The next item is a statement by the Minister for Economy: statutory licensing scheme for all visitor accommodation in Wales. I call on the Minister, Vaughan Gething. 

Diolch, Dirprwy Lywydd. I am pleased to have the opportunity today to provide an update on the steps we are taking to help secure a sustainable and thriving visitor economy that supports and enhances communities across Wales. The visitor economy is rapidly changing, and the role of visitor accommodation presents major challenges for communities across the world. For example, the growth of online booking platforms has brought many benefits, such as new routes to market and increased consumer choice. However, we are aware of the concerns around compliance with existing requirements and the impact of short-term lets on housing stock and our communities.

Our plans to develop a statutory licensing scheme will be focused on levelling the playing field as part of a long-term response to the major challenges that we face. Our co-operation agreement with Plaid Cymru commits to a statutory licensing scheme for holiday lets as part of a package of measures to address the negative impact second homes and short-term holiday lets can have on the availability and affordability of housing for local people in our communities. In July of this year, the First Minister and the leader of Plaid Cymru confirmed plans to introduce a statutory licensing scheme for all visitor accommodation, including short-term lets, making it a requirement to obtain a licence, with the aim of raising standards across the tourism industry.

Prior to that, and over the course of the past year, we have been exploring and engaging with stakeholders how such a scheme could work in Wales. Contractors were appointed to undertake this work last year and they conducted interviews and focus groups with key stakeholders from local authorities, sector representative bodies and accommodation operators. They explored the benefits of such a scheme and the key considerations of how such a scheme could be taken forward and implemented here in Wales. A review of how other destinations globally approach such schemes was also taken into account. This initial work has shaped the consultation that the Government will look to be launching shortly.

But first, Dirprwy Lywydd, I'd like to outline the aims and proposed benefits of such a scheme. The primary aim is to establish a level playing field for all visitor accommodation businesses operating in the sector. The concern around the lack of a level playing field has been a long-standing area of discussion. Specifically, there are concerns that certain parts of the sector, for example informal short-term lets, do not meet or comply with their statutory obligations, whereas established, bona fide businesses do. A statutory licensing scheme could provide the mechanism to address this through requiring operators to evidence that they have certain requirements in place, such as the correct insurance, confirmation of planning status, evidence of fire-risk assessment, gas safety certificate, proof of electrical safety, to list a few examples. This scheme will help to ensure that there is a consistent standard that all operators should meet. Having a scheme where visitor accommodation businesses must meet a certain threshold of requirements conveys a very clear message to consumers that visitor accommodation businesses in Wales meet certain requirements on standards and safety.  

A scheme would also give us enhanced intelligence—a comprehensive database, which is not currently available, of exactly who is operating in the industry. It is currently not possible to determine how many visitor accommodation businesses there are in Wales or in any given community. Understanding the scale and the nature of the sector will be an important tool in developing future policies at either a local or national level. Establishing a statutory database of licensed visitor accommodation businesses would give the Welsh Government and other partners, such as local authorities, a mechanism to communicate on key issues relating to the sector. We saw how challenging it can be to reach all parts of the sector through our recent experiences during the COVID-19 pandemic.

We also recognise that a statutory licensing scheme will provide an important foundation for other policy areas. Having the information provided by such a scheme will provide data on the scale and nature of our tourism offer to inform policy considerations, locally and nationally, around evidence-led management of second homes, holiday lets and developing the visitor economy and infrastructure. It could also support the collection of a visitor levy. For the visitor levy, having a licensing system would provide a comprehensive list of all visitor accommodation providers in an area. This could support the ongoing administration of the levy, as those who will require a licence will likely be the same as those who will be required to charge and collect a levy. There are clear links between these proposals, and I would encourage contributions to the 12-week visitor levy consultation, which closes on 13 December.

As I previously mentioned, in looking to establish a statutory licensing scheme, we're also looking at similar mechanisms operational or in development across the world. In the UK, different approaches have been taken by our neighbours and are at different stages of development. In Northern Ireland, visitor accommodation providers must receive certification by Tourism Northern Ireland in order to operate, and this scheme has been in place since 1992. The Scottish Government has legislation in place requiring all short-term let hosts and operators to obtain a licence to operate, unless specifically excluded. Existing hosts and operators have until 1 April next year to apply for a licence in Scotland. And in England, the Department for Culture, Media and Sport recently closed a call for evidence on the potential introduction of a tourist accommodation registration scheme. The purpose of the DCMS consultation is to better understand the benefits and challenges of the increase in short-term and holiday letting in England, and to gather initial evidence on the potential impact of a range of possible policy responses. There are other examples too, such as the compulsory schemes operating in the Isle of Man and in the Republic of Ireland. We're looking to learn from these various examples, including what lessons can be learnt from the Rent Smart Wales model in terms of developing our own scheme.

Following a series of engagement sessions with key stakeholders over recent months, we will shortly be launching a formal consultation to seek views on the shape and nature of the proposed statutory licensing scheme here in Wales. Feedback on some of the aims underlying a proposed licensing scheme has been supportive, especially in relation to establishing a level playing field, developing better intelligence and increased consumer confidence. However, some concerns have been raised around the perceived regulatory burden that may accompany a licensing scheme. This includes the work involved in providing evidence of current use in relation to planning, and the role played by local authorities in meeting this demand.

Both the Welsh Government and Plaid Cymru agree that a statutory licensing scheme offers the most robust mechanism for delivery in Wales, being an approach that sets a standard for visitor accommodation businesses to operate. However, the consultation will enable a range of views to come forward, including on the requirements of a licensing scheme. We'll be seeking views on how such a statutory scheme could operate, be that nationally or at a local level, or a hybrid model combining elements of both. In addition, we'll be looking to gather views on whether all visitor accommodation businesses should require a licence, or whether there should be any exceptions. We'll also look to test how frequently licences should be renewed, and the licence fees that might need to be charged. In deciding on any fee structure, we are of course mindful of the pressures on businesses in the current climate.

We believe that most people would want to operate within the law, therefore one of the aims is to develop a scheme that will ensure a high level of voluntary compliance. However, proposals for compliance and enforcement measures, including penalties, to ensure fairness will be tested at consultation. We will be launching the consultation in December and will be encouraging our stakeholders to engage in the process. Diolch yn fawr. I'm happy to take questions. 

Can I thank the Minister for his statement? Firstly, Minister, this policy of a licensing scheme was announced back in July, with the First Minister and the leader of Plaid Cymru announcing it to the press. We're now in November and it's the first time that the Chamber has had to hear in more detail about the scheme. Those in the industry have said that there's been considerable anxiety caused in the sector since that announcement, and the months' long delay between the announcement and this statement today has been unhelpful at best. So, do you accept that there has been a considerable delay and that the uncertainty has caused anxiety in the sector? And can you explain why this statement has taken so long to come to the Senedd? 

Moving on to the scheme itself, I'll perhaps start by surprising the Minister by saying that I don't actually think that a registration scheme for visitor accommodation in Wales is a bad idea in and of itself. A scheme such as this could enable the Welsh Government to follow data across the board, to see whether there are areas where supply doesn't meet demand, for example, and it could also be used as a means by the Government to promote tourism businesses across Wales, as well as, as you stated, Minister, for compliance purposes for existing requirements, as you mentioned. You also say, and I quite agree, that,

'A scheme would also give us enhanced intelligence—a comprehensive database, which is not currently available, of exactly who is operating in the industry.'

Again, I agree with that; that's something to be welcomed, particularly after the pandemic has highlighted the need for such a database to help target those who need assistance the most. So, can the Minister confirm how he intends on using this register, who will have access to it, and whether any of the financial costs needed for businesses to register will be met by the Welsh Government?

But, I'm afraid to say that the launch of the scheme today by the Welsh Government is clear—and you admitted this yourself, Minister—that it's being used as the precursor to implementation of a tourism tax. It's just the latest in a long line of policies announced by the Welsh Government since you became the economy Minister that attacks the industry and could serve to make the industry less viable against our competitors, because we know that where a tourism tax has been implemented abroad, it's been used with the intention of being a suppressant to tourism in a particular area rather than to enhance it. I want to see more tourism in Wales, and I'd hope that the Welsh Government takes the same view, but the Government's actions suggest the opposite.

The industry has always warned that registration/licencing lite would lose support if it was seen by the industry as a means of collecting a tourism tax, rather than a mechanism for capturing quality-conscious businesses and weeding out second homes offering ad-hoc casual lets.

You mentioned in your statement on several occasions that this policy will be focused on levelling the playing field. This may be the case within Wales, but in a global and competitive market, this does not put Wales on a level playing field compared to other nations. We know that, as you've said, this is a pre-emptive measure. This pre-emptive measure is a precursor to a tourism tax—a tax that wouldn't be in place in other parts of the UK. So, how on earth could that be considered levelling the playing field?

There's an attitude, I think, in Welsh Government, that they know best, particularly when the industry tells you something else—the evidence on the self-catering changes, and just 1 per cent of respondents supporting your proposals would be evidence of that. But what we're talking about here today is a serious crossroad in the future of the tourism industry here in Wales. In a recent poll, 73 per cent of holiday let owners in north Wales said that they might quit. And a Labour backbencher last week, in this Senedd, referred to people like that who are worried about the future of this industry as 'naysayers'. But surely you must accept that when three quarters of people in an industry say that they may have to quit, it's time for the Welsh Government to sit up and to listen. And Richard Bond, who's the owner of Finest Retreats, said,

'a combination of regulation and additional taxation would have wider implications for regions reliant on domestic tourism' and

'the potential detriment to local economies must not be overlooked'.

And then he went on to say:

'The only consistency is to seemingly punish the holiday lettings industry just when it needs wholehearted support to thrive'.

So, Minister, do you consider those comments, in addition to the thousands of others, to be the comments of a naysayer? Or do you think they are comments of an industry professional worried about the future of the tourism industry because of your anti-tourist policies?

Thank you. I'll deal with the constructive part of the Member's contribution first and, of course, your point about when the initial indication was announced by the First Minister and the leader of Plaid Cymru in July. Since then, as I said in my statement—you had a copy of it in advance as well as hearing me reading it out—contractors were appointed to undertake work exploring and engaging with stakeholders in how a scheme could work in Wales. And I also pointed out the interviews with focus groups and key stakeholders from local authorities, sector representatives, and accommodation operators. I appreciate that you've never been in Government, but you do have to try and test these things before coming to announce what you'd like to do, then engage with people, and we're now moving on to a stage of formal consultation, taking place next month is our objective.

I do welcome your points around the scheme and what it could mean. It's the point and the purpose of the scheme. It stands on its own merits in terms of levelling the playing field for all operators in this area. If you think about it this way: Rent Smart Wales has levelled the playing field with a set of standards for all landlords for longer term lets for main accommodation where people live. We're now looking at the benefits for this industry for shorter term lets, and there's a real logic to it, it stands on its own. But I do think that it's important to recognise that this might help us in other policy areas as well, and that's not unusual. There's nothing nefarious in that, we're not being underhand—we're being entirely open and transparent.

And when it comes to access to the register of licensed properties, I think we'd want to see that that was more broadly available so you could see, if you're staying somewhere, that it is actually a licensed premises. That's part of the point about consumers knowing that they're staying somewhere that is properly licensed and meets a level of minimum standards.

When it comes to fees to become part of the register, well that's one of the things that we're going to be testing, because in different parts of the world, they have different schemes that operate, and sometimes, they vary the fee by the size of the accommodation or whether they're in a larger group. So, those things we ought to test and understand, and that's exactly why we have a consultation and, indeed, the model about how the register should operate. And, again, we have experience with Rent Smart Wales with a system where local authorities do them—they have a lead local authority acting on their behalf. It's one of the things that we want to test and to understand. So, in that group of stakeholders, businesses—yes; communities and individuals may want to get involved; but also I'm very keen to hear from local authorities on their view on how a scheme could operate most effectively and serve the needs of their local communities, both as tourist destinations, where the economy is a big part of how the economy works in lots of parts of Wales. Whether it's Gwynedd, Pembrokeshire or Swansea or Cardiff, there are different sorts of tourism in each of those areas, but what that then means for the local communities as well.

And look, coming back to your regular point, I just think that if you want to publicly tell yourself and people this absurd fantasy that we are interested in attacking this sector of the economy, rather than seeing it have a healthy and sustainable future, then, of course, in a democracy it's your right to carry on doing that, regardless of how absurd it is. But I should gently remind you that, in a democracy, people in Government are here because of how people have voted and what they've chosen. At the last election, we were very clear on having proposals for a range of these issues within our manifesto and we've transparently come to an agreement in the co-operation agreement with Plaid Cymru. And I know that it isn't always the case that Governments of different shades try to keep their promises, but we're determined to do that.

And when it comes to your accusation about who knows best, I would remind the Member that it was only a few weeks ago that you were trying to tell all of us that the people who knew best were the short-lived occupants of No. 10 and No. 11 and the chaos they've left behind. We are doing this by properly consulting right across the sector; we've engaged with them before. We're going to have a proper consultation, and we will then look to do something that I think will raise standards across the sector, and be good for both the industry and indeed consumers. And I look forward to carrying on supporting the visitor economy and recognising the significant changes that are taking place, and, as I say, making sure that there is a healthy and sustainable future for the economy and the communities that are home to it.

There is no doubt that tourism is an important contributor to the economy. Visitors spend £17 million a day, and that equates to over £6 billion a year, in the economy here. But this is just part of the picture, because what use is a strong economy at the expense of our communities? And if this money flows out of our communities, and, indeed, out of Wales, what use is that? We must pursue sustainable tourism, which is appropriate to the communities and brings them economic and social benefits. That is, therefore, what is at the heart of this licensing system that we're talking about today, and that's why we as a party have called for this to be part of the co-operation agreement between the Government and us in Plaid Cymru.

I have previously spoken on the floor of this Siambr about the huge growth in the short-term holiday lets sector, particularly via platforms such as Airbnb, Vrbo and others. The Bevan Foundation published an excellent report on the impact of Airbnb on our communities earlier in the autumn, demonstrating that over 14,000 of the properties on this platform are appropriate to be used as homes for families to live in. Indeed, the report noted that the properties on Airbnb that are appropriate for people to live in as long-term homes equate to a third, almost, of the private housing stock in Gwynedd, and one in five of properties in the private housing stock in Ynys Môn and in Ceredigion.

The sector has grown beyond all reason; that, truth be told, is what has undermined the holiday accommodation sector in Wales—a sector that has been part of the visitor offer here for generations but is now under threat from these online platforms. And, of course, this is a central part of the steps that are being taken to tackle the gentrification that has been taking place in our coastal and rural communities, as we see up to 40 per cent of properties in some communities lying empty for large parts of the year.

Of course, some of the concerns expressed with regard to these steps are based on the lack of full data available to us in terms of definitions and so on. So, does the Minister agree that, when this latest element is operational, the richer information that we will have about what constitutes genuine holiday accommodation and what is a second home will allow us to better target taxation measures and so on in future? Anyone who has truly engaged and consulted with the holiday accommodation sector, as I have done, will know that the sector has been calling for a licensing system for some years. Those providers who operate through effective and principled companies, like Daioni in my constituency, have to comply with strict rules—rightly so—to ensure that their guests receive the best and safest possible experience. Unfortunately, the same is not true of platforms such as Airbnb and Vrbo. Anyone can advertise a property on these platforms, and undercut and undermine those conscientious providers in the sector who strive to deliver the best possible provision.

A licensing system will drive up the standard of provision and will ensure that visitors who come to Wales have the very best possible experience on holiday here, with providers who have clearly invested in their businesses and are committed to the safety of their visitors. The requirement to have a licence and to maintain it will provide communities and visitors with greater control. We would wish to see a clear mechanism as part of the detailed proposals for a licensing system to enable communities to raise complaints about nuisance properties—for example, a property on a street that has been turned into Airbnb accommodation that is affecting local amenities due to noise or waste. Can you, therefore, confirm that the intention is that a mechanism of this kind to deal with concerns will be put in place when things go wrong? Thank you.

Thank you for the comments. I think there was one question at the end around a complaints mechanism, and that's part of the point about having a licence with registered properties that acquire a licence—to meet the standards and then to make sure that it's operating in a manner that's in accordance with its licence. That's the point I made towards the end. I think most businesses will want to comply with the conditions and will want to be within the law on operating their business and turning a profit. But, we do need in almost every system where we're looking to have some form of outline measures that are set out in statute, you need to have some way of actually trying to enforce those. So, that's what we're looking to test in the consultation. It will be important to hear both from communities and from stakeholders, because a number of businesses themselves, I'm sure, will have ideas about how they think it could be a fair way to deal with people. It's sometimes typecast as businesses won't want any kind of regulation that's effective, and yet, actually, lots of businesses want effective regulation that makes sure that they're not undercut by people with less scruples and less care for their impact on the local community. So, it's part of what we're definitely looking to test in the consultation. 

I broadly agree with a range of your points made in the contribution. We do want sustainable tourism, and it's the variety of the offer, whether it's major events, whether it's the good news that the Tour of Britain is going to finish in Wales, whether it's things like traditional family holidays, long weekends, whether in rural Wales, a city or a town, but to do that in a way that doesn't take away from community sustainability. And that's why we're at this point, because over the last two decades, there has been a significant expansion in the change of use of accommodation in different parts of the country. And in that sense, in Wales, we're just like other parts of the world. Barcelona themselves are looking at the impact on accommodation of short-term lets within their major city. So, we do need to look at things like Airbnb and Booking.com, and actually most of those people want to engage in the consultation because I think they recognise that it won't just be Wales having this as a policy answer, there will be answers around the world to try to get that balance: a healthy economy of which the visitor economy is a significant part but in a way that doesn't undermine community sustainability. And I'm quite confident that the Department for Digital, Culture, Media and Sport over the border in England will be looking with genuine interest at the answers that we'll be coming to and the impact and outcome of our own consultation. 

Minister, may I thank you for bringing forward this valuable statement today? I very much welcome it and, at the risk of repeating the excellent contribution by Mabon ap Gwynfor, I would just like to state that, in this part of north Wales, in Clwyd South, we do have a major problem in some communities, those popular tourist communities, including Llangollen, where there are many domestic dwellings being used inappropriately for holiday accommodation. It's depriving good, legitimate, high-quality businesses of customers, and it's also creating tensions within neighbourhoods, where properties are being basically crammed with visitors in an unsuitable way, and of course that leads to many cars being parked in neighbourhoods as well. 

Minister, can you assure people in Llangollen and across Wales who face this particular problem, that what you are proposing will go a good way towards solving the problem of unsustainable and unsuitable accommodation being used for holiday rental purposes? And can we seek assurance from you, Minister, that you'll be communicating with the sector as soon as possible regarding the measures that you have proposed today so that preparations can be made by those owners of properties and those providers of accommodation? Diolch. 

Thank you. It's a pleasure to see the Member, and some of this work, of course, follows on from his own time in Government and work alongside the visitor economy. But, in recognising, as he does, the impact on the constituencies is not all in one direction and there are times when the impact has a direct and negative impact on the host community, and, of course, many hosts recognise that they want visitors to come to their town, their village, their city, to enjoy it, to spend money there, to support the local economy, but it's the point about the footprint they leave during their stay and afterwards as well, and that's what we're looking to do, is to balance in moving away from unsustainable and unsuitable accommodation use to move to a sustainable way of seeing the system have a real future. And so I would encourage stakeholders within his own constituency and across the country to get involved, and including examples where things have gone wrong, but also where things can work well, because we have already had engagement with the sector ahead of my statement today, and as a signal ahead of the consultation that we expect to launch in December, and there'll be time for people to get involved in the consultation itself and the events around it, and we will then of course publish a summary of the consultation responses we've had to inform the next steps that we'll make as a Government. So, there's plenty of opportunity for people to still get involved until we come up with our final answer, and to work on a journey to come together. We want a system that is going to work in the best interests of everyone and address the balance, as the Member points out. And I look forward to contributions from Llangollen, and indeed visiting again with my own family in the not-too-distant future.

And finally, Jane Dodds.

Diolch, Dirprwy Lywydd, and good afternoon, Minister. I would associate my remarks with Mabon ap Gwynfor and also with Ken Skates.

You know, on tourism, we just cannot stand still. We have a real crisis in some of our communities. Llangollen, we've heard about, and Dwyfor Meirionnydd as well. We really do need to come up to the twenty-first century in terms of the way that we approach tourism, which we value, as we've all said, here in Wales.

I do support the licensing scheme and also the visitor levy; I know we're not here to talk about that in detail. There are some issues that have been raised with me from hoteliers, for example, around the consultation—and I hear the statement—and the level of discussions that you'll be having. So, I'm just wondering if you can just outline some of the plans that you have to bring in some of those people who may have doubts and concerns around both the registration scheme and the visitor levy. Diolch yn fawr iawn.

No, I think that's a fair point about how we run the consultation as not just a paper-based exercise or an online exercise, and, of course, it will be open for everyone, so you wouldn't need to attend a formal event or be part of a particular business group or association, but I confidently expect that all the people engaged around the visitor economy and their representative groups—. I meet the visitor economy forum, made up of people in the wider hospitality world, accommodation bodies themselves and a whole range of other interests, so I expect all those organisations will respond to the consultation and take part.

I expect that people who run their own businesses, some of them will want to take part, to have their view. And I think that's the point about we want the fullest range of people to get involved, and, just as with the visitor levy, we've had in-person events; at least three of them around the country. They've been held with Welsh Government officials to try to ensure people can have answers in the event, but to know the Government is actively interested in listening, and we've worked with a range of people to get people both to those events, but also we've run an online event as well for people who couldn't get to one of the physical locations—so, the maximum amount of access. Because, if you think about this place, it's a young institution, and yet the visitor accommodation sector in 1999 is radically different to the world we're in now and what visitor accommodation looks like in most of our towns, cities and villages. So, it is about understanding the world as it is now, and having a system that is fit for purpose—as I've said, a thriving and sustainable visitor economy that is housed within thriving and sustainable communities.

I thank the Minister.