The following amendments have been selected: amendment 1 in the name of Lesley Griffiths, and amendment 2 in the name of Siân Gwenllian. If amendment 1 is agreed, amendment 2 will be deselected.

It's the Welsh Conservatives' debate on business rates for self-catering accommodation, and I call on Sam Rowlands to move the motion. 

Motion NDM8161 Darren Millar

To propose that the Senedd: 

1. Calls on the Welsh Government to reflect on the serious concerns expressed by self-catering accommodation providers across Wales regarding the assessment period for determining eligibility for qualifying for business rates in 2022-2023, and amend the regulations accordingly.

Motion moved.

Thank you, Presiding Officer. I'm grateful today to be able to move our motion regarding business rates for self-catering accommodation, in the name of my colleague Darren Millar. And in opening today's debate, I'd first like to clarify that this is not a debate on the rights and wrongs of the 182-day regulations that were announced earlier this year, and, as you know, on this side of the benches, we were against the introduction of these regulations, and in July we brought forward a motion to annul the Non-Domestic Rating (Amendment of Definition of Domestic Property) (Wales) Order 2022, which of course was defeated in this Chamber.

Our debate today is regarding the confusion and unfairness of the implementation of this Order, which, on this side of the benches, we feel are extremely unfair and unjust. What is being asked at the moment is for people to play by rules that aren't yet in place. I can't see this happening in any other situation that I can think of. So, let me explain: as we know, from 1 April 2023, evidence must be provided that a property has been made available to let for at least 252 days, and actually let for at least 182 days, and this is outlined in point (b) of the Government's amendment in front of us today. However, the Valuation Office Agency's assessment will be based on records for the 12 months prior to this date, meaning self-catering businesses will be and have been assessed on the new regulations coming into force in 2023, dating back to 2022. So, the assessment will be based on something that is not currently a requirement. In my view, and in the view of these benches, it simply not fair and reasonable to assess a business on data from when they don't need to meet these new expectations. And I believe that Welsh Government should reflect on the serious concerns expressed by self-catering accommodation providers across Wales regarding the assessment period for determining this eligibility. So, that is the issue that we're debating here today—it's the expectation of businesses to play by rules that aren't currently in place.

In terms of context for this, and why it's important to get this right, and why the current outworking of this Order is so unjust, it's partly due to the incredible importance of this sector to the Welsh economy. As you know, it's something I've mentioned time and time again in this Chamber, and the report produced by the Federation of Small Businesses on tourism this summer shows that tourism accounts for over 12 per cent of employment in Wales—that's one in seven people in Wales being employed by the sector. In addition to this, this report shows that tourism accounts for over 17 per cent of Wales's gross domestic product. It's abundantly clear that this sector is vital for our country and local communities here in Wales.

In the Government's point (a) of their amendment, they state they've consulted widely. However, I find it difficult to fully accept, as the self-catering accommodation sector and leading figures in the tourism sector, in my capacity as chairman of the Senedd cross-party group on tourism, have outlined their sheer confusion, anger and frustration regarding the implementation of this Order in front of us—again, an expectation of those businesses having to play by rules that aren't yet in place.

The final part of today's motion I'd like to focus on today is actually point (c) of the Government's amendment, which states:

'these changes are part of a wider package measures...designed to support vibrant local communities, in which people can afford to live and work all year round.'

On the face of these words, I'm sure Members from across the Chamber can agree with this. But, as we know, the prime reason for these regulations being brought in was to differentiate between second homes and legitimate self-catering holiday accommodation. However, with the criteria being assessed this year, before those rules are in place, before those regulations actually come into force, we will see a skewed set of results, as self-catering accommodation have not been given the proper time to plan, adjust their business plans and ensure their businesses are geared up for this change. So, it will not achieve what the Government are seeking to achieve. In addition to this, as we all know through the Chamber, the way these businesses are set up, and the way that people book their holidays is often far in advance—six, 12, and longer, months in advance. So, by assessing data now, before the regulations come in, self-catering accommodation have not had time to plan, and we'll see miscalculated information. Again, Welsh Government will not be able to achieve their overarching aims.

So, to conclude, Llywydd, it's extremely unfair and unreasonable to assess and judge self-catering accommodation on the old rules when the new rules come into place next April. This could lead to detrimental impacts on the tourism sector and is causing confusion in the sector, a sector that is so important to our economy and to our local communities. So, I look forward to contributions from across the Chamber in this debate, and I particularly look forward to contributions from people trying to explain why they think this injustice is fair. Diolch yn fawr iawn.

I have selected the two amendments to the motion. If amendment 1 is agreed, amendment 2 will be deselected. I call on the Minister for Economy to formally move amendment 1.

Amendment 1—Lesley Griffiths

Delete all and replace with:

To propose that the Senedd:

1. Recognises that:

a) the Welsh Government has consulted widely on changes to the criteria used to classify self-catering accommodation as non-domestic for local tax purposes, which will take effect from April 2023.

b) compliance with the new criteria will not be assessed until after 1 April 2023.

c) these changes are part of a wider package measures to designed to support vibrant local communities, in which people can afford to live and work all year round.

Amendment 1 moved.

Formally.

Thank you. I now call on Mabon ap Gwynfor to move amendment 2, tabled in the name of Siân Gwenllian. Mabon ap Gwynfor.

Amendment 2—Siân Gwenllian

Delete all and replace with:

To propose that the Senedd:

1. Recognises the concerns expressed by self-catering accommodation providers, which are under pressure from platforms such as AirBnB.

2. Believes the Welsh Government should continue to undertake the recommendations of the recent consultation to ensure genuine self-catered accommodation is distinguished from domestic properties in relation to local taxes.

Amendment 2 moved.

Thank you very much, Llywydd, and I move formally amendment 2, in the name of Siân Gwenllian. Could I start by thanking Sam Rowlands for taking the time available to present the motion, and not only to present the motion but also taking some of the time allocated to him to explain the thrust of the motion? It's regrettable, of course, that the short time given to such debates has to be spent explaining what is meant in the wording of the motion, rather than presenting the arguments in favour of the motion.

And I think it's important that I note here my disappointment regarding the wording of the motion and how unclear it is. A good few of us within the Plaid group and outwith the group tried to decipher this motion today and had failed to understand it because of the lack of clarity. Submitting poorly worded motions does our democracy no favours, and, indeed, there is a risk that it will mislead the electorate as those of us from different parties debate different things at cross-purposes.

Will the Member take an intervention?

Of course, Janet.

Thank you. Could you just tell this Chamber whether you've had any approaches from constituents running this kind of business on this matter?

No, I can't answer the question—I'll just wait for the interpretation—I can't answer that question, I'm afraid, Janet, because it wasn't clear what the purpose of the wording of the motion was. I didn't understand the motion, so I can't answer that question.

However, if I have understood the explanation that has been given, then the motion as it has been submitted, and the motion that we'll be voting on, refers to the wrong year. The motion talks about eligibility for qualifying for business rates in 2022-23, this year, rather than 2023-24, which is what it should be referring to.

It's like trying to search for train times on the Transport for Wales app. I don’t know if you've noticed, but, if you input the wrong time, then the app tells you that it's impossible to book a train that's already left the station. Quite right, as well.

Will you take a small intervention?

Go for it.

I'm sure you know the word 'retrospective' and that's the point that my colleague Sam Rowlands is making. The approaches I've had to me by business owners—distraught business owners—is that the year that they are going forward, they're looking back and taking into account business that was affected during COVID. And so it is unjust that they're now—. They technically are in breach of the new guidelines, going forward, but they didn't know at the time, and they had no option, because this Government locked them down so they couldn't actually trade.

Thank you, Janet, for the intervention, but that's not what's written in the motion, and that's not what we'll be voting on. I thank Janet for that, but, for that reason, we should vote against this motion. So, we've submitted our own amendment, and we've discussed the amendment before, so I won't take the time now to discuss the amendment further today, but I hope that you will support the amendment because the motion is so unclear. Thank you.

Janet Finch-Saunders.

I wasn't actually down to speak, but—[Laughter.]

Yes, you are down to speak, but if you don't want to take that time, then—

No, I'll take every opportunity, actually.

So, basically, this is a mess, Minister. I've been approached by so many now. I'm sorry, I can't see where the confusion is on the motion tabled by my colleague, and to be fair, Sam Rowlands eloquently laid out the foundations of what the concern is here. This is unfair, it's unjust, and you cannot retrospectively apply charges for a period of time when those business owners did not have any control over when they could open. The big worry I have is that we're told by the Welsh Government when we write in, 'You need to go to your local authority; they can apply local discretion’, but we go to the local authority and they tell us, 'Oh, I'm sorry, it's the Valuation Office Agency, also the Welsh Government'. As I've raised before in this Chamber, the VOA has a service level agreement with the Welsh Government—or should have—and if you're procuring a service from the VOA, then ultimately you have the right here, Minister, to be able to actually tell the VOA how you want this law applied. So, from my perspective, it is unjust, it's unfair. I would just make sure that—[Interruption.] Yes.

Do you think it is a shame that we have to have this debate today? These things are coming forward because of a poorly thought-out policy brought forward by the Welsh Government just to keep their chums in Plaid Cymru happy.

I tell you what, I will say this. The Christmas season is almost upon us, but what I will say is that, this year, I have been mightily surprised and rather disappointed by the anti-visitor, anti-tourism rhetoric. And I tell you now, I am receiving e-mails from all over Wales, from all your constituents, saying that we're right, and you're wrong.

The Minister for Economy to contribute to the debate—Vaughan Gething. 

Thank you, Llywydd. As Members will know, we have debated this matter before. On 27 April, the Minister for Finance and Local Government responded to a debate on taxes and tourism making all of these similar points, and on 6 July, she responded to a motion to annul the legislation in question. It is clear that there is majority support within the Senedd for our change to criteria used to classify self-catering accommodation for local tax purposes. It's also clear that these changes are needed to help tackle the problems presented by the numbers of second homes and holiday lets in some communities. The changes also address a situation where letting a second property for just 10 weeks a year could result in the owner paying no local taxes.

On 2 March, more than 12 months before the changes take practical effect, we announced the outcome of our consultation around local taxes for second homes and self-catering accommodation. Since then, we have set out the Welsh Government's decision and the timing of changes. The legislation came into force on 14 June. The changes take effect from the start of April next year, when the new criteria will be used in assessment of self-catering properties for the non-domestic rating list undertaken by the Valuation Office Agency. On that at least, Janet Finch-Saunders is right. Compliance with the new criteria will not be assessed until after April 2023. An assessment is based on records for the 12 months before the date it relates to. That means that an assessment for a given date in 2023 will consider evidence from the equivalent date in 2022 onwards. This process is not new. In applying the new criteria, the VOA will not remove a self-catering property from the non-domestic rating list prior to the start of April next year.

In preparing the legislation, we took account of all the relevant timing considerations, including the pressing need to address the issues presented by the large number of second homes and holiday lets in some communities. We concluded that the announcement and publication of plans and legislation provided sufficient notice for local authorities, property owners and other stakeholders to prepare for the changes. The legislation was, of course, scrutinised by the Legislation, Justice and Constitution Committee, and its report did not raise any technical scrutiny points.

We've explained the reasons behind our decision to increase the letting criteria. The properties concerned will be classed as non-domestic only if they occupied for businesses purposes for the majority of the year. If they're let on a less frequent basis, they will be liable for council tax. This is about property owners making a fair contribution to the communities where they have homes or run businesses.

The Welsh Government recognises the strength of feeling amongst operators and has listened to representations from individual businesses and industry representatives. We recognise that some self-catering properties are restricted by planning conditions preventing permanent occupation as someone's main residence. An exception from a council tax premium is already provided for one type of planning condition, and we're currently consulting on legislation that will extend that exception to other planning conditions. Our intention is that any changes are brought into effect from April 2023, alongside the increased thresholds. 

We're currently consulting on revised guidance for local authorities on additional options that are available if self-catering properties restricted by planning conditions do not meet the thresholds. These options include discretion to reduce or remove the standard rate of council tax liability for certain properties where considered appropriate by the local authority. As part of the co-operation agreement with Plaid Cymru, we are taking immediate action to address the impact of second homes and unaffordable housing in communities across Wales, using the planning, property and taxation systems.

We recognise—[Interruption.] I'm just about to finish. We recognise that these are complex issues that require a multifaceted and integrated response. Changes to taxes alone will not provide the solution; that is why we are implementing a package of interventions. I ask Members to support the Government amendment today.

Peter Fox to reply to the debate.

Diolch, Llywydd, and thank you to everybody who has contributed today. Can I thank Sam for introducing the debate? Presiding Officer, we've discussed the Welsh Government's changes to non-domestic rates for self-catering accommodation in detail in this Senedd, as the Minister pointed out. We've heard the concerns of businesses about the impact that the new threshold will have on self-catering accommodation providers and their concerns about how this will impact the viability of their businesses. It is very clear that, on this side of the Chamber, there is still disagreement with this overall approach, and neither do many accommodation providers across the country support this.

However, as Sam has pointed out, the crux of today's debate is about the technical details of the new regulations, specifically regarding the assessment period for determining eligibility in qualifying for business rates in 2022-23. As Sam Rowlands pointed out, the implementation of the Order is unjust and unfair, as Janet supported, and I agree. The Welsh Government should reflect on the real concerns expressed by the self-catering providers. The Minister suggests that he has listened to their concerns. Well, the Welsh Government needs to respond and reflect further on those concerns of that industry.

Mabon thanked Sam for explaining the detail of the motion, and, sadly, had to spend most of his contribution trying to decipher what the motion was trying to say, which was a shame. Janet has been approached by so many people and has been championing this situation, as Sam has, and as others have, for many months. Business owners keep sharing their concerns about the unfairness of this process, and their concerns that there is this anti-visitor approach that keeps resonating in this Chamber when we have this debate. As James supported, it is a shame that we're having to have this debate because people aren't being listened to.

Minister, you may be missing the point of this debate today. We hear how you are supporting the industry and supporting the providers, but it doesn't feel that way to them. The fact is that using the same thresholds from 2021-22 as the basis for establishing business use for 2022-23 is unfair. Using a period in which businesses were closed for such long periods of time due to COVID is inherently wrong. Periods of higher demand in the year, as the Welsh Government has used to justify its choices, do not balance out the fact that the demand was suppressed across the year.

As the Federation of Small Businesses has said, as a result of the responses to the pandemic, businesses in different contexts and locations would have needed to react differently to the pandemic at different times, and this on the basis of their own judgement outside the law. For some contexts, it may have been responsible to keep the letting closed, even if they were legally allowed to be open. It is then wrong that during a pandemic a business owner should be actively punished for acting responsibly. As such, we need to rethink the threshold and to use the threshold from previous years so that it is more fair to businesses and better reflects the usual circumstances that accommodation providers operate within. We need to listen to them to better understand what it is they need rather than impose an arbitrary threshold on them.

In closing, Presiding Officer, I ask Members to support the original motion on the agenda paper before us today.

The proposal is to agree the motion without amendment. Does any Member object? [Objection.] Yes, there is objection. I will therefore defer voting under this item until voting time. 

Voting deferred until voting time.

We now reach voting time, and we will move to the vote unless three Members wish for me to ring the bell.