I’m delighted to have the opportunity to take part in this debate. In the few weeks that this idea’s been floated by the Welsh Government, I personally have received a huge amount of correspondence from businesses, individuals and trade organisations that are, without exception, against this idea. Let me be clear: I am pleased that the Assembly now has some responsibility for its taxes, but if taxes are going to be imposed then they’ve got to be not only fair but also have the effect they are designed for. The worst type of tax is one that impacts on the individual business and reduces income and therefore tax take, and from what I see, this proposed tourist tax is such a tax. There is no evidence that it works. There’s no evidence that implementing it across the board throughout Wales would be effective. And in a nation where we share such a long land border with England and compete with England for many tourists, it promises to be counter-productive.

I represent a constituency that covers two counties where the tourism industry is key to our economic prosperity. In Pembrokeshire, tourism is worth £585 million a year, and in Carmarthenshire £370 million a year. The tourist industry creates the equivalent of 5,683 full-time jobs in Carmarthenshire alone. Whilst I’m not claiming that the whole industry would be put at threat, it is undeniable that a tourism tax would have a serious impact on visitor numbers and consumer spends.

I have looked at how such a tax or occupancy levy or bed tax works in other European nations. We need to remember though that, traditionally, occupancy rates are far higher than in the UK, and therefore we may not be comparing like with like, Cabinet Secretary, and that is something I would like you to really address. For example, in Germany, business travellers are exempt. Belgium reduces VAT to all Belgian hotels and restaurants from 21 per cent to 6 per cent, but it does then have a city tax on top. I do laugh slightly at Plaid Cymru saying they want to be responsible for their fiscal powers and that they’re looking forward to it. Well, hurrah, I agree with that, except you spent most of your debate talking about a tax that we actually have no responsibility for and no leverage on, which is the rate of VAT. Portugal—[Interruption.] Portugal only applies the tax for the first seven days of travel. So, what I’d like to understand, Cabinet Secretary, is what kind of models you would be looking at, how you would be examining them and how you would be evaluating them against the current background that we have in the United Kingdom, because whether it’s Labour in Westminster or the Conservatives in Westminster, VAT has been at this level for quite some time and I don’t see it changing anytime soon and we need to understand that to make sure that we do not overtax our own people.

The tourism sector in Wales does make up the highest share of workforce of any of the UK nations: 12.7 per cent of the total workforce, compared to 10 per cent in Scotland, 8 per cent in England and only 4 per cent in Northern Ireland. So, tourism is incredibly important to our nation and to our economy. Twenty-five per cent of all VAT-registered businesses in Wales are in the visitor economy.

As far as Pembrokeshire and Carmarthenshire are concerned, I’m worried that it will hit locals just as much as tourists. It will make people think twice about having that night away in a local hotel, staying over at a wedding or holidaying in neighbouring parts of Wales. It will have a knock-on effect on other local businesses. In Pembrokeshire and Carmarthenshire, we’ve encouraged many, many farmers to diversify, and there are some truly spectacular successes. But how will this tax impact on those diversified businesses?

Whilst the major holiday season is the main income earner for the tourism sector in Wales, we also find the shoulder season an important period for the industry. However, this mainly attracts UK visitors and I am concerned about how a tourist tax will impact on that particular market. We will be less attractive than Cornwall.

The UK currently ranks one hundred and fortieth out of 141 countries for price competitiveness, primarily due to the level of tax that visitors already pay. The UK charges a full rate of VAT on all three components of visitor expenditure: accommodation, restaurant meals and attractions. Other parts of Europe don’t. Also, our VAT is twice the European average. By adding a further tax, this will then make Wales even worse off and I’m concerned that this is just another tax for the conglomerated budget of the Welsh Government. Will this money be ring-fenced? Who will collect it? How will it be reinvested in tourism? And, unlike the tax on plastic bags, which was designed to change culture and behaviour, this, Cabinet Secretary, seems to me to be just a tax on wealth and leisure and I would like to know how much it would cost to implement and the ongoing consequences.