Part of the debate – in the Senedd at 3:52 pm on 6 July 2022.
Diolch yn fawr iawn ichi, Dirprwy Lywydd. I'd like to formally move this motion by emphasising my party's continued opposition to this arbitrary increase to the non-domestic rating of self-catering businesses across Wales. And we do side with the industry on this issue. We believe that an increase from 70 to 105 days to bring them in line with HM Revenue and Customs requirements would be far more appropriate than what is being proposed. This change in legislation has the potential to have a hugely profound impact on the self-catering industry across our country. The Wales Tourism Alliance, the Professional Association of Self-Caterers UK and UK Hospitality Cymru have warned that the tax changes could force as many as 30 per cent of self-catering businesses to close or sell up.
To give some context to these changes: currently, self-catering properties in Wales must be available to be let for a minimum of 140 days in any 12-month period and actually be let for 70 to qualify for business rates rather than council tax; under the new proposals, properties must be available to be let for at least 252 days and actually let for 182 days to qualify for business rates—an increase of a massive 160 per cent. This will have a hugely damaging impact on the businesses being able to operate within Wales and damage our economy, with many businesses that will simply just be forced to close. This, alongside a potential tourism tax and giving councils the ability to increase council tax rates up to 300 per cent on these businesses that do not qualify, leaves them facing a triple whammy of measures, which, to me, will stifle the industry and our economy in Wales as a result.
Instead, the Welsh Government has opted to press on with tax plans, despite receiving a sea of overwhelming evidence of damaging impacts from the Wales Tourism Alliance, the Professional Association of Self-Caterers UK and UK Hospitality Cymru, who surveyed more than 1,500 self-catering businesses across Wales. They said that,
'This all-Wales, one size fits all approach takes no account of the different kinds of businesses that operate in a seasonal Welsh tourism year. Nor does it respond to the fact that the problem this proposes to solve does not affect the whole of Wales, something the Welsh Government has, itself, recognised.'
During the consultation on this issue, which I'm sorry to say, Minister, seemed like a box-ticking exercise, the tourism industry supported the principle of raising the number of days that a property must (a) be available and (b) be occupied in order to qualify as a business. The majority response to the Welsh Government's consultation, which ran from the end of last year, was to raise the occupancy threshold from 70 days to 105 days, in line with those HMRC requirements—that was a 50 per cent rise, suggested by members of a professional sector that understands booking trends, marketing and customer behaviour. So, I'd like to hear in the Minister's response about why they didn't listen to their own consultation, which clearly backed a move to 105 days.
Instead, this rise of 160 per cent was suggested by just nine respondents, less than 1 per cent of the total. This has come as a complete shock to the whole industry, not just the self-catering sector. Whilst the Government isn't bound to follow exactly what a consultation tells it to do, it certainly has a duty to explain why it has totally ignored one. That still hasn't been adequately answered or explained and shows a lack of respect for the people across the country who deserve explanations, not just diktats.
Ashford Price, the secretary of the Welsh Association of Visitor Attractions believes around 1,400 businesses would go under due to the changes and many thousands of workers in Wales would have to be made redundant. He added,
'Rural areas will also be the poorer as when genuine self-catering operators cease to operate there will be fewer tourists spending money in their area during the tourist season. This "summer tourist money" helps the local shops, garages, and pubs survive the long quiet winters in many rural locations.'
That's why it's surprising to see the Minister quoted as saying that
'The purpose of the change is to help ensure property owners are making a fair contribution to local communities, for example by increasing their contribution to the local economy'.
That will be such a bitter blow to those within the industry who support local jobs, produce and local supply chains. They invest in our communities, and increasing the threshold through this punitive change will hammer economies up and down the country. We need to back the industry, after being one of the most adversely impacted industries throughout the pandemic, and not marginalise them and punish them for the Welsh Government's historic shortcomings when it comes to house building.
Finally, Llywydd, a high number of these self-catering properties will, due to this Government action, be put up for sale. However, these properties would not be available for most locals to buy as the asking price would be, in all likelihood, beyond their reach. So, I urge Members across the Chamber to vote to annul today, to show that we stand with the industry and value the contribution that they make to our economy the length and breadth of Wales. Thank you.