5. Statement by the Minister for Finance and Local Government: Visitor Levy Consultation

Part of the debate – in the Senedd at 4:22 pm on 20 September 2022.

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Photo of Tom Giffard Tom Giffard Conservative 4:22, 20 September 2022

Can I thank the Minister for her statement? I must admit, I did have to check who the Minister was with responsibility for tourism today, because it's the finance Minister, yet again, who is making another announcement from the frontbench on the Welsh Government's approach to tourism, rather than the economy Minister who is responsible for it. Indeed, the economy Minister, responsible for the tourism industry here in Wales, has never made an oral statement in the Chamber on plans for the sector since taking the role. That's because the Welsh Government sees tourism in Wales not as something to nurture, protect and enhance, but something to tax instead. And the fact that we're pressing ahead with a consultation on a tourism tax only underpins that further.

I'm afraid that when it comes to the Welsh Government and consultation to do with the tourism industry, you'll forgive me, Minister, for not being overly enthusiastic about your track record. The recent consultation on the changes to holiday let properties had only 1 per cent of the total number of respondents backing the increase to 182 days, but you totally ignored their views and pressed ahead with the changes anyway. How on earth can the tourism sector in Wales have any faith that this will be a fair consultation undertaken by your Welsh Government when your track record is so poor?

This industry has felt so ignored and so taken for granted by this Welsh Government for so long that, over the summer, we saw a farcical situation where Welsh Government Ministers were banned from visiting one of Wales's premier tourism attractions, Dan-yr-Ogof caves, because of it. In a statement that they released on the announcement of this unprecedented move, they said, and I quote:

'Owing to the Welsh Government’s anti-tourism, and anti-English policies being imposed on the Welsh tourism industry, members of the Welsh Government are no longer welcome at this attraction. Their policies will lead to tourism businesses being forced to close, and thousands of tourism jobs lost.'

Your own evidence backs that up. The partial regulatory impact assessment that you mentioned states, and I quote:

'Reduced competitiveness is a possibility'.

They also cited a study that states clearly in the abstract that

'The study’s empirical evidence suggests a strong case for reduced taxes on tourists in order to improve the competitiveness of tourist destinations and support the local tourism sector.'

That's in your evidence. The real effect of this tax being introduced will put livelihoods at risk in Wales, as one in seven jobs—around 200,000—rely on the tourism industry. This is the wrong policy at the wrong time. People across the world are dealing with high levels of inflation and an increased cost of living. Adding another bill only increases the probability of potential visitors choosing to stay away.

We know that the hospitality sector in Wales specifically, which includes tourism, has been the worst hit from COVID-19 after being locked down longer than their counterparts in the rest of the UK. Not only that, but such a tax targets exactly the people that we want to encourage to come to Wales in the first place. If this tax, as seems likely, will take the form of a charge on overnight visitors, we're taxing exactly the people who spend the most money in our local economies. But the sector has been telling you this all along, Minister, and they'll tell you again in the consultation, but they'll need to feel like they've been listened to. You also say that tourism taxes are common across the world, but under 'tax purpose and scope' in the document, it says that some destinations use visitor levies as a mechanism to restrict or reduce visitor numbers—the key side effect of your policy explained in your own document in black and white. 

And finally, as I've asked time and time again during these statements, I'm still yet to hear any assurance from the Minister, or anyone in the Welsh Government for that matter, that introducing this tax will actually increase spending by councils on tourism. Buried in the small print of the consultation, actually, is the concession by the Welsh Government that whilst there will be an expectation that local authorities will use the revenue raised through a visitor levy to fund activity that is of benefit to the visitor experience and that local stakeholders are consulted in this process, there will be no formal requirements set out in a national framework. So, there we have it: we're launching a consultation on a tax where the Welsh Government has a track record of ignoring the results. It will damage businesses across the country, reduce competitiveness and won't even see any financial benefit to the communities affected. Surely now, Minister, isn't this the time to ditch this scheme for good?