Visitor Levy: a welcome source of revenue for cash-strapped councils? “Not really!” say councillors and council managers

CLA Cymru Policy and Engagement Advisor, Emily Church, explains some surprising feedback given to the Welsh Government in its consultation meetings so far.
Holiday cottages

Proposed beneficiaries of the Welsh Government’s Visitor Levy demonstrated scepticism bordering on outright opposition this week. At a formal consultation event held within sight of the Government’s offices in Cardiff, representatives of local authorities – both elected members and professional managers - expressed their concerns that the proposed tourist tax is wrongly targeted, will be difficult to collect and enforce, will be costly to administer and generate low returns. Moreover some representatives are cynical that the levy is proposed as a source of resource as future budgets will be slashed. We even heard that the tax might be illegal – causing authorities who do not adopt the tax by default to be contravening subsidy controls.

We expect the tourist industry to oppose the levy. The Wales Tourism Alliance (WTA) and the Professional Association of Self Caterers (PASC) and others have expressed their concerns that the tax will penalise Welsh tourist operators and could be “the last straw” for small holiday let business already facing the 182 day threshold to avoid premium Council Tax bills of up to 300 per cent. And what sort of message does a tourist tax give to the visitors the Welsh tourist industry urgently needs to rebuild resilience following the lockdowns?

We’ve attended two of the four consultation events. The first, in Portmeirion, demonstrated little more appetite for the levy. We’ll be present at the third event in Llandrindod Wells and a fourth in St Brides. The Welsh Government will run a fourth event online – if the poor officials can stomach it. As Treasury or Finance specialists, one assumes they’re quite accustomed to robust feedback.

The Visitor Levy was mentioned in the Welsh Labour manifesto, so the Government – supported by the Plaid Cymru Cooperation agreement – feels that the people have already given the proposal their blessing at the ballot box. Speaking at the Cardiff consultation event the First Minister presented six reasons why he’s going ahead. Firstly he said the idea was put to him not by a policy department – or even the tax department – but in a forum, as a “peoples’ idea.” Levies like this have been successfully introduced in many parts of the world. “It’s hard to find an example of a place which has embarked on it and changed its’ mind.” The leader in Amsterdam told him “it’s the best thing we’ve ever done.” Thirdly it’s gathering momentum – Scotland will have one, and many English regional mayors and local authorities are looking at it. Fourthly, as a permissive power for local authorities, he feels the Welsh Government are providing councils with vital tools they need to deliver essential services. Finally he added that it’s clear to everybody that tourists have an impact on the places they go to and the communities that live there. “This is not to undermine the visitor economy but to enhance it.” Following the First Minister on the podium, Plaid’s leader Adam Price spoke of the attraction of the Welsh culture to our tourists – and the need to invest in it to sustain it.

“Visitors who stay overnight are contributing to the economy – they’re not the problem:” these words came from a local authority business development manager. His focus is on day-visitors in perpetual search of parking spaces, picnic areas and the loo. The authority whose boundaries include The Celtic Manor was equally sceptical. We heard “The model’s based on the formal front (hotel reception) desk where it’s clear who or how many visitors are staying. Rural cottage holiday lets are often let to families or groups where there’s quite a lot of coming-and-going.”

Most concerning of all was the observation from a senior council manager that despite the commitment to ring-fence Visitor Levy returns to be spent on local tourism, “there’ll be a bun-fight on need: councils must sustain essential services – potholes, street cleansing and lighting and bins-collections will win through.” Tourists benefit from these services, fair enough; but is this an investment into the tourist economy?

There are circumstances when the local authority representatives feel the Visitor Levy could work. Applied consistently in all 22 Welsh authorities, with an equivalent levy in all parts of the UK, a central collection and distribution-point, levied at a level which is fair and does not influence the market. Then those who ought to benefit from the proposal might give it more of a welcome.