AS COUNCIL TAX premiums and tourist levies stir tensions, local businesses and residents weigh the cost of protecting Welsh identity against the economic lifeline of English tourism.

In St Davids, the recent spring sunshine bathes flint cottages and surfing shops in golden light. But beneath the postcard-perfect surface, a quiet rebellion is taking shape.

This year, Pembrokeshire County Council became the first local authority in Wales to push back against the Welsh Government’s controversial tourist taxation strategy. After reducing the second home tax premium from 300 per cent to 150 per cent in October, the council announced in April that it will not implement the proposed visitor levy during its current term, which ends in 2027.

The move has been praised by some as a lifeline for struggling businesses. Others fear it signals a retreat from urgently needed reforms to address the housing crisis and preserve Welsh-speaking communities.

Christopher Taylor, 85, has run the St Davids Bookshop since 1974 and previously served as mayor of the city. He says the area has long relied on English second-home owners and tourists. “Second homeowners who have been regular customers over decades are selling up,” he told The Telegraph. “Tourists and second homeowners support jobs here, and we really can’t risk seeming unwelcoming.”

St Davids, Britain’s smallest city, is one of the jewels of Pembrokeshire’s coastline and a magnet for both walkers and surfers. But signs of change are everywhere. Lockboxes for holiday lets now pepper the streets—dubbed “tosau” or “pimples” by some Welsh speakers.

Grant Pratt, 38, who manages the surf shop Unsunghero, is frank in his assessment: “It’s small-minded,” he says of locals who complain about incomers. “Incoming English families have reversed the fate of the struggling local primary school. Who wouldn’t prefer to live somewhere bustling rather than full of moaning elderly Welsh folk?”

Tourism remains central to the local economy. In 2023, it generated £604 million in Pembrokeshire and supported more than 9,200 full-time equivalent jobs. Yet the tone of some public discourse, particularly online, has left business owners wary of being associated with anti-English sentiment.

One shopkeeper, who asked not to be named, said she feared a return to the “dark days” of the 1980s, when arson attacks by the nationalist group Meibion Glyndŵr targeted English-owned holiday homes.

At the luxury art-themed hotel Twr y Felin, General Manager Emma Bowen said that 85 per cent of their clientele are English tourists aged between 50 and 70.

While she supports the concept of a tourist tax, she insists it must be clear how the funds will be used. “Good examples are Germany, France, and Switzerland, where tourist taxes subsidise attractions and public transport for tourists,” she said.

In nearby Tenby, the impact of policy is also being felt. Lucas and Melanie Boissevain, who own the award-winning Penally Abbey Hotel, warn that mounting costs could become unsustainable. “We’ve had Covid, unfair competition from unregulated Airbnbs, rising staffing, power and food bills – all with little government help,” said Lucas. “Now come the levies that will add £6,500 a year to our operating costs.”

According to Lucas, Wales has lost 50 per cent of its serviced accommodation providers over the past 15 years. “This has been made up with a growth in Airbnb-style unserviced beds, but who wants to have a lockbox tourist economy, without breakfasts and the human touch?”

Despite government aims to channel second home tax revenue into affordable housing, some critics argue that the funds haven’t been used effectively. Without clear reinvestment and consultation, opposition to the levies may continue to grow.

More broadly, the proposed tourism tax across Wales has drawn both fierce criticism and cautious support. Industry groups and operators argue that it risks deterring visitors, threatening jobs, and weakening local economies—especially in areas like Pembrokeshire that are heavily reliant on tourism. Some families may opt to holiday elsewhere, fearing added costs, while others may cut back on spending in local shops, cafes, and attractions. A Welsh Government consultation found that 74 per cent of people who were likely to holiday in Wales believed the tax could put them off visiting.

Opposition politicians, particularly Conservatives, have branded the levy a “toxic tourism tax” that could damage a fragile sector. But supporters—including figures in Plaid Cymru and Labour—say the proposed fee, at just £1.25 per adult per night, is modest and commonplace across Europe. They argue it would raise much-needed funds for local infrastructure, including toilets, car parks, and footpath maintenance, and help ease the pressures of overtourism.

Following public feedback, the Welsh Government confirmed children will be exempt and has promised a full review of the tax’s impact within four years. There will also be further consultation with businesses and communities.

Across the UK, similar measures are being considered. From April 2024, three quarters of councils in England and Wales will introduce 100 per cent premiums on second homes, and some are extending these to Airbnb properties. Manchester introduced a tourist tax last year. Others, like Bournemouth, paused plans after backlash from the hospitality sector.

Pembrokeshire’s stance has made it a test case. With visitor numbers still recovering post-pandemic and an economy reliant on tourism, many locals are asking whether pushing away the English is a price they can afford to pay.

As one visiting mother from Bath remarked while enjoying tea at Penally Abbey: “It’s lovely here, isn’t it? Who really needs to get on a plane?”

That sense of quiet appreciation may be Pembrokeshire’s greatest asset. But it remains to be seen whether it can coexist with the cultural pressures that have driven the Welsh Government’s policies—and the resistance now rising against them.

• This article was based on a national newspaper report in The Telegraph which can be read here.