7. 7. Welsh Conservatives Debate: A Tourism Tax

Part of the debate – in the Senedd at 4:21 pm on 25 October 2017.

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Photo of Nick Ramsay Nick Ramsay Conservative 4:21, 25 October 2017

So, back to the tourism tax. Scepticism is not limited to Assembly Members. Even the Bevan Foundation, who have publicly supported, to be fair to them, the tax, at least in its embryonic form, have conceded that they simply don’t know what the impact of a tourism tax in Wales would be. I’m sure that even the Cabinet Secretary would say at this point we do not have an assessment of what that impact would be. This proposal has met with widespread criticism from the tourism sector in Wales. The Wales Tourism Alliance have clearly set out their opposition to the tax, arguing that

Whilst the WTA is not opposed to fair taxation, the WTA opposes a Tourism Tax on the grounds that they would harm the hospitality and tourism sector and is simply not a fair tax’.

We believe the Wales Tourism Alliance is right: a tourist tax is not a fair tax, and as the basis of the Welsh Government’s proposals for new taxes in Wales, we’ve been told in the past that fairness, equality and non-regressiveness was at the heart of their strategy. That does not feature in the proposals for this tax.

A tourist tax could result in these businesses having to increase the cost of their facilities to accommodate any rises, and it could have a detrimental impact on local economies across Wales. We know that the tourism sector in Wales makes a huge contribution to the Welsh economy, and I’m sure that throughout this debate, Members from different parts of Wales will be highlighting the very real contribution that tourism makes to their constituencies and regions. I’ve had my own postbag, as I know other Assembly Members have. One e-mail here from a caravan park owner in my constituency who is very concerned about the effects that a tax implemented here would have on border businesses, and the way that tourists who would otherwise come to Wales may simply stay the other side of the border. We know that there is a long, porous border between England and Wales—it’s quite different to the border between Scotland and England—and we would not want to see anything implemented on this side of the border that would discourage people from coming here and spending their money on Welsh businesses and the Welsh tourism sector.

It’s crucial that the Welsh Government therefore protects and supports the Welsh tourism sector so that it continues to make a healthy contribution to our economy. Let us not forget that the tourism industry is a competitive marketplace and businesses in Wales are not only competing on a global level but on a domestic level with our counterparts across the rest of the UK. If the Welsh Government presses ahead with the introduction of a tourism tax in any shape or form, then it simply makes other places in the UK a more cost-attractive proposition than holidaying here in Wales.

In places like my own constituency, which, as I’ve said, are geographically close to the English border, it could have serious implications if people choose to stay the other side of the border in the future. In assessing the potential of a tourism tax there seems to be no assessment whatsoever of the impact on border constituencies, and it’s frankly worrying that the Welsh Government has allowed these proposals to be further considered.

And of course it’s not just hotels and accommodation providers that could feel the pinch of this new tax. Wales is a small country with intricate supply chains, particularly in the field of hospitality and tourism. Pubs, clubs, cafes and shops are all businesses that could feel an impact if these proposals were to go ahead. A tourist tax could be incredibly harmful to the footfall of many of these businesses across Wales, many of whom rely on tourism income to stay in business.

As I say, it’s not just AMs who’ve been expressing these concerns, the FSB have also put their own views forward and I agree wholeheartedly with the FSB’s view that the Welsh Government should, and I quote, avoid supporting any levy that is targeted almost exclusively at small businesses.’

Areas of Wales that are most dependent on tourism to support the local economy are often also the same areas that have the least diverse economies, and we must be careful that the full potential impact of a new levy on small tourism businesses is understood.

We’re afraid that there’s simply been no assessment of regional inequalities and the role of local tourism industries, and no understanding of the potential impact of this on the industry as a whole. This tax, accompanied by the impact of the recent rate revaluations for some businesses, and the fact that industry already pays 20 per cent in value added tax, will surely do nothing to help the industry—[Interruption.] I hear some comments from Members sitting opposite on how we can oppose this. Well, you clearly don’t care about the impact of it or you would possibly have put an amendment forward that even mentioned the subject that this motion is talking about.