Tom Giffard MS is the Shadow Minister for Culture, Tourism and Sport
The Welsh Labour administration are introducing a new tax on jobs: their so-called visitor levy. This will be a punitive tax on the tourism industry, unwanted and unnecessary. It is a precursor to how Labour would govern from Westminster. Their approach is not one for enhancing the tourism sector, but of taxing it to oblivion.
Labour are fixating on introducing this tax. With inflation rising, it can only worsen Wales’ position as an attractive tourist destination. 1-in-7 jobs in Wales rely on tourism. That’s nearly 200,000 livelihoods that will be put at risk by this decision. Imagine this policy rolled out across the UK: the decimation of our country’s reputation as a worthwhile place to visit.
Welsh Conservatives have lead the charge against this self-destructive move. The tourism industry are united in their opposition of this proposal from the Wales Tourism Alliance to UKHospitality. Labour will cite other countries. They fail to mention that many of these places which have introduced a tourism tax on hotel bills have significantly lower or no VAT applied to hotels.
Venice decided to introduce a tourism tax precisely in order to deter tourists from visiting as they were concerned about visitor numbers. Bhutan has recently raised their tourism tax with the same expressed rationale. Their decisions clearly show that these taxes are used to deter, rather than encourage, visitors to an area.
Labour’s own consultation document admitted that “some destinations use visitor levies as a mechanism to restrict or reduce visitor numbers”. Their partial regulatory impact assessment stated: “Reduced competitiveness is a possibility”. Wales does not suffer from over-tourism. It is a vital sector of the Welsh economy and should be encouraged, not taxed to destruction.
In their assessment, they go on to cite a study that expresses quite clearly the case for reducing taxes on the sector in order to support it – contradicting their already flawed rationale. Given the intensity of worry surrounding the imminent implementation of this new tax, the lack of clarity from the Labour Government is lamentable.
We are left speculating as to how the tax will even be applied. There has been no guarantee that this tax would see any improvement to tourism offers in local communities .The proceeds are likely to get used by councils to fund other programmes such as free school meals. We must not forget that the ‘introduction of tourism levies’ was a core tenet of Labour and Plaid’s cooperation agreement.
Councils have already said that the school meals policy is costing more than they have been allocated for its implementation. This leaves Wales in the bizarre situation where we will be taxing one of our most valued industries to feed the children of millionaires. The consultation itself is a pointless affair, costing Welsh taxpayers dearly and drawing attention away from voters’ priorities.
The update given to the Senedd on the consultation was woeful. Littered with oxymorons, we were told that the contribution would be small, yet the amount will be chosen by councils with no hard cap proposed. Mark Drakeford has even stated that the tax will not only be applied to those holidaying in Wales, but to those visiting Wales for other reasons too. But we are still unclear what this would look like.
We estimate that this tax will cost an additional £75 to families visiting Wales, if the European countries that have introduced such a levy are anything to go by. Labour are being wholly disingenuous when they try to argue that this price tag, during a cost-of-living crisis, will not deter visitors to Wales in their droves.
A recent report by Visit Wales pointed to the many merits of taking a holiday in Wales. Our nation is in the fantastic position of being a relatively inexpensive place to visit with many areas of outstanding natural beauty. Those surveyed ranked value for money as the main factor for consideration when deciding whether or not to visit.
According to the survey, around 3-in-5 of the UK holiday market have taken a short break or holiday in Wales previously and intend to do so again. This represents a large potential market that will only be discouraged by the additional costs incurred by such a regressive levy. Labour’s determination to press ahead with this policy during times is a sign of their arrogant entitlement based on their perpetual rule.
This is yet another example of their on the hoof policymaking, taking inspiration from other countries with different circumstances and needs to our own to churn out a steady stream of disastrous policies in order to chase headlines. Labour effectively uses Wales as its laboratory for bad ideas. Hence why Sir Keir Starmer does not endorse policies such as these at a national level.
The policy is emblematic of a Labour Party that regularly commits acts of economic self-harm in order to virtue signal. For the last quarter of a century, they have found themselves in a perpetual cycle of introducing new taxes and hiking up existing taxes to fund fanciful programmes such as the UBI ‘pilot’, countless diktats, and minor rule changes.
Unfortunately, this decision comes as no surprise from an administration that has chosen to spend £100 million on more politicians in Cardiff Bay as Wales faces poor educational outcomes and significant NHS backlogs. They should be working on supporting jobs in the tourism sector, not creating new jobs for politicians.
Labour’s serial mismanagement of the Welsh economy should not gone unnoticed. Wales has the lightest pay packets in the UK as a direct result of Labour’s steering of our economic direction. If Labour achieves power at a UK level, rest assured these issues will arrive at the doorsteps of household across the UK.
Jeremy Corbyn is no longer at the helm, but his socialist acolytes and cheerleaders remain. We must not forget that Starmer championed the Islingtonian’s ascension to Number 10 and stood on the reckless manifesto that the British public rightly rejected. Drakeford’s insistence on calling his latest disastrous diktat a “visitor levy” does not disguise the fact that it is a harmful tax on Welsh jobs and a tax on enjoyment.
A tourism tax is the wrong policy, at the wrong time and is evidence of how out of touch the tired Labour establishment in Cardiff Bay has become.