National Assembly for Wales

Only that I've got a caravan.

Oh, Peter has a caravan. So, there we are. Okay, we'll note that. Diolch, Peter.

We'll move on to the papers to note. Is everybody happy to note the papers that we have there and the minutes from 23 October and 7 November? Great. Thank you very much.

Well, this morning, we've got the first evidence session on the Visitor Accommodation (Register and Levy) Etc. (Wales) Bill. That's a mouthful, but there we are. Thank you for coming in this morning. We've got the Cabinet Secretary with us and officials, and I wonder if you'd introduce yourselves for the record, please. Mark.

So, the Bill was introduced on 25 November and this is, obviously, our first evidence session. So, thank you very much for making the time to come and see us, and I think we'll also see you in a different guise in a week's time as well, talking about the budget, but we'll concentrate more on this Bill this morning. I think we've got about two hours. We've got a lot of questions, so, for everybody, brevity would be useful this morning, as best we can.

But I'd like to start this morning to explore the reasons for introducing the legislation and the impact of the Welsh Government policy on the tourist sector, the pilot voluntary registration scheme for visitor accommodation provision, and the consultation on the discretionary visitor levy. So, just a broad question to start with, Cabinet Secretary: why is this legislation needed, and given the challenges that the tourism sector has gone through in the past years—four years especially—why is now the right time to introduce it?

Diolch yn fawr, Cadeirydd. So, the legislation is needed to give effect to commitments that were made in the manifesto of my party at the last election, that were contained in the programme for government that formed part of the co-operation agreement. It contains a modest but proportionate measure to charge a small addition to the bill of people visiting accommodation in Wales, where that modest addition will be retained and reinvested in the circumstances that make tourism a success in the communities that choose to take it up. The Bill provides a permissive power. It is for local authorities to decide in their circumstances whether this is a useful tool in their armoury in making the tourism industry successful and sustainable for the future. 

Why now? Well, we are more than halfway through the journey of this idea. In fact, you could say that the genesis of the idea goes back as far as 2009, because it's there in the Gerry Holtham report that was commissioned during the One Wales Government. Now, at that point, we didn't have the power to do it. Now, following the 2017 Act that provided a mechanism to draw down powers to introduce new taxes in Wales—not that we are using those powers, by the way, for this Bill, but, given those new powers—we held a conversation with people in Wales as to how those powers might be used, and one of the ideas that was proposed back then in 2017 was the idea of a tourism levy. For any local authority area that chooses to use the provisions in the Bill, the earliest they could be used is 2027. So, this is not an idea that has been sprung on anybody, nor could it be accused of being rushed through the process—it will be a full decade between the genesis of the idea and its practical application—and now is the point at which we have the legislative opportunity to turn those commitments into practical action on the ground.

So, what assessment have you made of the impact of this on the ground? And because it's a permissive taxation for local government, what conversations have been had as to who's likely to take that up and who's not and the geographical spread of that, and whether or not that would become confusing for people or not—just your thoughts on that?

Well, we have preliminary information from local authorities. Understandably, local authorities in Wales, many of them have been waiting to see the colour of our money, really, to see the detail of the Bill itself, how it would operate, before they make decisions as to whether or not they would wish to take up the power. Those places that have shown the greatest interest in it, unsurprisingly, are those places that have the largest numbers of visitors, and that isn't simply, as you might first think, the western edges of Wales, where we have large numbers of summer visitors and so on, but a city like Cardiff, which has thousands and thousands of visitors who come here all the year round and for different sorts of purposes. So, the indications we've had of the greatest interest are in those places where the impact of tourism itself is greatest. I do not anticipate that every local authority in Wales will want to use this power in the first flush of its use; I do think it's plausible to suggest that, as people see it operate, get more familiar with the idea, see the benefits it can bring for the industry in those localities, more local authorities will take up the offer as they become more familiar with it.

And the interplay between this levy and then things like the second home council tax premium, how do you see that affecting, potentially, the tourist industry in some of these places that have taken that option up as well?

Well, Chair, I recognise that there have been a number of strands in Welsh Government policy making over the last five years that have had an impact in the field of tourism. They're often designed for particular purposes; the second home premium is designed to protect those communities or to be part of a suite of measures designed to protect those communities where the number of second homes threatens to alter the character of that area, and threatens to deny opportunities to people who live locally to continue to live locally.

Local authorities in Wales have, I think, taken up the opportunity relatively modestly; in fact not every local authority in Wales charges a second home premium at all and, in some areas, including some areas where you might think that the issue would be a real one, it's at 50 per cent, and the additional powers that we've offered local authorities to go above the original 100 per cent premium have only been taken up by two local authorities in Wales. These, again, are permissive powers for local authorities, and I think you can see from that that local authorities have used those powers in a reasonable and responsible way.

On the other hand, there have been things in the last few years that have been designed particularly to assist the tourism sector. In this decade, direct help to the tourism sector by the Welsh Government comes to about £100 million, and if you take into account the additional reliefs offered to the industry as a result of the COVID experience and the recovery from that, that's £1 billion-worth in this decade. We're not halfway through the decade. In this decade alone so far, £1 billion-worth of taxpayer assistance has been offered to the sector. So, the sector has, I agree, been at the centre of some testing times because of the pandemic and so on, but this is a measure designed to strengthen the sector, to make sure that the things that make places attractive to visitors go on being attractive to those visitors in the future, by collecting that very modest contribution from people to take account of the impact that their visit makes on the place that they are visiting.

Thank you for that. Moving on to the reason for an overnight charge, as opposed to a day charge, could you just talk about the reason behind that?

It is essentially practical and pragmatic. If you are charging people who are staying overnight, you know who they are, you know where they are and it's possible to add that small amount to their bill. If you were in Saundersfoot, how would you know whether somebody was a visitor, if they were just there for the day, or whether they lived in Saundersfoot and were on the beach? In a practical sense, it is very hard, it turns out, to be able to find a mechanism by which you can charge day visitors. That is not to say that day visitors don't make an impact on the area that they're travelling to, but where this has been attempted around the world—there are examples where it has been attempted—it turns out, in that simply practical way, to be very difficult indeed to find a mechanism by which you can identify the people who want to make a contribution and the people who live there all the time.

Okay. Thank you very much. Moving on to the register and establishing the voluntary registration scheme that was done in Dwyfor to draw lessons to inform the operation of the statutory scheme, was the voluntary scheme established and how did that inform the Bill?

In the end, my understanding is that the scheme didn't go forward. It was overtaken by the work on this Bill, and the decision was made some time ago that it was better to concentrate resources on this scheme and that there would have been little time for learning from a voluntary register in any case. So, the idea, which was part of the original intention back in 2022, in practice, didn't get taken forward.

Learning from practice, that wasn't done, but Scotland have legislated or are looking to. What learnings, as a Bill team, have you had from the experience in Scotland, and the differences that you've gone for, as opposed to Scotland? Maybe talk through some of those major differences.

Thank you, Chair. I'll probably ask Anna to give you some of the more practical examples, but just to say that the team here met with the Scottish team working on their legislation every month during the passage of the Visitor Levy (Scotland) Act 2024. I had a meeting myself with the Minister for finance in the Scottish Government in October. This was one of the items on the agenda that we talked about, learning from their experience, they being interested in what we are doing. I'm hopeful, but it's not completely settled, that I might be able to go to Scotland in January and, if I do, then one of the things that I'm hoping to be able to do when I'm there is to meet some of the people who were involved in the design and implementation of the Scottish levy, and particularly to meet some people in Edinburgh about their plans, because they're the first local authority in Scotland that looks likely to use the powers that have been made available there. So, we've had those conversations already and intend to continue them in the new year. But Anna will probably just be able to give us some practical examples of where we have learnt from that Scottish experience, both things that we are doing positively as a result of what we've learnt and some things where we decided that what was happening in Scotland wasn't going to be the right thing for us.

Yes, happy to. There are a few things that we did very differently from Scotland. So, Scotland is based on a percentage rate, which is not how we've done it here; we've got a per-person, per-night rate. There's also a variation in Scotland in terms of who is administering it. So, in Scotland, the local authorities will be responsible for administering the levy, whereas we have done that through the Welsh Revenue Authority, to have a centralised collection and administration of the levy. And there are a few reasons, I think, why we've gone in those different directions. On the percentage, the deliberate choice was to try and make sure that it was as simple as possible for three parts of it: for the visitors themselves, so that they can understand what they will be paying; for the visitor accommodation provider, so that they can easily work out how much they are owed to the Welsh Revenue Authority; and also for compliance and administration of the levy itself, as it's much more simple to do it as a per-person, per-night. In terms of the central collection, part of our discussion in our consultation with local authorities was about how to administer it, and most local authorities agreed that it would be better to have a central collection for efficiency, but also for simplicity and consistency across Wales. And so, that was the decision that we made at that point.

There are lots of things that we did learn positively, also, from Scotland. One of the discussions that we had with them was about how they were managing some exemptions. So, for example, carers—one of the things that we have included in the Bill is how to support people who are travelling with a carer to make sure that we can ensure fairness in the approach there, and so we did learn from Scotland there and we've adopted that in our Bill, and also even including who are the liable persons, and so some of that is included in some of the technical work. It's also been just a really useful sharing discussion. As they put together the policy work, we were working with them and as we were learning through ours. But also, I suppose, the variation of having a devolved, you know, thinking through these things for our own local areas—. We are different from Scotland, and the tourism markets are different and the local authority needs are different, and that is, I think, partly, how you can see that there's a very different approach, in some ways.

Thank you for that overview. I'm sure we'll come on to why the percentage. We'll definitely come on to those sorts of things later, so I'm not going to go after those now, and I know colleagues have got other questions. Just finally from me in this section, before I come to Rhianon, you've decided, similar to the second home extra premium, to allow it to be discretionary for local authorities to raise it as and when they decide to. Why not do it as a national scheme and pool the resources and direct it centrally?

I think it's because the nature of tourism varies so significantly from one part of Wales to another. In some parts of Wales, obviously the tourism economy is a dominant part of the local economy, and in other local authorities in Wales, it's a very much smaller part of that local economy, and the nature of tourism varies between local authorities, as well. It is an overarching policy of the Welsh Government to try to strengthen the autonomy of local authorities in Wales; devolution should not stop at Cardiff. The idea is to try and strengthen the powers that local authorities have, to regard them as trusted partners, with their own democratic mandates, capable of making those decisions better than we can because they know their local needs and circumstances in a greater granularity and with a finer sense of what will fit in their circumstances. That was a question that we explored in the very beginning of the visitor levy, and I felt from the very beginning that the weight of argument was very clearly on the side of making this a power for local authorities to use, rather than thinking that one decision for the whole of Wales was the best way to provide a power, given the varied nature of the industry.

Using that logic, why have it just as a power for the whole of a local authority, and not to target at a ward level rather than a local authority level, because of the geographical spread in some of the council areas?

So, there's a trade-off, which we'll probably rehearse a number of times in the Bill, between fine tuning on the one hand and simplicity on the other. Chair, I think you asked me the question at the start as to whether or not the fact that different local authorities will make different decisions might be confusing for the visitor. Would they know if they were in a local authority where the visitor levy applied or not? I think, on a local authority basis, that is easily enough overcomable. If, as you moved from one part of a local authority to another, rates could come and go, I think that does begin to erode the simplicity of the idea, because we want the idea to be simple for the user to understand, for the visitor to understand and for the administration to be able to deal with it. A sub-local authority ability to vary the application seemed to me to erode those underpinning principles to a point where you are beginning to lose some of the underpinning principles of the Bill.

Okay. Diolch yn fawr. I'll bring Rhianon in at that point. Diolch, Rhianon.

Diolch, Chair, and Cabinet Secretary. In regard to moving on to the types of visitor accommodation, and the reasons for the visitor accommodation provider being an occupier, section 2(1) of the Bill includes a list of the types of visitor accommodation for which the levy is payable on overnight stays. Could you describe, Cabinet Secretary, the processes used to develop that list, briefly, and were there any other types of accommodation that were thought of being included, as well?

I thank Rhianon for that, Chair. So, the process has essentially been an iterative one in which we have been discussing throughout the Bill, from the start of policy development right through to finalising the Bill, a conversation with those on the ground about the nature of the different types of tourism accommodation, and the list at section 2(1) provides what we think is the most comprehensive list of types of accommodation that you would expect to see in a list of accommodation of that sort. We want to specify the types of accommodation to make it clear to users and providers of visitor accommodation whether they are needed to register and, therefore, to become liable for the levy when local authorities take it up, but, equally, for people to know that they don't need to register and that the levy requirements would not, therefore, apply to them.

I don't think we are aware of any other types of accommodation that we would have included on the list at this stage, but you will know that there is a power in the Bill to be able to amend the list, and that is because of the dynamic nature of the sector. There are types of accommodation available today that—. I'm not sure how many of us would have heard the word 'glamping' maybe even 10 years ago, and yurts. It's a dynamic industry in which some older forms of accommodation may no longer be used in the way they once were, and new forms of accommodation are being available. The list is the most comprehensive and up-to-date list that we have been able to develop, but we have a power to be able to keep it up to date in the future.

Thank you for that. And in terms of the 31-night classification as the short term, can there be some explanation as to how that was defined in terms of determining it as a short-term basis for a 31-night stay or less?

Thank you, Chair. What we have done is to rely on definitions that are already well-known and are in practical use. There are three that we drew on particularly. Planning legislation in Wales—the C6 planning class—defines use of a dwelling house for commercial short-term letting as one being no longer than 31 days for each period of occupation. The Valuation Office Agency, the VOA, uses 28 nights as a benchmark when assessing whether or not a property has been let on a long-term basis. And the UK Government, in a regime that doesn't get used anymore, but when it did, the furnished holiday letting regime also used 31 days as its benchmark for whether something was a short-term let or not.

We wanted to make a distinction between short-term and long-term lets because some lets are not visitor accommodation. It's particularly true, for example, of a city like Cardiff, where you have quite a lot of people who live in the city during the working week, but whose homes are elsewhere. So, they rent somewhere Monday to Friday and they do that every week. Now, cumulatively that quite quickly adds up to more than 31 days. The Bill isn't designed to capture people who are not visitors in that sense, they are staying somewhere for working purposes. And 31 days is a figure that's known in other parts of the relevant sector. We've adopted that.

Sorry, Rhianon. On that point, for example, a Senedd Member representing North Wales comes down on a Tuesday and a Wednesday—well, probably comes down on a Monday, goes back on a Thursday evening—doesn't necessarily have a flat here, but stays in a hotel or a bed and breakfast, which is permitted under the rules, but they might stay in different ones every week. So, that accommodation would be liable to pay.

Yes, if people are moving around in different places.

Even though they're here for work and not visiting.

Yes. If they were in the same place and it accumulated to 31 days in that way, then they wouldn't. But if people are staying—

But I suppose the contract would have to be—. There would be a contract for a set number of nights every week for a year, for example. That would constitute not a short term. And that wouldn't be liable.

Yes, exactly.

The 31 nights is over the contract period, so it doesn't have to be consecutive. But as long as it's over that contract period in the same accommodation.

Peter.

If a Senedd Member—I’m using a Senedd Member because it’s the obvious one to use—didn't have regular rented accommodation in the town and used a Premier Inn for several nights a week, they would obviously have to pay it, and is there a way then that they claim it back? How does that happen? I don't know if any Members do actually just use hotels.

I think it's a hypothetical. 

If people are just using hotels—. It's irrelevant, it doesn't really matter, really. 

If, as part of their booking, they say, ‘I'm going to be here Monday and Tuesday this week, Monday and Tuesday next week’, and if they book it and it adds up, then it wouldn't be part of it. Because that's part of their contract that they've made with that Premier Inn. But if they do it on an ad hoc basis, then they would be captured.

But the provider would need to be aware that that is exempt.

Yes, because they would know—

So, there would be work that would need to be done for those, to inform people of that exemption, otherwise they'd be paying it— 

Exactly. And the guidance—

—and not be aware that it's there. So, that would be in guidance.

Yes. 

So, forget Senedd Members, but anybody who has that working relationship, they have to draft some sort of contract with wherever they're staying at, and there would be models or templates or something to be able to do that.

And it doesn't have to be a long, legal contract, not that there's anything wrong with a legal contract. [Laughter.] It would just be a very clear agreement that this is what the agreement is and that they're staying beyond the 31 nights.

So, the provider would be able to show to the WRA, 'I'm not putting this on my return because this is the situation.' 

That's exactly right. 

So, that's something that we probably need to pick up with the WRA when it comes to administrating this, to make sure that that is captured within that process. Thank you for that. Rhianon, back to you. 

Thank you, Chair. Section 3(2)(c) of the Bill defines a visitor accommodation provider by reference to being an occupier of the premises at which the visitor accommodation is provided. So, in a similar vein, what are the reasons for including this in the definition?

Chair, I'll probably ask Nick to give you the more detailed legal explanation, but this is one of the parts of the Bill where we did learn from the process in Scotland and how they had narrowed down liable persons—people liable to pay the visitor levy—to the occupier of the premises. Now, occupier in this sense—this is why you need a proper lawyer to tell you this, not me—occupier in this sense does not mean necessarily physical occupation. It is the person—. It's a legal term and it means the person who exercises control over the premises, and that is the legal sense in which the word 'occupier' is used in this Bill. But Nick will give you a more proper explanation. 

Nick. 

Thank you, Cabinet Secretary. Yes, it's trying to find a balance in terms of how the Bill was drafted. So, the draughters and the lawyers working on it were looking for a way to provide as much certainty as we possibly could to accommodation providers and to visitors, but at the same time enabling the Bill to function in a way that would allow for some flexibility. It's quite deliberate that the term 'occupier' hasn't been defined in the Bill. The idea is that it can mean and, in terms of how the Bill works and the mechanics of the Bill, it will need to mean different things in different circumstances.

So, as the Cabinet Secretary said, in some instances it will be very clear that, for example, if you stay in a small bed and breakfast, that may be run by someone who lives on the premises—they are occupying the premises. You contrast that, perhaps, with the example we were talking about of the Premier Inn, where you have a large hotel, that will be occupied likely under a lease by the person providing the hotel accommodation. They would likewise be an occupier for these purposes. 

So, it's trying to find a mechanism that will capture that array of different accommodation providers and do so in a fairly neat way. We recognise, obviously, in doing that, that that term being undefined will be open to interpretation, will be open to potential challenge, I suppose, and that will be something that we will have to monitor as the Bill beds in and people become used to using that legislation. But as an attempt to draft it, this was the mechanism that we felt delivered the policy objectives in the clearest way and provided as much legal certainty as we could. 

Thank you for that. 

Okay, thank you very much. I'm going to move on now to regulation-making powers in relation to the register. Part 2 of the Bill discusses provisions for a visitor accommodation provider register. What are the anticipated timescales for implementing this and will that registration be phased across Wales?

Chair, we're looking to commence registration in 2026. We will focus in the first instance on those local authority areas that intend to introduce the visitor levy, and thereafter we will phase registration across Wales. So, starting 2026, focusing on those areas most likely, with the most declared intention to implement the visitor levy, and then to roll the registration process out to the rest of Wales.

Is there a date by which a local authority would need to indicate that they're likely to use this, or is it because of the consultation that you've been doing that you know who you're going to start with? 

We've got a fair idea who we're going to start with already. I don't think a local authority has to give a date. You could decide in 10 years' time that you want to opt in to the process.

Okay. Thank you. Diolch.

Part of the value of having the register is it will also help local authorities make a determination whether it makes sense for them to have the visitor levy. So, if they know the data, and they know the number of visitor accommodation providers that are registered in their local authority, that could be an enabler for them to determine whether it makes sense for them to go through a consultation process and have the levy.

And will you start with those, but that will be an ongoing, rolling process?

Yes.

Okay. Diolch, Rhianon.

Thank you. This is a slightly longer winded question, so I'll try and rephrase. In terms of the local authorities' ability to guesstimate the amounts that they feel they can raise from the levy, before the data regarding the number and types of visitor accommodation providers has been published, what sort of gauge can local authorities work to in terms of assessing where they feel they'll be, or is it just a matter of waiting and seeing, if that makes sense?

It does. Thank you, Rhianon. I think you've asked a question that does expose the fact that the state of data in this area is not as reliable as anybody would like it to be. And of course, the register, as Anna says, is the solution to that problem. But the fact that the sources of data are not as good as we would like them to be doesn't mean that there aren't any sources of data. There are probably four different sources of data that we used ourselves in the explanatory memorandum and the regulatory impact assessment, which the committee will have had. And a local authority trying to anticipate whether or not it would want to use the powers here could use those same sources of evidence and probably copy the methodology that's used in the RIA if they wanted to make such an assessment.

So, the four main sources of data that you could use, prior to having the register, include: the bedstock survey, which the Welsh Government carries out; there is the Great Britain tourism survey; there is the international passenger survey; and, these days, there is Lighthouse Intelligence. So, Lighthouse is one of those organisations that scrapes data from the four major short-term rental platforms: Airbnb, Booking.com, Vrbo and Tripadvisor. By scraping the data from that, it also provides a source of data about how many people visit, to what sorts of places, for what sort of time, and so on. So, while none of those sources of data by themselves would give any local authority a completely comprehensive or reliable set of data from which to make a decision, it's probably good enough for you to be able to supplement your local knowledge as to whether or not this is a form of revenue that's going to be worth you pursuing in future. Once you've got the register, then you'll be on much firmer ground.

On that note, with the data that you've already got, is that where a lot of the information in the RIA comes from, from that best guess, and the scraping of data, and that aspect?

We mostly use the bedstock data, but, yes, we've tried to pull in as much data from other sources as possible, to get as round a picture. But you'll see in the EM and the RIA, and the other documents, that there are ranges that we've given, because I think part of it is the uncertainty of some of the data.

Okay. Peter.

On data—excuse me if I'm going off piste a bit—do the councils really know the impact of the pressure that additional tourism is having on them, to determine how much they need to raise? So, do they know what their problem is? Or is there not really a problem, but there's an opportunity, through putting a levy in, to just enhance the offer that the council has? Because that has to be part of the rationale of why it's even being considered: is it a money raiser, or is there a real problem?

Well, I think local authorities do make their own assessments of the impact of tourism in their areas and the services that they try to provide to meet those needs. So, just to give two or three examples, in Pembrokeshire—. I once read, Chair, that Pembrokeshire has more miles of roads than the country of Belgium, and it has to maintain all those roads, and maintain those roads to all those small beaches and places that people visit. It has more public conveniences than any other local authority in Wales, and that's, again, because, if you're visiting a beach, then a visitor will expect there to be—well, needs to be able to rely on the fact that there will be—a certain level of visitor facilities. And over the years, local authorities have moved to improve those sorts of services. So, again, if you are on a beach in Pembrokeshire now—20 years ago, you wouldn't have had lifeguards there in the summer season, but now you would routinely expect to see that. You wouldn't have seen dog wardens, but, because lots and lots of beaches now are dog free in the height of the summer, the local authority has to provide a service to enforce all of that. I think local authorities do have a pretty fine-grained local sense of where those pressures come and what it costs them to meet them. In Gwynedd, we very regularly see, don't we, during the summer months, accounts of pressures on car parks, people parking in places that are dangerous, abandoning cars, because they don't have the facilities to cope with the number of visitors who come to those hotspot parts of the tourism industry.

I suppose, Chair, whilst there are additional recognised costs of these people coming to the area, the reason they're being enticed to the area is also being stimulated through economic development, and the councils want to create economic benefit, so there's already a benefit that's coming that needs to be factored in. So, it looks like there is a shortfall between the incurred costs and the benefit. So, I get all of what you're saying, Cabinet Secretary; I was just trying to get to understand this data issue. I'm still anxious this is seen as a money-raising exercise more than there's a real need. But I think you've explained it really well, actually, for Pembrokeshire, how they would have additional costs as a result of that wider offer.

And there's been a 40 per cent fall in the direct expenditure of local authorities on tourism services in the last decade. Well, you will know better than anybody that, in an era of austerity, councils have to retreat to their statutory obligations, and where it's discretionary spend, that carries the burden of where reductions come. So, this is an opportunity for those local authorities, who have to provide the most, to gather those small contributions from people who visit.

Okay. Diolch. Rhianon.

Diolch, Chair. Very briefly, before I move on to my next question, in terms of local authorities' decisions and determinations about whether to go forward in this direction or otherwise, I mean, how clear is the—? Is it possible, once committed to that register and moving forward on a policy basis in a local authority, that local authorities are able to exit the visitor levy, or once you're in, does that mean you're in for a certain period of time? I don't know if there's any clarity on that.

No, there is an exit process as well as an entry process, Chair. So, a local authority might decide that, actually, it doesn't work for them having tried it, and they would be able to withdraw from the use of it.

Okay, thank you. Section 4(5)—

Rhianon, just a second—sorry, Nick.

I was just going to say, if it helps, sections 25 and 26 will provide that mechanism that the Cabinet Secretary mentions.

Thank you.

Thank you. I can't actually see the gallery of the room, so apologies, Chair.

That's fine.

I'm going to move on. Section 4(5) of the Bill provides Welsh Ministers with a regulation-making power to add, vary or remove a description of the information required on that register. How do you anticipate that power being utilised, please?

Well, it's essentially a power to allow the register to be kept up to date with the changing nature of the industry. Chair, there are a number of powers in the Bill designed to do exactly that. Data from the register is intended to serve a number of purposes: supporting the collection management of the visitor levy; supporting decision making about whether or not to introduce a visitor levy; and to provide the foundation for any future licensing scheme. So, this power, particularly, gives us the flexibility needed to make sure that the information that the register will provide will be useful for a licensing scheme that we intend to introduce later in the Senedd term. What we don't want is people having to register twice—once on the register and once for the licensing scheme. So, this is a power that will help us to make sure that the register is useful for both purposes—the visitor levy, but also for the licensing scheme.

Talking about the usefulness of the register, in the Bill, it says you may publish it, or the Ministers may publish. I think in response to Luke Fletcher, you said it will be published and it will be shared. Which one is it going to be? Is it 'may', but you are going to publish and share, or does an amendment need to be made to make it a 'you will publish'?

It's definitely the intention that the register will be a public register. There are some aspects of people's own personal information that you may not wish to publish for those reasons, but it is the firm intention that the register will be a publicly available document.

And that, then, obviously within data protection rules and that aspect, would be shared also with people who are making decisions, similar to local authorities, because the data will be held centrally by Welsh Government, so—

The WRA.

The WRA. So, making that available is probably—. To get the benefits from having the register, it can't be kept hidden, if you like.

No, no, it is always the intention that the register will be a useful policy tool for people making those sorts of decisions. The word 'may' I think is probably there because there are some aspects of information collected for the purpose of the register that you wouldn't want to make public.

But it's your intention to publish.

It's the intention to publish the register itself. As I say, I can't guarantee that every single detail that people provide will be publicly available, but the register is intended to be a public document because that's how you derive the benefits of it.

Thank you. Diolch, Rhianon.

Thank you. Can it be explained why was it necessary in section 5(3) to give Welsh Ministers the power to make regulations to exempt certain descriptions of visitor accommodation provider?

Chair, it's because the nature of visitor accommodation can change, and therefore you need a power to be able to reflect that. So, I can give a practical example. Imagine a provider who provides static caravans. Today, half of the caravans on that site are permanently occupied by people as their homes, and half of them are rented out. They will be captured because they are visitor accommodation. In a year's time, the owner of the site decides that it will become a 100 per cent owner-occupied site, with no static caravans being rented out. The nature of the accommodation has changed, it's gone from being something that needs to be registered to something that doesn't need to be registered, and this power allows the operation of the register to reflect the changing facts on the ground.

Following on from that, then, on, say, a caravan site down in west Wales, or wherever it might be, you have a company that owns five of those caravans on that. Would there have to be five separate entries on the register for five separate places of accommodation, rather than one entity having five places to stay?

So, the visitor accommodation provider would be the one entering the register, but then they would provide the detail under that about the number of sites or the number of offerings that they would have, and that's intended to be included in the register. So, we'd have a clear sense of what's going on.

So, would the provider there be the site owner, or the owner of the caravans that's letting them out?

I don't know whether you want to come in on that.

You just need to speak—. Thank you, Emma.

It might be both. So, the site will be registered, but if an owner owns their own caravan, but they then sub-let it for extra holidays—

Through Airbnb, or through whatever they—

—then they would need to register their individual unit in addition.

Okay. And what about—it was something that we were talking about when we were discussing this Bill in private—pop-up sites? How do you handle a caravan club turning up for a weekend, or something like that?

If it’s a proper arrangement, so it’s not catching squatters or things like that—people just turning up—but a proper arrangement where somebody’s providing visitor accommodation, even if it’s short term, then, yes, they would need to register.

So, that includes the National Eisteddfod, the Royal Welsh, the Urdd Eisteddfod—caravan sites popping up for a week a year. And depending on whether or not they are in a local authority that is liable or not, it doesn’t matter because they would still have to register if that local authority has been mopped up, or the register has being rolled out in that area.

They’d have to register whether or not the local authority decides to implement the visitor levy or not.

The register, yes. 

Yes. 

They have to register everywhere. As the register is rolled out, they would have to register.

And with the complexity of something like that, would that be 1,000 caravans, potentially, turning up at the National Eisteddfod for a week? What level of detail would they need? Would they just say, 'Well, these are the number of plots we have, and therefore this is how much we’re expecting to be staying’? It’s just the mechanics of that, and how that is envisaged to work.

The detail of the application process is still to be determined by regulations, so that will be set out in future. But the intention of the register is that it does give a full picture. So, the expectation is that there will be detail as to the size and the number of units that are anticipated to be at any offer.

Okay.

I think I can see an issue here, because if a caravan comes on, it could have four people in it, it could have one person in it. So, you’ve got to have a unit charge, I suppose, because, unless you go through some sort of—

I suppose we’re talking here about the register and then the levy, so there are two things here. So, the register would register that there are 1,000 caravans. The levy, if it’s applicable in that local authority, would then need to make a calculation as to how many people are staying in an awning overnight. And that could be a challenge—

Work that out after. [Laughter.]

—for this sort of example.

I think there would need to be some help and guidance—many farmers, for instance, have certified location sites and things like that—because there will be administration and extra burdens and things through that. So, we don’t want to actually damage the tourism offer by making it too complex for people to be able to offer.

I think part of the goal with all of this is—again going back to the same point—it’s going to be a very simple registration process. It will be a digital system. It will be straightforward to enter the information, and then you wouldn’t have to keep registering. The intention is that you register and then you kind of update that on an annual basis. It shouldn’t be too onerous; it’s deliberately designed not to be onerous on the accommodation providers.

Thank you. Rhianon. 

Thank you. It seems, in terms of the intention, that that issue is forefront in terms of an ability to be user-friendly, and making this optimum, I would hope, and that’s something that, obviously, we’ll keep an eye on.

In terms of the pending licensing Bill, and the decision taken to include the establishment of the register as part of this Bill, the question around that, really, is: why was this Bill chosen instead of the pending licensing Bill, and was the sector consulted on this approach?

Well, Chair, there was a consultation, of course, with the sector at the point when we were anticipating the registration and the licensing schemes. It was a very clear message from consultation that the register was a prerequisite for the effective collection and management of the visitor levy. So, Members here will be aware that there have been a number of amendments to the legislative approach over the period of the consultation and subsequent analysis. We're now bringing forward two Bills, rather than a single Bill. That is in many ways just for manageability in the legislative programme and the amount of capacity we have to work on all of these issues at the same time.

I was asked by the First Minister in the summer to do a rapid review of the state of play in the two pieces of legislation. Partly on my advice, but having looked at it herself, of course, she agreed that we should have the register in this first piece of legislation, because it is the foundation stone for the levy and the licencing scheme. The sector was consulted then, in the original stages. Putting the register into this Bill, I think, responds to their wishes to make sure the register is firmly in place, and from a Government point of view, it gives us additional confidence that we can bring that second piece of legislation successfully in front of the Senedd to fulfil our ambitions for the licencing component of this piece of work.

And in your forward work legislative programme, where is the second Bill in relation to where—? When are you anticipating that being brought forward?

I must be careful not to exceed my responsibilities here, because it will be for the First Minister to make the legislative statement and to announce the schedule of Bills, but we are working on the basis that it will be a Bill introduced in 2025.

Okay. Fine. Diolch, Rhianon.

Thank you. And finally, in terms of your correspondence to this committee on 26 November, you enclosed further Bill provisions that you intend to table at Stage 2 in relation to registration and penalties. Can you explain to the committee these proposals briefly and confirm why they were not included in the Bill on introduction, please?

Thank you, Chair. Well, those provisions are the necessary enforcement provisions to ensure compliance with registration requirements. If you're going to make it obligatory for people to register, you have to have a regime to deal with what happens if people try to avoid those duties, in order to have fairness between those people who comply with the law and those people who seek to evade it. So, that's what the clauses are about.

Chair, the committee will understand that the decision to put the register into this first Bill meant that some work on the register needed to be accelerated, and it wasn't possible, at the point of submitting the Bill for determination to the Llywydd, to include all the material that I would have wished to have seen included. By the time the determination period was over, that work had been completed. Now, the conventional thing, I think, would have been just to have waited until Stage 2 and to have introduced those clauses as Government amendments. My view is that the right thing to do was to make sure the committee had those clauses, so that you could take evidence on them and come to any views or recommendations that you would wish to make on those enforcement powers. So, I took the decision to provide them to the committee at the outset of your Stage 1 consideration, because I thought that would make a better platform for scrutiny than simply waiting to introduce them at Stage 2.

And it certainly helps with us being able to consult on that during our consultation period as well, so that is appreciated. Rhianon.

Could I just ask, Chair, one final question?

Yes, of course.

Are there any plans for further amendments at Stage 2?

There is one further important area, which is the area of data sharing. I do anticipate that there will have to be Stage 2 amendments on that. I hope to share a document with the committee. I may not be in a position, as we are with the enforcement processes at this moment, to give you the actual text of the amendments, but I do hope to write to the committee shortly setting out the approach we are taking to data sharing. So, once again, if there are witnesses who you wish to take evidence from on that matter, you will know how the Government intends to approach that issue.

That will be useful. As soon as that is available, we'd really appreciate it, thank you. We're rapidly running through time before questions, so if it's all right with you, Cabinet Secretary, if there are questions that we don't get to, are we able to write to you with those? 

Of course.

We'll try and get through some broader points and then write to you on some of the more technical information. Diolch.

Thank you. I'm going to just look a little bit around premiums and things around the levy, and there are some operational questions that are quite quick to answer, I think. They're not too challenging. We recognise that the levy is not going to be charged if the accommodation is arranged under specific legislation around immigration, asylum and all those sorts of things, and that makes sense. Were there any other areas of similar things that you considered exempting, but hadn't? There may be one or two, I don't know.

The 31 days is the other example. There are issues that the committee, I'm sure, will hear evidence on, and to give you the most obvious example, accommodation that's essentially for educational visits.

Yes, of course.

I think we heard a couple of examples raised during the introduction statement on whether Scout accommodation, Guide accommodation, cadet accommodation—. So, there are some other things that the committee, I'm sure, will explore. We will look very carefully at any recommendations you make to us on those matters.

And the other one that springs to mind is children going to places like Glanllyn and Llangrannog, and that sort of aspect, and concerns about the cost involved.

Yes.

That's good. I was going to ask about why you did an individual population base rather than the Scottish model, but you answered that, Anna, earlier on, so I won't bother pushing that one again. I think we got the clarity on simplicity.

But I think there's a question on the simplicity aspect. The question we've been grappling with in our discussions before coming to ask you about it is why per person, as in every person, being a babe in arms or—

I think we'll come on—

Are you coming on to that?

I'll come on to that.

Sorry. There we are.

I'll come on to that afterwards. But the basics, there was a simplicity model for the per person, rather than going for the percentage basis on the cost.

Percentage is more complicated for the accommodation provider. There are some things you have to exempt from charges. If it's a bed-and-breakfast accommodation, you have to exempt the cost of breakfast; that's not the cost of the accommodation. It just makes the administration of it more complicated, and we really have tried hard to stick to making it as straightforward as possible for the accommodation provider.

Okay, thanks for that. That's clear. Would providers be required to pay the full payment if some of their residents left early in the week, or is there a rebate?

I think if you have a contract and the contract is for a period of time, then the visitor levy applies to the period of time that the contract was set. If someone chooses to leave, the contract hasn't altered, so, yes, you'd have to pay.

Okay, that's clear. Section 12 sets out the three rates there: 75p, £1.25 or the nil rate. How did you determine the lower and higher rates, and why did you choose those two categories of charging rates? Was that simplicity again, or was there a deeper rationale behind it?

It's simplicity and fairness. It's to try to recognise the fact that people with fewer resources at their disposal tend to use the cheaper accommodation when they go on holiday. The essential distinction we've used is where people are going to shared accommodation rather than sole-use accommodation, self-contained accommodation. So, campsites and hostels, by their nature, tend to have shared cooking facilities, shared showering facilities, and so on—those we'll charge at the lower rate. Because on the whole—it's a broad generalisation, I know—but on the whole, people with fewer resources at their disposal tend to use those sorts of accommodations. So, we keep two rates for those issues of fairness, only two because of simplicity and to keep the rate as low as possible.

Thanks for that. And on to a point that I think you were alluding to—

Sorry. I was jumping the gun.

—Peredur, on consideration of implementing a minimum age for the levy. I mean, some of us are really wrestling with the fact that a baby might have to pay £1.25, you know, because the poor little things haven't even got a chance. [Laughter.] So, are there further exemptions that could put some sensibility around that?

I'm happy to look carefully at what the committee will say on this matter, but I'll just make two points, though. As soon as you begin to introduce categories, you erode simplicity, and the burden will fall on the accommodation provider to be able to demonstrate that the person is on the right side of whatever age. Wherever you draw the line, you're going to have to be able to demonstrate that you're not charging that person because they're on the right side of the line. That means that the individual now has to produce evidence to show you that this is a baby, not an infant. You know, if you were to say, 'Once you're three, you have to start paying', then the family have to be able to produce evidence to demonstrate, and suddenly you're into a bit of an industry here. So, it erodes the simplicity. And, obviously, every time you take a category of persons out of paying the levy, you reduce the income that the levy produces and that probably leads you to charge more. So, we have a very broad base for this tax, so we really do include everybody and we keep the costs down. If you start narrowing the base, you'll put the cost up.

I urge some pragmatism around this, because I can see a poor hotelier faced with a baby and thinking, 'Do I charge you or not?', you know, and he's going to break the law if he doesn't charge for that poor baby. Anyway, we've got clarity on that.

Section 13 of the Bill defines which types of visitor accommodation are subject to the lower, higher or nil rates of the levy. Can you explain why 'lower rate' applies only to stays in—? Oh no, you've done that one, so I'll leave that one alone. We move on.

Section 14 makes provisions for a principal council to add a premium—and we did touch on premiums earlier—to the lower and higher rates of the levy that will apply in its area. What is the rationale for this and what modelling have you done of the potential economic impacts of local authorities applying a premium? I know, Cabinet Secretary, you talked earlier on about the opportunity to empower councils to make the choices that suit them, but is there anything else you want to add on that?

There's not a great deal of modelling because we don't have the granular detail available to make that assessment. I do not expect councils to use this power in the early days of the levy. If there were to be signs of the power being used in a non-reasonable way, the Bill provides Welsh Ministers with the power to set the premium. But I've seen some commentary suggesting that the Welsh Government should set the premium at zero for the first period of years, and things. We could do, and if the committee has a view on it, then I will obviously look carefully at that. My starting point is that local authorities are trusted partners and that they will act reasonably and that they're not going to make foolish use of the power and that I won't need to intervene to see to that. If there was evidence to the contrary, the power is there.

Sorry. Just on that point, going back to the question about the granular level, would there be an argument to say that the premium could be more targeted, if needed, down to a more localised argument, just on specific, maybe, high-end property or something possibly problematic, which could be worth thinking about?

When we were looking originally at having more variation—so, we've got the lower and the higher rates—the difficulty is identifying, with the data that we have, those types of accommodation. You know, if you wanted to have a kind of premium rate on very expensive hotels, it's very difficult right now for us to determine, and even more difficult for the WRA to do the compliance on that, without the data. This is the kind of thing that, potentially, in the future there is further opportunity for; it's just difficult at this point to do.

But it's building it into the Bill as an option so that it could be used, rather than having to legislate further down the line to allow it. So, it's just something to futureproof the legislation, and it possibly gets closer to the Scottish model, with a percentage, where you have five-star accommodation compared to a hostel or something like that, where it allows for that granular variation.

Yes. Well, Chair, I'm very happy that we can discuss it as a team, because, as you say, as the granular detail becomes available, maybe there would be a way in which premiums could be targeted, in a way that the basic levy itself would not. So, we'll take that away, and thank you for that.

Thank you. Peter.

Just one more from me. I think that we get that there wouldn't be an expectation, or it's highly unlikely, that a council would level a premium at the same time as they are starting the process. I agree, I think it's unlikely that they would put that in place initially, but there's nothing to stop them from doing that.

No. And the Bill could have a clause in it that would prevent that from happening. I think that's a low trust way—

Yes. No, I agree.

—of approaching our relationship with local authorities.

Proper, practical administration of setting a maximum, the Government potentially setting a maximum, for the premium—or a minimum, but a maximum in particular—how would that work, if you had five or six local authorities saying, 'Well, we're going to put it up at £5', another at £1 extra, another at £3 and another at £10, and you think that, possibly, £10 is excessive and £5 is okay? How would you—? So, that you're not making regulations every five minutes to do that, how would you handle people—? You know, if local authorities are thinking about doing this, how do you integrate that into a cohesive thing so that we're not making regulations here in this place regularly?

If councils are to impose a premium, they are to consult and provide notice, and I think that gives a little bit of time to make sure that we have everything in place so that it's not happening on an ad hoc basis. There would be a regularity to it, because they'd still need to provide notice to WRA, to make sure they provide notice to businesses well in advance. I think, probably, that process enables a bit more of an annual review, rather than it simply just being an ad hoc, 'We need to introduce regulations this month, and this month, for another local authority.'

I'm going to offer you an answer that my colleagues will tell me I've got wrong. [Laughter.] I had anticipated that the way it would operate would be the same way as the council tax premiums would operate. The Welsh Government sets a ceiling, but local authorities have the discretion underneath the ceiling. So, if it was a £5 ceiling, one local authority might have £1 and someone might have £3, but there is a ceiling that nobody can go above. It's 300 per cent for the council tax premium, but there is a range from 50 per cent to 150 per cent in practice; local authorities operate within the overall limit.

And then it's going back to being a trusted partner with—.

Yes.

It's a marketing opportunity for councils—

Knowing their local circumstances.

There is that as well. There we are.

That's all from me.

Thank you very much. I'll bring Mike Hedges in now—Mike.

Diolch, Gadeirydd. I'll ask questions on levy repayments, but I've followed closely the answers we've had on Scotland. What about the 60-plus other countries in the world that charge a visitor levy? Have we learnt anything from them?

Well, I will ask Anna, but, yes, Chair, we have. The research done by Bangor University that's published alongside the Bill, focuses on—. Is it seven or nine? It takes I think it's seven different cases studies from places around the world that have a visitor levy already. It demonstrates, I believe, that these are successful additions to localities' ability to sustain their tourism industry and make it a success in the future. It tells us that it is better to have a level of local determination, because of local circumstances, and it tells us that some of the fears that are expressed, and were expressed in those contexts, that people would stop visiting because of the visitor levy, that those fears are not borne out in practice. 

Well, it wouldn't be, would it? You've got supply and demand curves and they cut. What happens is, it might affect the profits of the people doing it, but the price they're charging would be decided on by the demand and supply curves, surely. 

Surely. And it's why we've set it where we have—the level—at the modest end of that international spectrum.

A last bit on this, before I go on to a proper question. I bore people in the Senedd quite regularly by telling them how, in a chain hotel in Caernarfon, I've paid over £100 and less than £50—actually, less than £40—depending on the demand they had for rooms. So, I think that the visitor levy pales into insignificance against those changes. 

I've got a couple of questions on the levy repayment. Why does the Bill not provide a specific timescale for the repayment of a levy by the Welsh Revenue Authority following an application under section 15? 

I think it's because of our experience of the WRA, which has now been in operation for eight years, and has, I think, turned out to be one of the real success stories of the devolution era. The WRA will make, as it does in other aspects of its work, every effort to make sure that a refund is provided without undue delay. To put a specific timescale on the face of the Bill would, I think, limit the flexibility that the WRA needs to respond to the individual circumstances of a particular case in front of it, and it would be more of a straitjacket than it would be a help.

Okay. Leaving out the parenthesis, section 15(1)(c) enables a person who has stayed overnight in visitor accommodation to apply for a refund if the person is in receipt of a disability benefit listed in section 15(5) and accompanied by another person. Why did you decide to require the person to be accompanied in order to be eligible for a refund?

Because the purpose of this part of the Bill is to make sure that disabled people are treated in the same way as a person able to visit on their own. So, if I visit by myself, I pay the visitor levy. A disabled person will pay the levy for themselves, but they may need to be accompanied by somebody else, whereas I would not be. That's an additional cost that I would not have to incur, and so we allow the cost of the visitor levy for the carer not to be charged, so that we treat people—

So, they'd have to pay for themselves, but not for the carer.

But not for the carer. Because I would have to pay for myself—

Well, actually, they'd have to pay, but then they'd ask for a refund. 

Yes, they'd get a refund.

Thank you. Mike.

The Bill requires an application for repayment to be made within 30 days of the last day the person was entitled to stay in the accommodation. Do you feel this allows potentially vulnerable individuals adequate time to apply for a refund? Is that 30 days, or 30 working days?

I think it's adequate time. I think it's important to remember, in a number of these refunds, that it is very likely that the individual—because the refund is there because the person is vulnerable in some way—will be getting support from some organisation. In fact, when we're talking about disability accommodation, it is often purposely provided accommodation by an organisation that is expert in that field. So, the 30 days by itself is normal and reasonable, and, in the case of people who have additional vulnerabilities, it seems to me very likely that they wouldn't be left on their own to claim the refund; they will be with an organisation who would be able to do it on their behalf.

On—. Sorry, Mike. On that basis, could they only apply for one person with them or as many carers as they require with them? So, say it was 2:1 or 3:1 caring, that all carers under that would be, and the question—as Anna's going through her notes there looking—would it not be an alternative for the provider to be able to apply a zero levy to the carer and not have to go through the rigmarole of paying it and then a refund coming back? And that refund would go—. Because the visitor provider would pay it, it would go to the WRA, but the money would then go back to the person who paid it in the first place. It just seems a roundabout way of doing it, where you could apply 0 per cent to or a zero fee to a person. So, it's just something to think about.

We did do a lot of discussion. We had a lot of discussions with organisations that worked with vulnerable people and people with disabilities, and one of the difficulties is also a little bit of privacy between those people staying at that accommodation and what they need to then provide in evidence to that visitor accommodation provider. And also, for that visitor accommodation provider, in relation to things we've already discussed, how much evidence that visitor accommodation provider feels confident with to be able to then go back to the WRA. Whereas having the ability for an organisation to do that on behalf of an individual, or for those individuals just to have a refund through the WRA, felt a little bit less administratively difficult, and also enabled a level of privacy for that person to stay with that visitor accommodation provider without having to provide detail.

It particularly came up, I think, actually with people fleeing domestic violence, where we in our consultations were very, very mindful of not having to put that vulnerable person in a difficult position of having to explain their circumstances to that visitor accommodation provider, or have to somehow provide evidence to that visitor accommodation provider of why they were fleeing or what was going on. And so this is an opportunity, I think, to provide that privacy to that individual to have the support from an organisation, which a lot of people will be able to take advantage of, and this was the best practice that we found that we could do this.

But you could have both.

Yes, it just puts a different onus on the visitor accommodation provider and the relationship between the visitor and the visitor accommodation provider that we were trying to avoid.

Okay. It'll be interesting to see what we get in evidence on that, and maybe we'll come back to you with that. Diolch, Mike.

I did ask whether it is 30 calendar days or 30 working days.

Oh, sorry. Do you have that?

I think in this instance it's silent on that, so I think the assumption would be it would be calendar days, and I think, if my memory serves correctly, the Legislation (Wales) Act 2019 will probably step in and provides that that is the case. I'm fairly certain of that, off the top of my head, but we'd be happy to confirm.

Can I ask that, when we’re going through the legislation, this is clarified? Because the difference between 30 calendar days and 30 working days is one week, so it is a substantial difference.

Section 16(2) of the Bill requires visitor accommodation to provide nil returns if they have no overnight stay. Why?

Well, I think there are two reasons. First of all, it is a signal to the WRA that that accommodation intends to be in business in the following year, and it prevents organisations from having to register, de-register, re-register every time. You simply provide a nil return. It's a sign that the business, while it may not have let accommodation in that year, continues to be an active business, and I think it is just a simpler way of that business being able to send that necessary signal to the WRA.

And finally from me, section 16(5) places a duty on visitor accommodation providers to provide a return 30 days after the end of their accounting period. Do you feel that this is an appropriate timescale, particularly for smaller accommodation providers, given they'll be interacting with a new tax system?

I think it is fair and manageable. It's consistent with the wider tax system. The return process will be a straightforward one for what is a simple tax. You'll hear directly, Chair, I'd imagine, from the WRA and they will explain the very different culture that they have deliberately set out to create between themselves and people who pay taxes to them, which is a supportive relationship, one designed to help the person paying tax to understand the system, to get it right the first time, rather than a compliance regime in which you just wait to see people fail and then step in to penalise them for having failed. And that cultural approach is one that the WRA will apply to this tax, as it has very successfully to the taxes it already collects in Wales.

Diolch, Mike. I've got a few questions here around the WRA. You've obviously been engaging quite closely with the WRA. How confident are you of the WRA's ability to take on the collection and management—you alluded to that just now—and liaising with those local authorities? They're doing that currently with other aspects of taxation, so I'm assuming that that's the case. 

I said, Chair, that I think the WRA has been a success story, and I think it is the right moment for the WRA itself to be able to step into some new responsibilities and to demonstrate that the success it's had elsewhere can be replicated in this new area. I know that the WRA is already exploring with local authorities memorandums of understanding and service level agreements, and so on, that would regulate their relationship. I think they will have the necessary operational and technical expertise to be able to administer the levy effectively, and that their existing relationships with local authorities over landfill disposals tax, for example, will stand them in good stead. 

Diolch. Moving on to section 23, it provides a non-exhaustive list of the types of spending by the principal council that will meet the requirement for spending on destination management and improvement. How did you get to the list of those in section 23? Given that you have a trusted relationship with local government, is this putting a little bit of a straitjacket on them to make sure, or how do you avoid it being used for something that is completely outside tourism? Is that the thinking behind it? Could you go through that thinking, please? 

It's a form of soft hypothecation. There are those in the industry, quite certainly, whose advice to us in the consultation was that we should set a very specific limited set of purposes for which the levy could be used, and the council would not be able to use it for any other sort of purpose. I didn't think that was sensible, on the one hand, because I think circumstances differ between one local authority and another, and the right thing to spend it on in one place to support the tourism industry will be different in another local authority. But I also didn't think that it reflected the underpinning trusted partner approach that we are taking here. 

I do think it is reasonable for the Bill to set out and to provide examples of the broad purpose: the money should be used to sustain the tourism industry in future. I think there is a line there between some things that councils do that clearly have no bearing on the tourism industry, but there are—. What's a library here? Is a library something that has no relevance to tourism? Well, lots of local authorities, for example, have their tourism advice services based in libraries. If you want to find a leaflet to know where to go or you need to ask somebody about how you get somewhere, that service is based in the library. 

So, there will be some areas where local discretion and local understanding will need to be applied, but I think the Bill strikes a balance: the broad purpose has to be for destination management and for investment in the industry without making that the straitjacket that you referred to, Chair. 

How will people know? How will it be policed on the ground? Well, the Bill requires local authorities to keep revenues raised from the tourism levy in a separate account. So, if you're a business or a resident in that local authority area, you will be able to see how much money was raised, and you will have to provide an annual report as to how that money has been applied. So, if you feel that the local authority has stepped out of that umbrella, and is now using this money to substitute for other things, or to spend it in services, it will be there for you to see and for you to challenge. In some ways, that transparency, the fact that everything has to be conducted in the open air, for everybody to look at, I think will be the way in which this will be a self-policing scheme.

And do you see that that would be the role of opposition and scrutiny within councils to do that, rather than Welsh Ministers or Senedd Members?

I think it is for local players to conduct that oversight. It can be done at the council itself, but it can be done by any one of those other broader civic bodies, to challenge the local authority, if they feel that the money is not being applied in line with the purposes set out in the Bill.

And what recourse would there be, if a council had decided to go a little bit beyond the line in the sand and—?

Well, in the end, it's the democratic process, isn't it? Those decisions are made by people who put themselves up for election, and if local people feel that the council is not acting reasonably, they can choose a different council.

Just on the same point, looking at those provisions in section 23(a), (b), (c) and (d), initially, this has been sold, clearly, for the points that you pointed out on the Pembrokeshire model earlier: providing, maintaining and improving infrastructure, facilities and services for use by visitors—absolutely sensible to have on the face of the Bill. I'm not quite so sure then, though, about perhaps (b), maintaining and promoting use of the Welsh language. I can see why that's a benefit a council will want to do in promoting the Welsh language—that's something that they would be doing anyway—but why should the levy be used to do that? Shouldn't it be really focused on physical, infrastructural pressures of tourism? Because that's what it was initially sold on. So, on the face of the Bill, I was just anxious that, whilst (a) and (d) and perhaps possibly (c) make sense, I'd just put that devil's advocate challenge back about the language.

I think the answer that we would give would be this: many parts of Wales that have very large numbers of visitors are our Welsh-speaking areas. They are attracted to those areas because they have that very particular and distinctive character—it's what makes them worth visiting in the first place. And yet, a relatively small local permanent population can face a very large number of people who visit, which does put pressure on the use of the language in those areas. It's just another example of how the levy can be used to sustain the character of an area that makes that area attractive to visitors in the first place. In terms of the Welsh-speaking nature of some of the communities that have some of the largest numbers of visitors, using a bit of the levy to keep the character of that area intact in that way does seem to me to be a reasonable use of the levy. 

And potentially—and I'm speaking just off the top of my head, really—for example, the National Eisteddfod or the Urdd Eisteddfod travelling around, it does put a little bit of pressure on local government for services in those areas, and it does promote the Welsh language. So, potentially, that levy could be used to help with some of that cost.

Could I suggest—? Recognising that the face of the Bill is very clear, is to be read as a priority, your (a), (b), (c) and (d), I would argue, are perhaps around the wrong way on the face of the Bill. Because it looks like there's a priority on Welsh language above infrastructure.

There's no hierarchy implied by the list. They are of equal salience in making a decision on investment. It's not meant to be, '(a) is more important than (b)'.

It may be perceived—

Yes, okay, but it's definitely not; legally, it has no effect of that sort.

I know Rhianon indicated that she wanted to come in on this. 

Thank you. I'm afraid it's post chase; I tried to come in earlier, Chair.

Sorry.

In terms of the trusted relationship with local government—and we've talked about the ceiling around council tax and that adherence within that—I just wanted to clarify my understanding of what's been said in terms of there are no penalties from the Welsh Government—and I presume other agencies—around the fact that this is envisaged as being self-policing. So, I just want to clarify that there is no penalty in terms of the Bill. I believe you wrote to us around penalties to do with registration on 26 November, Cabinet Secretary. So, I just wanted to get a more defined picture on that, if that's possible.

Thank you Rhianon. Indeed, Chair, I wrote to the committee setting out the penalty regime in relation to the register. As far as local authorities are concerned, provided they operate within the parameters set out in the Bill, there are no penalties there. The Bill does provide Ministers with powers to tighten parameters, if it was felt that local authorities were not acting reasonably—and that's why we had that discussion about whether the premiums would be subject to a ceiling. Provided local authorities operate within the ceiling, there are no penalties. Of course, if anybody tried to go beyond the ceiling, they would be in breach of the law, so the penalties would follow in that way.

Okay. Thank you.

Diolch. For Members, I'm going to skip—. Seeing as we are the Finance Committee, it would be remiss of us not to talk about the financials, and we're rapidly running out of time, so I'm going to go to Peter Fox, and then I'll come back, if we have time then, to Mike and Rhianon for some other questions, but we might need to write to you with those. But I think it's important to talk about the regulatory impact assessment, our bread and butter here in this committee.

Thank you, Chair. It's such a fascinating subject. The total cost of the Bill is estimated to be between approximately £314 million and £577 million. That's a 59 per cent difference between those lower and upper ranges. Could you explain the reasons for providing such a range, and to what extent can the committee be satisfied it is receiving a thorough assessment of the costs associated with the Bill?

First of all, I recognise that there's a wide margin of appreciation between those figures. But it's there because we cannot know at this point how many local authorities will decide to take up the permissive power that the Bill provides. When it could be one and it could be 22, the costs that are driven in those circumstances are very different. And not only is it different depending on the number of local authorities, but local authorities themselves vary hugely in terms of size, scale, the make-up of the visitor accommodation in their areas, and so on. So, we've provided the best range we can, acknowledging that it is a wide range, but they are the best estimates we have, using the data we have available, and given the unknown nature of take-up of the Bill.

My second question was around data, but I think you've made it clear that a lack of data is making it more difficult to project. So, I'll move on. The calculation of £33 million in revenue that the levy could generate per head is based on the Welsh Government's regional and local tourism profiles. However, we note that the Cabinet Secretary for Economy, Energy and Planning recently wrote to the Economy, Trade and Rural Affairs Committee to explain that there have been no further publications in the series, due to concerns regarding the quality of data at the regional and local levels. So, recognising that, can you explain why you have used this data source, given the concerns raised by the other Cabinet Secretary?

We haven't used those sources. The difficulty with quality of data, as we know, has become a very widespread phenomenon in the post-COVID era. It's all the problems we have with the Office for National Statistics labour force survey and so on. So, what we have done is used a three-year average, based on data provided up to 2019. We've tried to find a way round the fact that, in the post-COVID era, data has become more volatile, and, particularly, the lower level you go down, the more unreliable it becomes. So, we've used the data from the period when things were more stable, more reliable, and taken a three-year average, so we iron out any variability between years, and we think that that is a more reliable way of providing information and that's how we got to the £33 million.

Okay. So, the RIA includes different cost scenarios for visitors, with solo travellers paying an additional £6.30 and £10.50, depending on the lower or higher rate, and that's if they stay for seven nights, whilst a family of four would incur additional costs of £25.20 up to £42 at the higher rate. What analysis have you undertaken to understand the impact of the levy on those larger families in particular? You made reference earlier to the costs to families.

Well, Chair, I think my view would be that a levy is no different at all here than any other component that a family would face, because a solo visitor going to the cafe buys one bag of chips, and a family of five has to find food for five people. So, everything that a family does will be scalable in terms of the costs that they incur, and the visitor levy is absolutely no different in that way. Families with larger numbers have to budget for everything they do being more expensive—it's five entries to Folly Farm rather than one, isn't it? So, this is the same. It adds, but so does everything else you do if you're a family of that size. It will become just part of the way that you prepare. There is some evidence that larger families tend to use the less expensive part of the accommodation, which is another reason why we have that differential, the 75p rate for campsites and so on. So, there is some recognition in the Bill that larger families mitigate the costs they face by using cheaper forms of tourism accommodation, but the visitor levy is no different to any other component of the costs that a larger family has to be able to plan for and provide.

Yes. They just might have to buy five bags of chips instead of six, and share them.

They might, yes.

Peter, just to go back to the previous question around the data that was used, in the explanatory memorandum, in paragraph 8.5.86, it says,

'Under simplifying assumptions, and if it were implemented by all local authorities in Wales, it is estimated that a visitor levy could raise up to £33 million per year in revenue. This figure is based on data regarding the number of nights spent by both international and domestic visitors in Wales as reported in the Welsh Government’s regional and local tourism profiles.'

But I think you just said that you didn't use that data, so—

We used data in the three years up to 2019, but—

But not beyond.

—not subsequently, when the data becomes more volatile. So, we used the data from that—

The more historic—

—but when it was more reliable.

Right. Thank you for that clarification, because it was just to make sure. Diolch yn fawr.

And the last point from me, and I think we've probably covered it off a couple of times, but costs included in the RIA assume all local authorities will take up the levy. What engagement have you had with local authorities in determining their intentions to implement the levy to support those estimates?

As I said, Chair, we're not expecting that every local authority in Wales will take up the power in the first instance. The £33 million is based on everybody doing it, but so are many of the other ways in which the RIA has been constructed. Our engagement suggests there will be some early movers, and that others will look at that experience, have the full benefit of the register, and then make assessments in slightly slower time.

Thank you.

With the costs, and assuming that it raises £33 million, that's revenue down the line, but there are upfront costs now for the WRA. Would that be the Welsh Government putting that money in and it not being recouped from local authorities when they put this forward, so it's only the administration down the line that the WRA would haircut, if you like, rather than thinking, 'Well, it's cost us x amount to set all this up, so we're going to recoup it from—'.

No. I think there are three phases in the costs. The ambition is that, in the end, it becomes self sustaining—there are enough local authorities taking part, it covers the cost of the register. So, that's the end point. The starting point, the set-up costs, the Welsh Government will cover those. And then there will be a period in the middle where it will be a shared cost. If there were only a very small number of local authorities taking up the power, I would not expect that they would cover the full costs of the WRA operation.

Because it wouldn't be fair.

It would not be fair. So, the Welsh Government recognises that we will contribute to those costs in those early years. But as more local authorities join and the cost base becomes wider, then the ambition is that it becomes a self-sustaining system without the Welsh Government having to provide a subsidy behind it.

And have you worked out how many local authorities would need to come on board to get to that cross-over point?

It is quite hard to do, because—

It depends on the size of the local authority.

If it was Merthyr, Ceredigion and another smaller council, that would be quite different, wouldn't it, to one large council? So, it's hard just to give you a number that says, 'Well, when we get 13, we'll have got there.’ It will depend on the nature of the local authorities that opt in at the start.

Okay. Thank you. That's great. I think we've covered most of the things on the RIA. So, maybe we can come back to some questions by Rhianon, and then I'll come to Mike after that then, please.

Thank you very much. Diolch. In regard to some possible issues with accommodation providers straddling local authority boundaries and third party arrangements, section 35 states that if the premises where visitor accommodation is provided are not entirely within the area of one principal council for the purposes of the levy, then the premises are to be treated as being in the area where the greater or greatest part of that premises is situated. Do you, then, foresee any issues with those such properties that are straddling a very long line and local authority boundaries also, and the border with England?

I don't think it will be a difficulty, Chair, because those difficulties will have been ironed out already because somebody will be liable for council tax for that property. So, there is an issue, definitely, but it'll have been decided already, and the visitor levy will just follow the determination that's already been made.

Okay. Thank you. Section 36 outlines arrangements for a third party to collect and pay the levy on behalf of a provider. What engagement has been implemented with third party providers, such as those of the ilk of Airbnb, regarding implementation of the levy? How do you see it working in that online sphere?

Anna will be closer to the actual engagement that took place, Chair, so I'll ask her if she can help with that.

Happy to, yes. We've had quite a lot of engagement with Airbnb and the other online booking platforms. The nice thing is there are opportunities to learn from places all around the world. So, their feedback, actually, was really useful also to understand how it's worked in other places. They are so familiar with tourism taxes and visitor levies, which is very helpful. So, for those visitor accommodation providers, they can choose to use Airbnb, if they use that platform, to help them to make the payments to the WRA, but the liability still—. The levy is due from the visitor accommodation provider, but they can work with these online booking platforms to help them with their payments.

How do they normally do it with other countries where this happens? Is it that they would add it as a breakdown on the bill, that they would collect the money, and then they'd just distribute it, part of their own fee, part to the provider, and part then to the WRA? How do they do it in other places?

It really varies, and they said that they have the capability of doing it, and that one of the nice things about it, they said, is that they’re very digital, so they have the ability to adjust to every different type of visitor levy and tourism tax. So, it will be dependent on how the visitor levy accommodation provider wants to do it. So, obviously, some visitor accommodation providers may absorb the cost of the levy within their price, and others may want to charge the levy and very clearly—. We’d like everybody to show it, but it will depend on how the visitor accommodation provider decides to do it. And they have the ability to vary what they do on their platforms.

And is there a requirement for anybody charging the levy to actually, as you just said, show it on their bills, in the same way as VAT and that sort of thing, to say, ‘Well, this is paid’ or—? What’s the—? That’s something that I haven’t picked up on in the Bill.

Apologies, I need to double-check that in the legislation, because I know we had a long discussion about it, and whether we could impose the ability for the visitor accommodation provider to show it, and I can’t remember, apologies, where we ended up. I don’t know whether you remember, Nick.

Maybe you can write to us on that, just to do that. 

Thank you. Yes, we will do. 

That would be great. I'll bring Mike in for some questions about berths and moorings, and the future. There we are. Mike. 

Diolch, Cadeirydd. Section 40 gives the Welsh Ministers powers through regulation to amend both this legislation and the Tax Collection and Management (Wales) Act 2016 in respect of berths and moorings provided for vessels. Why do you need these powers?

Well, Chair, when you’re developing a Bill, what you find is that, at the core of the Bill, everybody is very clear about what it is you’re talking about and what’s going to be captured by the Bill. And then, as discussion goes, you get more and more into the more marginal areas. Wales has an industry where cruise liners come to Wales, stay in Welsh waters. They are visitor accommodation. There is an argument that they should be captured by the Bill. But, when you get into the detail of it, there are a lot of additional complexities in the marine sector that we simply weren’t able to resolve satisfactorily by the time the Bill came in front of the Senedd. I wanted to keep that possibility alive for the future, when more work can be done. I didn’t think the Senedd would be entertained by a single piece of separate primary legislation simply dealing with berths and moorings. So, we take a power in the Bill to return to that issue, because it simply wasn’t resolvable.

I was reminded when we were discussing this of many years ago spending long Friday afternoons in an airless room deciding where the SS Balmoral, which plied its trade between Penarth and Ilfracombe, had different rules on indoor smoking. At what point in the Bristol channel did it leave English waters and English rules and have to have signs put up to tell people they were now in Wales? So, you get to some point, in all of these policies, where there is a sort of level of fine detail that you just can’t resolve in time, and that’s what happened here. There is an issue to do with berths and moorings. We ought to return to it. The Bill will allow us to do that.

And that’s beyond just the cruise liners. That would be narrow boats, marinas, that sort of element coming in.

Yes—individual yacht owners. It’s one of those issues where the principle is not difficult, but the practical application of it becomes very complex indeed, and I didn’t want to hold this whole Bill up while we resolved those final details.

Mike. 

We know that Spain and Italy have a lot more cruise liners going to them. We also know that Spain and Italy have a lot more small boats going from one country to another. Do you know how they manage it?

I do not, no. I’m sure there will be somebody who we have talked to, and in the advice that we have, that would help us to answer that, Mike, but I don’t, I’m afraid.

Too often, when we look at these things, we always treat ourselves in isolation, when the rest of the world has been doing some of these things for a very long time. Paragraph 5 includes a new permitted disclosure of protected taxpayer information for the purposes of the WRA’s functions. Can you explain why this is necessary?

Well, Chair, when the WRA was being set up in Wales, the original founding legislation, the TCMA, the Tax Collection and Management (Wales) Act 2016, set the barrier for disclosure of protected taxpayer information very high. And we did it deliberately because it was a new body, and it was taking on fiscal responsibilities for the first time, and we wanted to be able to demonstrate to taxpayers in Wales that their information was entirely secure. What the eight years of operation has shown is that, actually, we probably pitched those walls a bit higher than they needed to be, because there are some conversations where the WRA isn’t able to tell the person they are talking to information about that person because of where the rules are currently pitched.

So, the plan is to bring the WRA into line with His Majesty's Revenue and Customs rules for these purposes. The WRA will still only be able to make a disclosure that is related to their own functions. All the safeguards that apply to HMRC disclosure will apply to the WRA. There is a data protection impact assessment published alongside the Bill, and that reflects the fact that we have consulted the Information Commissioner’s Office about this change, and they are content with the rationale for it. So, it’s to make the WRA able to operate more rationally than the current very tightly restrictive rules have allowed them to.

Does that, then, allow sharing of WRA data with Government as well, with regard to that?

Not with Welsh Ministers, no. That is prohibited, and will continue to be so.

Okay, diolch. 

I’ve got some other questions here, but I think they can be dealt with in writing.

Certainly. 

But one of the ones I don’t think can be is: paragraph 23 introduces a penalty point-based system for the late filing of visitor levy returns. What is the rationale for employing such a system?

Well, first of all, Chair, it draws on the work done by the UK Government, and led by HMRC, and it’s to be proportionate, really. Somebody who just makes a mistake, and files a return late, I don’t think—given that this is going to be a tax that applies to quite a lot of very small providers, having to do it for the first time—that the first time you make a mistake, you want somebody to be faced with a penalty for doing so. So, points will be awarded. If you’re a persistent offender, those points will add up, and a point will come when a penalty will be imposed. But it’s to be proportionate. It’s to recognise the nature of the tax, the nature of the new tax base, and to have a proportionate response when things go wrong. People who continuously and deliberately do things outside the rules, well, there will be penalties that they will feel. But most people will not be like that; they might just make a mistake, or miss a day or something like that. A points-based system allows you to recognise that in a more proportionate way.

Do other countries do that?

Again, I’m afraid I don’t have the international evidence in front of me, but I imagine that the work done by the UK Government with HMRC will have drawn on evidence from elsewhere.

Okay. Thank you.

Diolch, Mike. Just one last question that's occurred to me, and I probably know the answer, based on what you’ve said: could the levy be seasonal, as opposed to all year around, so in the same way as the seasonal nature of tourism? Is that something that was considered and discounted?

Well, considered and discounted—

Yes.

—for all the reasons we’ve discussed, of trying to keep it as straightforward, as simple, as easy to understand, and as easy to administer as you can. Yes, I can see a policy rationale, particularly when we’ve been talking about issues of overtourism, and the stresses and strains that that puts on places. But once you introduce another piece of differentiation, then you introduce another piece of complexity, and the costs that go with that. So, we rejected it in the end because of those—. We keep coming back, and have done in our debates internally, and in the discussion today, to those foundational principles of trying to keep this as simple, straightforward and as easy to administer as we can.