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The rugged mountains, limestone caves and spectacular waterfalls of Bannau Brycheiniog – the Brecon Beacons – attract visitors from all over the world.

Tourism is a vital part of the local economy. But local attractions say the industry would be devastated by the Welsh government’s plans for a nightly visitor tax.

“In an area like this all we’ve got is tourism and farming – there is nothing else,” says Ashford Price from the National Showcaves Centre, a visitor complex of cathedral sized caverns, winding tunnels, a dry ski slope, shire horse centre, self-catering accommodation and campsite.

“If they go on like this the future for Welsh tourism is really, really bleak. It will be an absolute catastrophe.”

Ashford Price
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Ashford Price says the local area relies on tourism

The proposed fee would be £1.25 for those staying at hotels, bed and breakfasts and self-catering accommodation – and 75p for campsites, caravan sites, and hostels.

Ashford is secretary of the Welsh Association of Visitor Attractions. In protest against the plans, its more than one hundred members closed their attractions for a day.

“Even Welsh people who live in Wales will be clobbered by this tourism tax,” he said.

“It’s quite high, there’s no reduction for children. For a family that will add roughly £35, £40 a week. If you’re staying two weeks, as many people do, it’s £70 on top of your bill. At a time when everybody’s earnings are really struggling, it’s utter insanity to put Wales at such a disadvantage.

“There will be no more big developments. We already cancelled a development for £1.5m and I know other attractions are doing the same. I don’t think the Welsh government really understands how demoralised people feel.”

Anthony Christopher
Image:
Anthony Christopher

‘It’s a disaster’

In the nearby village, Anthony Christopher, landlord of the Penycae Inn, is deeply frustrated.

“I just feel like calling this government a bunch of weasels,” he said.

“We’re a small family business and all these extra taxes are taking away the will to do anything else.

“We have national insurance already – contributions are very high. VAT is very high. Now this tax is coming – it’s a disaster. We have to put this extra charge on the customers – how much more can we put on the customers? It’s terrible.”

Anthony has just converted an old school building into a 14-bedroom hotel – due to open in January.

“If I knew this was going to happen I may not have built my hotel. It’s very worrying.”

Many areas in Wales have struggled with the impact of tourism in recent years, with complaints about overflowing car parks, traffic jams, litter and even human faeces on Mount Snowdon.

Rubbish on Yr Wyddfa (Mount Snowdon). Pic: British Mountaineering Council/Tom Carrick
Image:
Rubbish on Yr Wyddfa (Mount Snowdon). Pic: British Mountaineering Council/Tom Carrick

The Welsh government argues giving councils the power to charge a tourism tax would help pay for better local services.

“During a period of sustained austerity of the sort we’ve seen over the last 14 years, local authorities inevitably end up focusing their spend on those things for which they’ve got statutory obligations – social care, education and so on,” said Finance Secretary Mark Drakeford.

“That has meant there’s been a reduction in the amount of money available for local authorities to invest in infrastructure that makes them successful places for tourists to visit. This is a way of collecting a very small contribution from every one of us who makes a visit to be reinvested in the conditions that make for that visit to be a success.

“It’s money that would be reinvested in the tourism industry, for example, clean beaches and safe footpaths and car parks and public toilets.”

Mark Drakeford. File pic: PA
Image:
Mark Drakeford. File pic: PA

‘People simply absorb it’

The tourism industry accounts for 11% of all jobs in Wales. But an impact assessment commissioned by the Welsh government predicted that in a worst case scenario, 730 jobs could be lost in the sector if a visitor tax was introduced across the country, with an economic cost of £47.5 million. It also predicted 340 local authority jobs would be created.

Mr Drakeford insists the tax will boost tourism – not damage it.

“For those who have fears that the very modest visitor levy will put visitors off, the experience of around the world is that simply isn’t the case. There is a great deal now of empirical evidence for many places that have introduced visitor levies of this sort, not just abroad, but in Manchester, for example,” he said.

“The evidence is not just from big places like Venice, but from rural France, where there’s a levy of this sort. People simply absorb it as part of the costs of their holiday.”

Tourism taxes in cities across Europe range from around 50p to £5 a night, although businesses generally benefit from lower rates of VAT than the 20% paid in the UK.

The idea is becoming increasingly popular across the UK.

The Scottish Parliament voted through similar legislation to that proposed for Wales in July, with Edinburgh set to become the first council to start charging visitors a tourist tax of 5%.

Manchester's £1 a night tourism levy could raise £2.8m
Image:
Manchester’s £1 a night tourism levy could raise £2.8m

While some regional mayors like Andy Burnham have been calling for equivalent powers to be introduced in England, the Westminster government has no plans to do so.

But local areas can work around this through businesses coming together to set up their own schemes. Manchester’s £1 a night charge raised £2.8m in its first year and hoteliers in Liverpool are about to vote on a similar idea.

Other cities, including York and London, are also considering the option – though a plan for Bournemouth, Christchurch and Poole has been put on hold after objections from hotel owners about the ballot held there.

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Despite the backlash from local businesses, the Senedd are due to vote on the legislation in the summer.

If passed, councils will then consult with local people on whether to take up their new powers. Tourists could then start being charged in 2027.

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Ofwat to be swept away on tide of public anger over sewage spills

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Ofwat to be swept away on tide of public anger over sewage spills

Sir Jon Cunliffe’s review of the water sector is comprehensive, clear-eyed, and about as radical as allowed by terms of reference that explicitly ruled out renationalisation of England’s private water and sewage companies.

With that key demand of many campaigners off the table, the former Bank of England deputy governor has focused on more effective regulation and securing a better deal for consumers and the investors without whom the industry will sink.

Sir Jon Cunliffe, Deputy Governor for financial stability at the Bank of England , during the Bank of England Monetary Policy Report Press Conference, at the Bank of England, London. Picture date: Wednesday July 12, 2023.
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Author of the report Sir Jon Cunliffe, former deputy governor at the Bank of England. Pic: PA

So Ofwat, the embattled current regulator, is to be swept away on the tide of public anger at sewage outflows and shareholder dividends, and the disgruntlement of all its stakeholders.

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Sewage in UK rivers a ‘disgrace’

Having succeeded in its primary aim of keeping consumer bills down, it is now a victim of the consequences: a shortage of investment in infrastructure and a failure to apply similar rigour to shareholder dividends and executive pay.

While campaigners and customers say it has failed to hold companies to account, the companies complain they are too tightly controlled to attract investment.

Ofwat privately points out it can only apply the powers and political direction it is given – but the new government, going with the flow of angry voters, will not hesitate to pull the chain.

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Why sewage outflows are discharging into rivers

The new regulator that follows will have control over environmental as well as economic standards, which has to be better than the current division between three different bodies, and may help define targets and priorities for the industry, like cutting sewage outflows in half by 2030.

But to deliver those targets, water companies need to be both sustainable and financially attractive.

Like it or not, that means paying a return to investors, a fact that Sir Jon, a veteran of the financial crisis, does not attempt to hide.

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So while there will be tougher powers to vet and even block potential company owners, he wants to create a low-risk, low-return environment for investors who currently see better returns elsewhere without any of the political and public heat that comes with water.

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Compulsory water meters and regulator abolished – key recommendations from landmark report into ‘broken’ water industry

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'Broken' water industry set to be overhauled - nine key recommendations from landmark report

The system for regulating water companies in England and Wales should be overhauled and replaced with one single body in England and another in Wales, a once-in-a-generation review of the sector has advised.

The report, which includes 88 recommendations, suggests a new single integrated regulator to replace existing water watchdogs, mandatory water metering, and a social tariff for vulnerable customers.

The ability to block companies being taken over and the creation of eight new regional water authorities, with another for all of Wales to deliver local priorities, has also been suggested.

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The review, the largest into the water industry since privatisation in the 1980s, was undertaken by Sir Jon Cunliffe, a career civil servant and former deputy governor of the Bank of England who oversaw the biggest clean-up of Britain’s banking system in the wake of the financial crash.

The government confirmed at a news conference on Monday that Ofwat will be abolished as part of an overhaul of a “broken” water regulation system.

Environmentalist Feargal Sharkey told Sky News, “we were promised champagne, what we got was a glass of sour milk”.

File pic: iStock
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File pic: iStock

Sir Jon was coaxed out of retirement by Environment Secretary Steve Reed to lead the Independent Water Commission.

Final recommendations of the commission have been published on Monday morning to clean up the sector and improve public confidence, as bills rise 36% over the next five years. Here are its nine key recommendations:

• Single integrated water regulators – a single water regulator in England and a single water regulator in Wales. In England, this would replace Ofwat, the Drinking Water Inspectorate and water-environment related functions from the Environment Agency and Natural England. In Wales, Ofwat’s economic responsibilities would be integrated into Natural Resources Wales.

It’s hoped this will solve the “fragmented and overlapping” regulation, and more stable regulation will improve investor confidence. Communications regulator Ofcom was given as an example of how combining five existing regulators into one worked.

• Eight new regional water system planning authorities in England and one national authority in Wales to be responsible for water investment plans reflecting local priorities and streamlining the planning processes.

The new authorities would be independent, made up of representatives from local councils, public health officials, environmental advocates, agricultural voices and consumers. The aim is they could direct funding and ensure accountability from all sectors impacting water.

• Greater consumer protection – this includes upgrading the consumer body Consumer Council for Water, into an Ombudsman for Water to give stronger protection to customers and a clearer route to resolving complaints. Advocacy duties are to be transferred to Citizens Advice.

• Stronger environmental regulation, including compulsory water meters. Also proposed by Sir Jon are changes to wholesale tariffs for industrial users and greater water reuse and rainwater harvesting schemes. A new long-term, legally binding target for the water environment was suggested.

• Oversight of companies via the ability to block changes in ownership of water businesses when they are not seen to be prioritising the long-term interests of the company and its customers, and the addition of “public benefit” clauses in water company licences.

To boost company financial resilience, as the UK’s biggest provider, Thames Water struggles to remain in private ownership, the commission has recommended minimum financial requirements, like banks are subject to. This could mean utilities hold a certain amount of cash. It’s hoped this will, in turn, make companies more appealing to potential investors.

• The public health element of water has been recognised, and senior public health representation has been recommended for regional water planning authorities, as have new laws to address pollutants like forever chemicals and microplastics.

• Fundamental reset of economic regulation – including changes to ensure companies are investing in and maintaining assets to help attract long-term, low-risk investment. A “supervisory” approach has been recommended to intervene before things like pollution occur, rather than penalising the businesses after the event.

• Clear strategic direction – a long-term, 25-year national water strategy should be published by the UK and Welsh governments, with ministerial priorities given to water firms every five years.

• Infrastructure and asset health reforms – companies should also be required to map and assess their assets and resilience.

Nationalisation of the water industry was not in the Independent Water Commission’s terms of reference and so was not considered.

Sir Jon said the report has “tried to attack the problem from all sides”.

He warned that bills are going to rise by 30% over the next five years.

“There are some inescapable facts here,” he said.

“The cost of producing water and dealing with our wastewater is going up.”

How has the report been received?

In a speech responding to Sir Jon’s report, Mr Reed said he was abolishing Ofwat.

The water industry lobby group Water UK said “fundamental change has been long overdue”.

“These recommendations should establish the foundations to secure our water supplies, support economic growth and end sewage entering our rivers and seas,” a spokesperson said.

“The Independent Water Commission has written a comprehensive, detailed review of the whole sector, with many wide-ranging and ambitious recommendations.

“Crucially, it is now up to government to decide which recommendations it will adopt, and in what way, but the commission’s work marks a significant step forward.”

Ofwat to be swept away on tide of public anger


Paul Kelso

Paul Kelso

Business and economics correspondent

@pkelso

Sir Jon Cunliffe’s review of the water sector is comprehensive, clear-eyed, and about as radical as allowed by terms of reference that explicitly ruled out renationalisation of England’s private water and sewage companies.

With that key demand of many campaigners off the table, the former Bank of England governor has focused on more effective regulation and securing a better deal for consumers and the investors without whom the industry will sink.

So Ofwat, the embattled current regulator, is to be swept away on the tide of public anger at sewage outflows and shareholder dividends, and the disgruntlement of all its stakeholders.

Having succeeded in its primary aim of keeping consumer bills down, it is now a victim of the consequences: a shortage of investment in infrastructure and a failure to apply similar rigour to shareholder dividends and executive pay.

While campaigners and customers say it has failed to hold companies to account, the companies complain they are too tightly controlled to attract investment.

Ofwat privately points out it can only apply the powers and political direction it is given – but the new government, going with the flow of angry voters, will not hesitate to pull the chain.

Read more here

Campaign group Surfers Against Sewage said the report “utterly fails to prioritise public benefit over private profit”.

“This is not transformational reform, this is putting lipstick on a pig - and you can bet the champagne is flowing in water company boardrooms across the land,” said its chief executive, Giles Bristow.

“Only one path forward remains: a full, systemic transformation that ends the ruthless pursuit of profit and puts the public good at the heart of our water services,” he said.

“We welcome Sir Jon’s calls for a national strategy, enshrining public health objectives in law and regional water planning. But we won’t be taken for fools - abolishing Ofwat and replacing it with a shinier regulator won’t stop sewage dumping or profiteering if the finance and ownership structures stay the same.”

Environmentalist Feargal Sharkey told Sky News, “we were promised champagne, what we got was a glass of sour milk”.

The regulator Ofwat said, it will now work with the government and the other regulators to form the new regulatory body in England, and “to contribute to discussions on the options for Wales set out in the report”.

“In advance of the creation of the new body, we will continue to work hard within our powers to protect customers and the environment and to discharge our responsibilities under the current regulatory framework. We will also work collaboratively with all our stakeholders to ensure a smooth transition.”

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BT in talks to dial up successor to veteran finance chief

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BT in talks to dial up successor to veteran finance chief

BT Group is scouring for a new finance chief to succeed the veteran executive who joined the FTSE-100 telecoms company nearly a decade ago.

Sky News has learnt that Simon Lowth, who joined from BG Group in 2016, is preparing to step down in the next 12 months.

Industry sources said that Allison Kirkby, who became BT’s chief executive last year, had begun meeting candidates to succeed Mr Lowth.

An appointment could come later this year, they added.

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The identities of the contenders to replace Mr Lowth were unclear on Monday.

Mr Lowth’s retirement will come with Deutsche Telekom and the Indian billionaire Sunil Bharti Mittal collectively holding more than a third of BT’s shares.

Their respective intentions towards their stakes may help shape the company’s medium-term future, with Openreach – BT’s infrastructure arm – accelerating its rollout of full-fibre broadband across the UK.

BT said: “As part of its business-as-usual activity, the BT board undertakes regular succession planning to ensure it is preparing appropriately for the future.”

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The company declined to comment on details of the process to identify Mr Lowth’s successor.

On Monday morning, shares in BT were trading at about 198.7p, giving it a market value of about £20bn.

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