Tom Giffard MS is shadow minister for culture, tourism and sport
The Welsh Labor administration is introducing a new tax on jobs: their so-called visitor tax. This would be an unwanted and unnecessary punitive tax on the tourism industry. This is a harbinger of how Labor will govern from Westminster. Their approach is not to develop the tourism sector, but to tax it into oblivion.
Workers are paying attention to the implementation of this tax. With inflation rising, this could further undermine Wales’ position as an attractive tourist destination. 1 in 7 jobs in Wales depend on tourism. That’s about 200,000 livelihoods that will be put at risk by this decision. Imagine this policy rolled out across the UK: our country’s reputation as a worthwhile place to visit has declined.
The Welsh Conservatives are leading the charge against this self-destructive act. The tourism industry is opposed to the proposal by the Wales Tourism Alliance to UKHospitality. Labor will refer to other countries. What they fail to mention is that in many of these places that do apply a tourist tax to hotel bills, there is no or much lower VAT on hotels.
Venice decided to introduce a tourist tax to discourage tourists from visiting because they were worried about the number of tourists. Bhutan recently raised its tourism tax with the same rationale. Their decisions make it clear that these taxes are used to deter rather than encourage visitors to an area.
Labour’s own consultation paper admitted that “some destinations use visitor levies as a mechanism to limit or reduce visitor numbers”. Their partial assessment of the regulatory impact said: “A reduction in competitiveness is possible.” Wales does not suffer from over-tourism. This is an important sector of the Welsh economy and should be taxed, encouraged to be destroyed.
In their assessment, they cite a study that clearly states the case for tax cuts to support the sector – contradicting their already flawed reasoning. Given the intensity of concern about the imminent introduction of this new tax, the lack of clarity from the Labor Government is unfortunate.
We are even left with speculation about how the tax will be implemented. There is no guarantee that this tax will see any improvement in tourism offerings in local communities. The proceeds are likely to be used by councils to fund other programs such as free school meals. We must not forget that the ‘introduction of tourism levies’ was a key tenet of the partnership agreement between Labor and Plaid.
Councils have already said it costs more to implement school meal policies than they are allocated. This leaves Wales in the odd position that we will be taxing one of our most valuable industries to feed the children of millionaires. The consultation itself is pointless, costs the taxpayers of Wales and distracts from voters’ priorities.
The update to the Senedd in the consultation was sad. Full of oxymorons, we were told the contribution would be small, but the amount would be chosen by councils with no hard cap proposed. Mark Drakeford even stated that the tax will apply not only to those who are on holiday in Wales, but also to those who visit Wales for other reasons. However, it is still not clear what this will look like.
We estimate that this tax will cost families visiting Wes an extra £75, if European countries that impose such a tax are anything to go by. Labor are being completely disingenuous when they try to claim that this price tag won’t stop visitors from flocking to Wales during a cost of living crisis.
A recent report by Visit Wales highlighted the many benefits of holidaying in Wales. Our country is in a fantastic position to be a relatively inexpensive place to visit with many outstanding natural beauties. Those surveyed ranked value for money as the top factor to consider when deciding whether to visit.
Around 3 in 5 of the UK holiday market have taken a short break or holiday in Wales before and intend to do so again, according to the survey. This represents a huge potential market that would only avoid the additional costs incurred by such a regressive duty. Labour’s determination to continue this policy over time is a sign of their arrogant entitlement based on their continued dominance.
This is another example of their nail-biting politics, drawing inspiration from other countries with different situations and needs, we need ourselves to eliminate the constant stream of disastrous policies to chase the headlines. Labor is effectively using Wales for bad ideas. This is why Sir Keir Starmer does not support such policies at a national level.
The policy is emblematic of the Labor Party, which routinely engages in economic self-harm in order to virtue signal. In the last quarter of a century, they found themselves in a constant cycle of introducing new taxes and increasing existing taxes to fund fantastic programs such as the UBI ‘pilot’, countless diktats and minor rule changes.
Unfortunately, the decision comes as no surprise to an administration that has chosen to spend £100m on more politicians in Cardiff Bay as Wales faces poor education results and significant NHS backlogs. They should work on supporting jobs in the tourism sector, not creating new jobs for politicians.
Labour’s consistent mismanagement of the Welsh economy should not go unnoticed. Wales has some of the lightest pay packages in the UK, as a direct result of Labor steering our economic direction. If Labor wins power at UK level, be sure these problems will reach the doorsteps of households 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 promotion of the Islingtonian to number 10 and stood on a reckless manifesto which the British public rightly rejected. Drakeford’s insistence on calling his latest disastrous diktat a “guest tax” does not disguise the fact that it is a tax harmful to Welsh affairs and a tax on pleasure.
The tourism tax is the wrong policy at the wrong time and a testament to how invulnerable a tired Labor establishment is in Cardiff Bay.