5. Statement by the Minister for Finance and Trefnydd: Annual Update on Reforming Local Government Finance

Part of the debate – in the Senedd at 4:56 pm on 5 November 2019.

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Photo of Rebecca Evans Rebecca Evans Labour 4:56, 5 November 2019

I thank Mike Hedges for his contribution there, and he began by talking about the variation in council tax levels. That's certainly something that we're very mindful of. The average for a band D property ranges from £1,092 in Pembrokeshire to £1,648 in Blaenau Gwent, and I think that that is partly as a result of the 1996 reorganisation that created a very mixed landscape in terms of the size and characteristics of those 22 unitary authorities, including some very small authorities with high relative need for local services and a small tax base. So, that's something, obviously, we're mindful of, but it also reflects the flexibility that has been given to local authorities in terms of setting council tax in their own areas. Of course, they're political decisions and the setting of council tax is very much political in nature in many cases.

Mike Hedges's contribution demonstrated really clearly the complexity of this issue, and the fact that all of these issues and all of these potential ways forward need to be explored fully to understand all of the potential implications, both positive and negative. And it's really important to do so in a way that looks at the different types of households, and the way in which different types of individuals might be affected by any particular change. But I'm really clear that we just don't seek to make change for the sake of it, but we seek to make change to ensure that the system is a better one than the one we have at the moment.

On the issue of small business rate relief for second homes particularly, I know that this is an issue that we debated with some vigour in the Assembly in a debate sponsored by Plaid Cymru very recently. It is the case that when we looked at this previously, I know that some consideration was given to removing rate relief from certain types of properties, but what the Welsh Government has tried to do is strike a balance between supporting the local tourism industry locally, but then also understanding the pressure that local authorities have in terms of ensuring that there is adequate housing within their areas.

In terms of the tourism sector, obviously, the significant benefits are recognised in our economic action plan, and the availability of good-quality, readily available self-catering accommodation is a really important part of the tourism offer that we have here in Wales. The latest official statistics indicate that self-catering accommodation accounted for almost £370 million of tourism spend here in Wales in 2017. But that said, we're very aware of the challenges that high percentages of second homes can cause in some communities that aren't reliant on tourism. So, we've discussed at length that Welsh Government is considering the way forward in this regard, and ensuring that those people who are claiming rate relief actually are doing so genuinely. I think the main concern that people have is the suspicion that there are people who are claiming rate relief for properties that do not genuinely meet the criteria. That was, I have to say, agreed by this whole Assembly in terms of trying to strike that balance between the local housing need and the importance that tourism plays for various communities across Wales. 

Mike Hedges provided some additional ideas as to how to take things forward. I said in my statement, and it's clear in the report today, that I welcome any ideas from any Member or any interested stakeholder at any time, and I'm really keen to have those discussions as to how we can improve the system and make it fairer, more progressive, and ensure that our non-domestic rates system and our council tax system contributes to our wider Welsh Government goals as well.