Mark Drakeford's tourism tax will be a 'disaster' for Wales

Wales Online

a day ago

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Darren Millar MS, the leader of the Welsh Conservatives, and Sam Rowlands MS, the Welsh Conservative finance spokesman, have written this joint piece against Wales' tourism tax which is going to its final vote in the Senedd on Tuesday, July 8.
This week, in the Senedd, members of the Cardiff Bay political establishment will vote together to create a new tax.
Only the Welsh Conservatives voted against the dreaded tourism tax, because we know that on every measure it will harm Welsh tourism. We have the ideal case study in the form of Rachel Reeves' tax policy.
We know that her jobs tax, coupled with her family farms tax and general hostility to business has shrunk the economy, harmed investor confidence, and increased unemployment (which is up by 50% in Wales since July of last year). Welsh Labour's toxic tourism tax will do the same to Wales.
The tourism industry is already having to deal with the harshest business rates in Britain as well as Labour's decision to cut relief for the retail, hospitality and leisure sector. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here.
The Welsh Conservatives will scrap business rates altogether for small businesses, unlocking our high streets in tourism hotspots and across Wales and don't forget, as with many of Labour's wrongheaded decisions, their so-called 'Visitor Accommodation Levy' Bill could not have progressed without the support of Plaid Cymru, who provided full support throughout for this punitive policy.
Who would want to take on the risk of setting up a tourism business here in Wales, with an extra tax on accommodation on its way? £1.30 per person, per night, may not be much for well-paid politicians in Cardiff Bay, but is a considerable cost for price-sensitive visitors looking for an affordable family holiday in Wales. In fact, a family on holiday in a self-catering unit for a week at £300 could be charged nearly £60 in tourism tax, a 20% increase in the cost of their holiday!
Be in no doubt, the tourism tax will hit the poorest the hardest.
Crucially, unlike what Labour and Plaid like to tell us, this isn't just a 'small' £1.30 charge. That is the minimum levy that will be imposed, because the Bill actually paves the way for councils to add an unlimited uncapped premium per night on top.
The Visitor Levy Bill's explanatory memorandum is clear. It states that Labour Ministers have the ability 'to make regulations specifying the maximum amount of the premium which may be added by a principal council.'
You can be sure that nationalist-run councils will be itching to pull that lever again and again to deter even more visitors, with no thought for their local economies. On top of all of this, VAT is applied only after this tax is applied, inflating those costs for tourists further still.
The sheer size of the hit to the Welsh economy will be enormous. Labour's own figures, cited in their explanatory memorandum, point to an up to £576 million cost over the next decade.
Even the most optimistic scenario is a net economic loss of tens of millions of pounds, far from the growth delivery agenda promised by Keir Starmer.
The tourism tax will also be a disaster for jobs. The same economic analysis from Cardiff University warns of up to 730 job losses per year. This kind of annual hit to a sector of the economy supporting 1-in-7 jobs would be absolutely devastating for Wales.
The Wales Tourism Alliance, The Professional Association of Self Caterers and UK Hospitality, key representatives of the tourism sector, have all voiced their opposition to Labour's Tourism Tax.
Their concerns are numerous, but include a lack of obligation being placed on local authorities to allocate the funding to tourism-related initiatives, something that was promised by Labour.
Regardless, councils will inevitably use any new cash, even if it is earmarked to improve the local offer, as a replacement for the funding already being used for that purpose.
This will mean that the money will simply be siphoned off, rendering the Tourism Tax just another revenue raiser for day-to-day council spending, rather than the extra investment in facilities to attract visitors.
For all of these reasons, the Welsh Conservatives are reaffirming our commitment to axing the toxic tourism tax. If a Welsh Conservative Government is elected next year, we will even be able to do so before the tax comes into force and prevent much of the damage that this policy will inflict.
And we will go even further, because on top of this new tax, self-catering accommodation businesses are also been forced to pay council tax premiums of up to 200% if they don't meet the Welsh Labour Government's arbitrary 182-day minimum occupancy threshold, regardless of those businesses' legitimate attempts to meet it.
That is why the Welsh Conservatives are also committed to reducing that threshold to 105 days, the HMRC definition of a self-catering accommodation business, to save small businesses from having to face that unfair cliff edge.
Ahead of the 2026 Senedd election, the Welsh Conservatives will be offering a positive vision to fix Wales, one that supports the tourism sector and helps it to thrive, not one that hinders it.
Our party is clear, with a clapped out Labour government, on its way out of office, we have a unique opportunity to change Wales for the better.
Creating new taxes and regulations is the Labour way, the Plaid Cymru way and the Lib Dem way. But we Welsh Conservatives are a low tax party that is unashamedly pro-business, pro-jobs and pro-tourism.
Eliminating barriers and unlocking growth in the economy is our Welsh Conservative way. It's time to axe the Tourism Tax and it's time to fix Wales.