1. Will the Minister outline the Welsh Government's plans to increase the classification of self-catering accommodation for local tax purposes? TQ630

On 24 May, I laid the legislation required to change the self-catering thresholds. This followed my announcement on 2 March and a technical consultation. The legislation will come into force on 14 June, but will have practical effect from 1 April 2023.

I thank the Minister for the answer. Can I just start by saying how disappointing it is that such a significant change was announced by Welsh Government in a written statement, and it has instead had to take a topical question to drag you here to the floor of the Senedd to explain—

I answered a question on this in questions this afternoon. We debated it a couple of weeks ago. Come on. 

—these changes instead? As my colleague Peter Fox said earlier, this change has sent shock waves through the self-catering holiday industry in Wales. I don't know how to put it any clearer than this, Minister: businesses across Wales will have to close as a result of these changes. The sector itself was even open to changing the criteria. They asked you to raise the threshold to 105 qualifying days, up from the current 70, but they've been ignored in favour of this target, which most operators say they simply won't reach. But perhaps the most stark message within your written statement is where you said:

'There is limited evidence available in relation to some of these considerations'.

Minister, you were sent mountains of evidence from relevant bodies, groups and businesses. Here is the submission from the Wales Tourism Alliance alone—over 1,500 replies right there. And in that consultation, less than 1 per cent of the total respondents actually agreed with the Welsh Government's plan to increase the threshold to 182 days. Minister, what's the point in a consultation if you're not going to listen to it? These are your constituents and mine, and they live in places like the Gower peninsula, and they've totally been ignored in favour of a back-room deal with your coalition partners in Plaid Cymru. 

And even in your own statement, you say, quote,

'I recognise that the stronger criteria may be challenging for some operators to meet.'

End quote. But you go on to offer absolutely no solutions at all as to how they can overcome the challenges. I can only therefore assume, Minister, you're content for those businesses to shut their doors for good. And as they shut those doors, I think one of your Government Ministers said it best when he said,

'we don't really know what we're doing on the economy.'

So, Minister, will you please reconsider this ridiculous decision that will close businesses up and down the country, and instead consider backing, rather than taxing, these businesses?

Before the Minister answers the question, let me just be clear: she did not need to be dragged to the Chamber; she is a most co-operative Minister in agreeing to answer the topical question once I'd decided that it could be asked. So, no dragging was necessary. 

Well, I am perplexed as to why anyone would be surprised by the announcement that has been made, given the fact that, by your own reckoning, there has been huge engagement: 1,500 responses provided to us by the Wales Tourism Alliance, which we obviously were grateful to receive; 1,000 responses to our original consultation; and 500 responses to our technical consultation. So, how anybody can be surprised and have not anticipated a decision on this, I just don't understand. We've tried very hard to be as inclusive as we can in the development of these particular issues. 

It is the case that these changes are intended to ensure that self-catering businesses are making a fair contribution to the local economy. Now, who could object to that apart from, perhaps, the Welsh Conservatives? Where a property is let out on a commercial basis for 182 days or more, I think that it is fair to recognise that that business will be making a contribution to the local economy. It will be generating income and it will be creating jobs, and we do know that there will be plenty of businesses that are able to meet that threshold. For those who can't, obviously, there are options available to them—I'm surprised I have to spell them out. Changing the business model might be one, or providing that property as a long-term let, as a rental property for a local individual or family, might be another option for them to consider.

So, there are choices, and also there's time. I made this original announcement back on 2 March. We had the opportunity to debate it in a Welsh Conservative debate on tourism quite recently. And also the changes won't come into force until 1 April 2023. So, there has been time to consider how businesses will adapt and respond to the changes. But this is part of our work that we are doing in partnership with Plaid Cymru, and it is part of our three-pronged approach to dealing with what is a genuine issue of second home properties in communities across Wales. 

Thank you to my colleague Tom Giffard for submitting a really important question this afternoon. And it is disappointing, as Tom Giffard mentioned, that this did come through a written statement and not through a proper statement here in the Chamber. As you'll be aware, Minister—. You talk about the visitor economy providing a proper contribution; you will know full well it employs around 140,000 people in this country, contributing over £6 billion to the economy here. We're talking about a contribution to Wales that's putting bread on the tables of over 140,000 people and putting roofs over their heads as well. These are the people who have huge concerns about the proposals that you've outlined here. 

In terms of providing the evidence that Tom Giffard mentioned, I chaired the cross-party group on tourism on 30 March, and officials from Government asked whether the attendees there could provide perhaps between 10 and 20 case studies to describe the impact of these proposals. Within four days—within four days—there'd been 400 case studies submitted, outlining their concerns—going from a 10 to 20 request to, within four days, 400 case studies submitted, showing the level of concern. And in the words of the Wales Tourism Alliance, UKHospitality Cymru and the Professional Association of Self-Caterers UK themselves, they've said in their report that they submitted to you: 'Our evidence shows that many micro locally-run family businesses will simply shut down.'

So, in light of this, Minister, why is it that you and the Minister for Economy are ignoring the views of this very important sector, and how can you pursue your proposed changes when these very serious concerns have been outlined to you? 

So, we've been very clear to look at what evidence is available, and it is correct that there isn't a vast amount of evidence available beyond that which was was received through the consultation and that which, additionally, was provided by the Wales Tourism Alliance. But I think one of the places where we can look for reliable evidence is the Wales tourism accommodation occupancy survey, and that does demonstrate that, over three years prior to the coronavirus pandemic, self-catering properties in Wales consistently exceeded 50 per cent occupancy on average. So, the average self-catering property will not have a problem meeting the thresholds that we are setting out. 

And I just think it is fair that businesses make a contribution to the communities in which they are located, and I'm surprised that the Welsh Conservatives would object to that. I've already indicated that I'm willing to look at exemptions in respect of those properties that have planning issues attached to them. So, that's something that officials are exploring at the moment. But this really is just about ensuring that property owners make a fair contribution to the communities and trying to reduce the number of underused properties that we have in Wales, when there is such pressure on our housing market.

Minister, you heard my question to the First Minister yesterday. I don't want to go into the length of discussion on that issue again, but I would like to know, on that particular example, how you would advise a business that has perhaps diversified, a farming business that has brought forward holiday let accommodation, and they cannot be used as second homes, they've got planning permission not for dwellings but only for accommodation use? And also, a lot of businesses across Wales do not live in an area of Wales where they can attract holiday lets for over six months of the year. It's just not possible. The market does not demand a tourist attraction for those particular six months of the year. Surely, Minister, you can understand this is an unintended consequence of this regulation that you've brought forward. How would you—? What would you offer as a solution to those particular businesses that are in that particular situation?

So, without knowing all of the details of the business—. You know, I'm not going to provide individual, bespoke advice, but I'll say, for the third time today, that I've already indicated that I will look to make exemptions for those properties that do have planning restrictions attached to them—so, for example, those diversified properties that are only available for let to holiday makers for 10 months of the year. I'll be looking to make an exception in those cases, and I'll provide a further update to colleagues on that as that work progresses. [Interruption.]

Do you want a question? Mabon ap Gwynfor.

Thank you very much. Sorry—I did put in a last-minute request to participate and I'm very thankful for you allowing me to contribute. Thank you for the question, of course.

Of course, one welcomes any steps that the Government can take in order to tackle the housing crisis, and I welcome what you've just said, namely that you are looking at exemptions for buildings with particular conditions placed upon them. It would be good to hear a little more on that, because that clearly is a concern, but I do hear what the benches at the other end of the Chamber say, that they are concerned that the sector will be damaged. But wouldn't you as a Minister agree with me that the greatest challenge for this sector in reality is not these regulations but the huge growth that we have seen in Airbnb, Vrbo and these other platforms, which are suffocating the sector with very many homes and availability of rooms, which means that those indigenous businesses who want to succeed are having difficulties, because there are too many homes such as Airbnb available, and that the regulations that you're looking at to regulate Airbnb are going to help to that end? This will also help to weed out those owners who aren't serious and are seeking to make money on the back of our communities.

Also, just to say that I am aware of an example in my constituency where owners of holiday accommodation have decided to convert that accommodation to be for local tenants. Would you welcome that kind of development too?

I'm grateful for those points, and, absolutely, that is a real option available to property owners in respect of providing a home to a local resident and also that secure income that will come to them as a result of making that choice, so that's a positive choice that property owners are able to make in all parts of Wales, and it's good to hear of those examples.

Yes, I agree that there are some real challenges facing the industry, and certainly the competition from those kinds of very short term lets, the Airbnbs and so on, is part of the mix in terms of the competition that these businesses are facing.

And I do think that the register that my colleague the Minister for Economy is looking at will be helpful in terms of ensuring that we do have a quality offer for our tourists here in Wales and that we are a place that they'd want to come back to time and time again.

I thank the Minister.