using less energy. It will also mean that other energy customers can also choose from more tariffs that meet their needs.

You could pay less for your energy by changing your energy tariff. Find out if you can change your tariff and how to switch energy supplier.  

The options paper also sets out long-term considerations relating to the assignment of network costs, as a part of a broader review of how electricity and gas system costs are recovered from users.  

We would like to hear your views on standing charges. The discussion closes on 20 September 2024. Read our standing charges options paper and feedback your views using our online form.

Support for people with a prepayment meter

We have also extended our initial 12-month allowance to cover increased debt costs associated with additional support credit which we expect to be in place for at least another 6 months.   Additional support credit is often issued to people at risk of being cut off from their energy supply because they cannot afford to top up their meter. This decision means that the most vulnerable consumers will continue to be supported and have an energy supply this winter.

Next energy price cap review

We review and set a level on how much an energy supplier can charge for each unit of energy including the standing charge every 3 months. The levels for the period 1 January to 31 March 2025 will be published by 25 November 2024. 

Caroline Abrahams, Charity Director at Age UK said: “Means-testing Winter Fuel Payment (WFP)  when fuel prices are rising by 10% spells disaster for pensioners on low and modest incomes or living in vulnerable circumstances due to ill health.

“It means an estimated 2 million older people in all, will face an even steeper mountain to climb in paying their energy bills and staying warm and well when the weather chills. With pensioners also losing the cost-of-living payments they’ve received over the last two years we simply cannot see how some of them will cope.

“This latest bad news about the Energy Price Cap rising quite significantly makes it even more obvious that means testing WFP with virtually no notice & with no protections to safeguard vulnerable groups was the wrong policy choice and one that is potentially hazardous for some older people.”

“There’s scarcely any time to tackle the long-term under-claiming of Pension Credit – for more than a decade a third of pensioners who are entitled to it have consistently missed out. And the million or so older people whose small incomes take them just above the line to claim are horribly exposed – no take-up campaign can help them.” 

“Means-testing WFP in these circumstances this winter is reckless and wrong. The Government must think again.”

Age UK urges any older person living on a low income or struggling with their bills to contact Age UK’s free Advice line on 0800 169 65 65 without delay to check they’re receiving all the financial support available to them.

Alternatively, people can visit www.ageuk.org.uk/money or contact their local Age UK for further information and advice.

National Energy Action has responded: Just now, @Ofgem announced that #EnergyBills will rise 9% from October. NEA Chief Executive @adam_scorer says, ‘There is still time for @Ofgem and UK government to act for those at greatest risk, but without support.’