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Chamber and committees

Meeting of the Parliament [Draft]

Meeting date: Tuesday, January 16, 2024


Visitor Levy (Scotland) Bill: Stage 1

The Deputy Presiding Officer (Annabelle Ewing)

The next item of business is a debate on motion S6M-11871, in the name of Tom Arthur, on the Visitor Levy (Scotland) Bill at stage 1. I invite members who wish to speak in the debate to press their request-to-speak buttons, and I call Tom Arthur to speak to and move the motion. You have up to 10 minutes, minister.


The Minister for Community Wealth and Public Finance (Tom Arthur)

First, I thank the Local Government, Housing and Planning Committee for its work in examining the bill. I am pleased that a majority on the committee supports the general principles of the bill, and I thank all the committee members for the diligent and thoughtful way in which they have carried out their work and for the useful report that they have produced.

I also record my thanks to all those who have engaged constructively with us to improve and refine the bill, including members of the Parliament, businesses, local government and others who have an interest. I have welcomed the positive way in which they have engaged with the Government, and I will highlight some of the fruits of that engagement later in my speech.

The bill is an important measure. If it is passed, it will give local authorities a significant new power. Twenty-one of the 27 European Union countries already have some kind of visitor levy, and such a levy is commonplace in other locations throughout the world. I strongly believe that a visitor levy can be a force for good in supporting the visitor economy and bringing benefits to visitors, residents and businesses. It offers councils an opportunity to use the proceeds to invest in their local economies, thereby bringing benefits to residents and visitors alike.

Ivan McKee (Glasgow Provan) (SNP)

Talking to businesses makes it clear that the work that has been done on the bill is a real test of whether the new deal for business has traction. As the minister knows, concerns have been raised by the likes of the Scottish Tourism Alliance, the Federation of Small Businesses and others about the administrative burden, the complexity, the VAT threshold and many other issues.

However, specifically on the point about the contribution to local economies, what steps will be taken to include local businesses on committees that work with local authorities to make sure that the proceeds from the visitor levy are spent locally on things that will support the tourism economy?

Tom Arthur

I thank Ivan McKee for his close work, collaboration and input on the bill when he was Minister for Business, Trade, Tourism and Enterprise. I very much recognise the calls of the STA and others to look for ways in which we can maximise the input of business in determining the allocation of funds to support the visitor economy. I will return to those points later in my remarks.

International good practice that has been highlighted by the European Tourism Association tells us that local consultation is crucial to having a successful visitor levy. The bill will require a local authority to consult local businesses, communities, and tourism organisations. As Ivan McKee picked up on, good local engagement will be important in making sure that a visitor levy is well designed and that the funds that it raises will be used to best effect. I welcome the fact that the committee’s report emphasises that point, as well.

The committee’s report raises a number of issues relating to the provisions in the bill. The Scottish Government has provided a written response on those issues, but I will briefly address some of the main points.

First, the report raised the matter of the right basis of the charge for the levy. Under the bill as introduced, a visitor levy will be a percentage rate of the cost of accommodation, with the rate being set by the local authority. We have chosen that model for its simplicity and proportionality. It means that a levy will reflect visitors’ ability to pay and it will adjust automatically as prices change through the seasons.

The model also means that any visitor levy that is paid will reflect the type of accommodation—from five-star hotels to campsite pitches. However, we are aware of the calls from the industry and some local authorities to change the basis of the charge to a flat fee. A flat-fee model has its own merits, including ease of collection, but it sacrifices the fairness that is inherent in a percentage rate.

The committee’s report has called on the Government to work with stakeholders to agree a way forward. Today, I can confirm that we will engage with our local government and industry partners to consider the issue further, and we will confirm the Government’s position before stage 2 takes place.

Murdo Fraser (Mid Scotland and Fife) (Con)

The minister is talking about scope. Has he considered further the issue of camper vans? Does he have concerns that the levy is a tax on bricks and mortar? In many parts of Scotland—particularly around the north coast 500 and elsewhere—we see a shift towards use of camper vans which, as the bill stands, will be exempt from paying the tax, particularly if they wild camp, which carries problems in itself. Is there any way that the legislation might be amended to bring camper vans within its scope?

Tom Arthur

If Mr Fraser will indulge me, I will touch on that in my prepared remarks. Beyond that, I would be more than happy to engage with him further, following the conclusion of the debate.

The committee’s report notes that robust monitoring will be needed in order to understand the impact of any visitor levy that is introduced by a local authority. The bill already requires that a local authority report annually on the performance of the visitor levy in relation to its objectives, and to review formally the visitor levy scheme every three years. We believe that such local monitoring arrangements are appropriate, because they reflect the discretionary nature of the levy and are in keeping with the Verity house agreement. However, in the light of the committee’s report, we will explore with our local government partners the potential merits of taking a co-ordinated approach to monitoring.

On the definition of overnight accommodation, I know that there are strong views on the inclusion of moorings and berthings. I have been engaging with the marine industry to understand further its concerns and perspective. Following that helpful engagement, I can confirm that the Scottish Government accepts the committee’s recommendation to remove moorings and berthings from the scope of a visitor levy. I pay tribute to Stuart McMillan MSP, who has convened meetings to enable me to discuss the issue and hear the views of the industry. I look forward to working with Mr McMillan and others to address the issue at stage 2.

Another aspect of the bill that has raised strong views, which Mr Fraser touched on, is the treatment of motorhomes and camper vans. Under the bill as introduced, a visitor levy can apply to motorhomes that stay overnight on a campsite. Motorhomes or other vehicles that stop in other areas, such as private land, would not be captured.

The Scottish Government has considered carefully whether a levy or charge could be applied to include such activities. Discussions with council and land management stakeholders have highlighted significant issues with a levy on motorhomes, including potential difficulties in application, administration and compliance. I welcome the committee’s similar conclusions on that aspect, and I recognise its point that there might in the future be technological solutions that could allow a levy or charge on motorhomes to be developed. We will continue to engage with our partners and stakeholders on the issue, and we will consider any developed proposals that will work to support the visitor economy.

I turn to exemptions from paying the visitor levy. Under the bill as drafted, the visitor levy will not apply to those who use overnight accommodation as their sole or usual place of residence. That means, for example, that people who are homeless, or are at risk of homelessness, and those who are fleeing from domestic abuse will not have to pay the visitor levy. We recognise that there might be other instances in which a local authority believes that charging a levy would be inappropriate, which is why councils would be given the power to create their own exemptions when designing their levy schemes. I note that the committee has asked the Government to consider whether national exemptions should be created for children and young people, and I am happy to confirm that the Scottish Government will consider that suggestion further.

Fergus Ewing (Inverness and Nairn) (SNP)

We have spent an hour this afternoon debating the Horizon computer system. If the visitor levy is going to depend on either one computer system or up to 32 systems, has anyone has worked out how those are to be organised and paid for, how much that will cost and what little sum will be left for anyone else?

Tom Arthur

I am happy to assure Fergus Ewing that the business and regulatory impact assessment and the financial memorandum to the bill take into account what the broad cost of the legislation would be if it was enacted and utilised by local government. It would clearly be for individual local authorities to decide whether to proceed with a visitor levy.

We have undertaken to ask VisitScotland to convene an expert group, bringing expertise from industry and local government together to produce guidance and advice on best practice and implementation. That is partly to assist local authorities in ensuring that they have the most effective administration and implementation of a visitor levy, should they choose to proceed with one. I am, of course, happy to continue having conversations to determine where further harmonisation of the administrative approach between local authorities would be appropriate, while still allowing local authorities the policy autonomy to apply a visitor levy that is best suited to their particular area.

I note the comments from the committee on the lead-in time that will be required before a local authority can implement its levy. I appreciate the desire of councils that have already undertaken work on a visitor levy to use the new power as soon as possible. However, I am also keenly aware of the strong support from the hospitality and tourism industry for an 18-month implementation period, because that would give businesses the necessary time to put in place measures to collect the levy effectively.

That issue is of real importance to the tourism industry, and I have listened carefully to its arguments. The Scottish Government therefore considers the 18-month implementation period to be an appropriate length of time that will give businesses the time that they will need to adapt to any visitor levy that a local authority introduces—

Will the minister give way?

The minister is bringing his remarks to a close.

Tom Arthur

I have also noted the committee’s call for us to consider allowing funds that are raised by a visitor levy to

“be invested in services or facilities used by visitors travelling for business purposes”.

We have listened to local government and others on that point, and we will consider how the provisions on use of funds can best be refined at stage 2 to include services or facilities that are used by people who visit an area for business.

Minister, you need to bring your remarks to a close, please.

Tom Arthur

I come to my final point. As I said, we have recognised calls for a national cap on the levy rate, and we will consider that ahead of stage 2.

The visitor levy is a new power that will enhance local government and create opportunities to generate significant revenue for investment in our local tourism economies. It will be a discretionary power, should the legislation be passed.

I move,

That the Parliament agrees to the general principles of the Visitor Levy (Scotland) Bill.


Ariane Burgess (Highlands and Islands) (Green)

It is my pleasure to speak on behalf of the Local Government, Housing and Planning Committee in the stage 1 debate on the Visitor Levy (Scotland) Bill. I thank all those who took the time to provide evidence to us. We received more than 370 responses to our formal consultation, with a similar number engaging via our more informal online forum.

As part of our scrutiny, the committee visited Orkney and Aviemore to listen to the views of local stakeholders, including councils. In addition, parliamentary officials supported several engagement workshops that were held in Edinburgh and across the Highlands in order to hear the views of local communities. I thank all those who contributed to our scrutiny of the bill.

Turning to our stage 1 report, it is perhaps worth highlighting that, while the full committee signed up to many of the recommendations, there were a significant number from which Conservative members of the committee dissented. I am sure that they will elucidate their reasons for that later in the debate, and I look forward to hearing their contributions.

Given the time available, I intend to focus my comments on three key themes of consideration for the committee: the appropriateness of a significant degree of local autonomy around whether and how to implement the levy; the issue of whether a percentage rate or flat-rate charge would be most appropriate; and the ways in which revenues that are raised from a levy should best be invested to the benefit of visitors and local communities alike.

As members will know, similar levies have been in place for some time throughout Europe and in other parts of the world and appear to have been successful in generating revenues to help to improve the experience of visitors to popular destinations. It was suggested by some stakeholders that the introduction of a levy in Scotland could deter tourists from visiting, but, having reflected on the evidence in detail, the committee considered that, on balance, the introduction of a levy at a modest rate would be unlikely to have a significant deterrent effect on visitors, given the unique nature of Scotland as a destination and the experiences of other jurisdictions where a levy has been introduced.

It is worth noting that, given that the bill is enabling legislation, local authorities would not be obliged to introduce the levy. Indeed, it appears likely that only relatively small numbers of councils would do so in the first instance. The bill also provides for a high degree of flexibility in how a levy could be implemented, should a council choose to do so. That approach was broadly supported by local authorities as being in keeping with the principles set out in the Verity house agreement. However, representatives of the tourism and accommodation sectors generally preferred national consistency, with one stakeholder suggesting that parts of the bill amounted to “localism for localism’s sake”.

Having considered those opposing perspectives in detail, the committee recognised that there were persuasive arguments in favour of a local approach as well as for national consistency. However, on balance, the majority of members of the committee were persuaded that local government should have the flexibility to design an approach that is best suited to local circumstances. Remaining mindful of the concerns of many stakeholders, we highlighted the importance of robust monitoring to ensure that negative impacts for businesses and others can be addressed, should the need arise. We welcome the Scottish Government’s recognition of the benefits that a co-ordinated monitoring approach could bring and its commitment to discussing the matter further with local government.

Turning to the rate at which a levy would apply, the bill provides that it would be a percentage of the total accommodation cost, which would be set by the local authority. Again, many local authorities welcomed the flexibility that that would bring to councils, although others preferred a flat rate for administrative ease. The tourism and accommodation sectors overwhelmingly favoured a flat rate, with the Scottish Tourism Alliance arguing that a percentage model would be overly complex and excessively burdensome for certain types of accommodation providers and visitors. Conversely, we heard compelling arguments about proportionality from other witnesses, with the European Tourism Association suggesting that it is hard to justify someone who is staying in budget accommodation paying the same amount as someone who is staying in high-end accommodation.

As is noted in our report, deciding what is the right approach was perhaps the most challenging aspect of our consideration of the bill. We recognise that there are strong arguments for and against having a percentage or having a flat rate, and we note that both approaches would inevitably bring their own benefits and challenges. For that reason, we invited the Scottish Government to undertake further work with stakeholders before stage 2 to reach an agreed solution. I welcome the Scottish Government’s commitment—which we heard from the minister—to reflect on that further ahead of stage 2. However, I would welcome hearing from the minister in summing up that such further reflection will involve consultation with all the key stakeholders.

The third and final theme that I intend to discuss today relates to how any revenues raised through a levy should be invested. The bill provides that any funds raised from a visitor levy should only be used to support the objectives of a visitor levy scheme, which

“must relate to developing, supporting or sustaining facilities or services which are substantially for or used by persons visiting the scheme area for leisure purposes.”

Again, it would be for local authorities, in consultation with local stakeholders, to decide exactly how revenues are spent to support those objectives. The tourism sector broadly welcomed that definition, and the Scottish Tourism Alliance explained that

“it is only fair that the money raised is reinvested in tourism.”

Of course, there are many facilities that are used by visitors to an area and local residents alike. The committee supports decisions on spend being taken at a local level and agrees that the definition is broad enough to allow flexibility in spending priorities, following consultation with local stakeholders, while ensuring that investment corresponds to the priorities of local tourism and accommodation businesses.

However, although we generally support the criteria for investing revenues, we also listened to stakeholders who highlighted the economic importance of business visitors. The Edinburgh Hotels Association told us that business events alone are worth £2 billion to the Scottish economy. I am pleased that the Scottish Government has committed to amending the bill so that funds can be invested in services or facilities that are used by visitors travelling for business purposes as well as by those doing so for leisure.

I want to add another note on the berthing and mooring position in the bill. I am glad to hear that the minister has taken that point on board.

Time does not allow me to cover all the areas that the committee considered at stage 1, but I look forward to the contributions of other members in the debate. I conclude by noting that the majority of members of the committee supported the general principles of the bill and stand ready to work constructively with the minister at stage 2, should the Parliament approve the bill’s general principles at decision time.


Miles Briggs (Lothian) (Con)

I thank the clerks of the Local Government, Housing and Planning Committee for the work that they have put into our consideration of the bill and the many organisations that have provided helpful briefings ahead of today’s debate.

We should rightly be proud of and celebrate our outstanding tourism sector in Scotland. The visitor offer that tourism businesses across Scotland provide is world class, and the importance to our local and national economy is significant and must not be underestimated or undervalued. Tourism is estimated to be worth £4.5 billion to the Scottish economy. It directly supports more than 250,000 jobs across the country, importantly in some of our most economically vulnerable rural and island communities.

Many tourism businesses in rural Scotland have not fully recovered from the impact of the pandemic and have, in recent years, faced a period of significant additional costs on their businesses. It is therefore understandable that many tourism businesses are concerned about the impact that the bill will have on their business and the wider tourism sector, especially those small businesses that, under the bill, are set to become tax collectors and be responsible for and—perhaps more important—liable for the policy. The bill could also lead to smaller businesses being pushed over the VAT threshold unless the visitor levy tax is classified as non-taxable business income, as Ivan McKee touched on.

A small self-catering business stated in its response to the Local Government, Housing and Planning Committee’s consultation:

“Having experienced the stress and evident on-going confusion regarding the short-term let legislation, with all 32 versions of rules and pricing and different interpretations of the law, I am afraid that the same fiasco will be repeated with the visitor levy.”

I hope that the minister is taking on board the concerns that have been expressed to the committee.

Many witnesses have stated during the evidence sessions that this is not a tourist tax but another accommodation tax. In the time that I have today, I want to outline several areas in which I hope that the Scottish Government will consider supporting important amendments as we move to stage 2. I note the Scottish Government’s response to the Local Government, Housing and Planning Committee’s stage 1 report. The Scottish Government states that it is still considering options around the merits of a flat percentage rate, and I welcome the comments that we have heard. However, industry must be at the heart of the decision, and I hope that the proposals that the STA has put forward will be considered by ministers.

If the bill is passed, it is important that we introduce a national set of exemptions so that certain groups are not forced to pay additional charges. The current voucher proposal in the bill is simply not fit for purpose, and the bill as it stands is weak and does not present a clear framework for how exemptions will operate. The bill needs to make available a defined set of national schemes.

Will the member give way?

If I can get some time back, I would be happy to take an intervention.

The intervention should be very brief, please.

Miles Briggs has spoken about national exemptions. I am happy to have a conversation about that. What is his party’s position on the discretion for local exemptions?

Miles Briggs

If we can get the national exemptions right, local exemptions will not be needed. It is a question of ensuring that those are included in the bill. Over the time that we have had in committee and in the limited time that we have had today, there has been an emerging consensus that the voucher scheme will not provide for that and that having those exemptions in the bill is important.

It would be unfair to capture some of the most vulnerable people in our society in the bill, which will be the case if there are not exemptions for people visiting children or family members in hospital or hospices, people visiting a family member in prison, business travellers, including actors and stage support staff, and people staying in an area for work reasons—for example, people who are working on renewable and net zero projects.

The Scottish Conservatives want to see workable solutions embedded in the bill. It is clear, as the minister has already acknowledged, that exemption schemes are in place across Europe and have been at the heart of different bits of legislation in different parts of Europe. In almost all schemes, children are exempt, and many also provide a clear list of additional groups that are exempt from paying the tax—for example, residents who reside in a local authority area, children and school and further education groups, and disabled people. I welcome the potential exemption that the minister has pointed towards. In practically every country in which a tourism levy operates, children under 18 are exempt. In Portugal, an exemption is made for people under 23.

As the Federation of Small Businesses stated in its briefing, there is concern about potential variation and a total lack of detail about how the exemptions will be applied and administered by businesses. That is why the Scottish Conservatives will lodge a number of amendments at stage 2 to try to ensure that clarification is provided and the necessary provisions are included. I hope that ministers will engage positively on that important issue. The bill might not come into force until spring 2026, but ensuring that those exemption schemes are built into the models and systems that are needed from the outset must be a real priority.

Finally, with other bills in recent years, such as the short-term lets bill, we have seen significant problems and costs faced by local authorities and businesses. The Association of Scotland’s Self-Caterers is right to say that the visitor levy expert group needs to provide detailed answers and mechanisms for the bill to operate effectively in a uniform way in the councils that decide to take the policy forward.

As things stand, there is a significant vacuum in many areas of the bill, and we must see details developed to provide clarity and help the tourism sector to limit the costs and negative impacts that the bill will have on its businesses. That is why the Scottish Tourism Alliance has made an urgent call for absolute clarity to be provided in the bill. I agree.

Our Scottish tourism sector already faces tax burdens that are among the highest that are faced anywhere in the world. I think that the tourism sector has accepted that the bill will be passed, with Scottish National Party, Green and Labour MSPs supporting the concept. However, the devil will be in the detail and, at present, that has not been provided for the bill.

The Parliament is developing a bad reputation for passing poorly drafted legislation. We cannot allow that to be the case for the Visitor Levy (Scotland) Bill and the measures that will be brought forward and administered, especially for small businesses such as bed-and-breakfast accommodation and guest houses, many of which do not currently operate an information technology system but will be forced to do so by the bill.

To conclude, we are opposed to the SNP-Green Government’s plans to introduce the measures in the Visitor Levy (Scotland) Bill. We believe that the bill could have a significant negative impact on an industry that has suffered, especially during the pandemic. We want to ensure that ministers listen to the concerns that have been raised and do all that they can. I genuinely hope that, in a spirit of consensus, ministers will reach out beyond the parties that support the bill in an effort to ensure that we put things right. I have led many conversations about the exemption schemes in the committee. I want to ensure that that is taken forward.

Ministers have stated that the purpose of a visitor levy is to generate revenue for local government in order to support and maintain tourism-related infrastructure, services and amenities. However, we are still not clear about how those funds will be ring fenced to help to achieve that. Who will take forward the decision making on where the moneys are spent?

In the coming weeks, Scottish Conservatives will work to try to limit the damage that the bill might cause our tourism businesses and to improve the bill by making it fairer and limiting its impact on those who might be captured by it, such as people who are visiting loved ones in hospital, young people, those who are on education visits and vulnerable families. I hope that we can work across the Parliament to take that forward to stage 2 and finally to stage 3.


Mark Griffin (Central Scotland) (Lab)

We welcome the debate and support the bill’s general principles. The power for councils to implement visitor levies that will help to pay for services that support tourism is long overdue. For the best part of a decade, we have called for that here and in council chambers across the country.

I thank the clerks to the Local Government, Housing and Planning Committee and all the organisations that gave evidence on the issues that the prospect of the new levy raises. The concept is simple, but the detail quickly becomes complex, and many competing arguments have been heard. The complexity of the debate has underlined how key tourism is to Scotland’s economy. It is right that we all understand that the bill must achieve a balance between supporting sustainable tourism, promoting economic growth and funding investment in local services.

As with the council tax surcharge on second homes and the licensing scheme for short-term lets, there will be far more rationale for a visitor levy in some parts of the country than in others. The benefits to Edinburgh or the Highlands are clear, but, as I have mentioned in previous debates, not all of Scotland is visited equally. In my region, Lanarkshire has just nine hotels for every 100,000 people, while Lothian has 29 hotels for that number. Whether a tourist tax is a useful tool for all councils will be for them to determine. As the bill team has said, only four councils have expressed interest so far.

Many issues need to be addressed at stage 2. Ensuring that implementation of the powers is not overly onerous or impractical for businesses or local authorities is important. The committee came to the view that a levy would be unlikely to deter visitors significantly.

Throughout our recommendations, we emphasised again and again that robust monitoring and reviews were needed to be sure that the powers were being used in a transparent and accountable way, which would address the concerns that were expressed about the impact on businesses and visitor numbers and about how the funds would be spent.

The bill requires funds to be spent on

“developing, supporting or sustaining facilities ... for leisure purposes.”

Such hypothecation runs counter to the Verity house agreement, and the Convention of Scottish Local Authorities and councils have argued against ring fencing or excessive regulation. However, the tourism sector prefers greater prescription. It says that, if its clients and customers are to face additional charges, investment in the facilities and amenities that visitors and residents use should be prioritised.

Labour members support the clear sentiment that the revenues cannot be used to undermine or further cut budgets. Campaigns for a levy have long identified culture and leisure budgets that need to be propped up, but the Scottish Government must not legislate to force councils to plug gaps by spending funds from the levy. Aberdeen City and Shire Hotels Association said that the funds

“cannot be used to replace core services.”—[Official Report, Local Government, Housing and Planning Committee, 24 October 2023; c 41.]

The Association of Scotland’s Self-Caterers made it clear that, if that happened, the sector’s support would be lost completely. The committee’s view was that funds should be kept in separate accounts and should be considered additional to existing funding streams.

When we go beyond the initial idea of creating a new tax or levy, the complexities start to become obvious. Concern about whether the measure will be a tourist tax or a visitor levy was raised frequently in the evidence that the committee heard.

Craig Hoy (South Scotland) (Con)

Does the member not accept that, given the extreme financial constraints that our councils are operating under presently, what is given to them with one hand, through the levy, is, in reality, likely to be taken away with the other?

Mark Griffin

Mr Hoy emphasises my point: the levy cannot be a substitute for a reduction in the general revenue grant to local authorities and it cannot be about plugging a gap. Any revenue that is raised must be used to improve the tourism offer and the services that tourists appreciate and visit Scotland for. It cannot be used for back-filling existing funding gaps, and the Scottish Government should commit to reversing those before we even look at the levy. Without that, we will lose the sector’s confidence in the levy.

Many witnesses have said that the levy, in its simplest form, is an accommodation levy, with the chargeable event being when someone enters overnight accommodation for a stay. We have heard from the likes of Outer Hebrides Tourism, Visit Arran, Argyll and Bute Council and Highland Council about how that definition would not levy day trippers or those who are on cruise ships, driving camper vans or wild camping. One of the unintended consequences could be the incentivisation of more day trippers, and we should keep an eye on that.

A remaining fundamental issue of disagreement is whether the bill should dictate the charging framework for the levy, and whether the charge should be a percentage or a flat rate. Glasgow City Council and East Lothian Council have said that they prefer a flat rate, while West Lothian Council, South Lanarkshire Council and City of Edinburgh Council prefer a percentage. Edinburgh’s preference is informed by the need to take account of price fluctuations throughout the season and to progressively levy the broad range of accommodation, from budget to luxury.

FSB Scotland has said that its members were split on the differences, and the Convention of Scottish Local Authorities has called for there to be a general power for councils rather than the levy and the levy mechanism being defined in primary legislation. A tiered flat rate is also proposed as a progressive but simplified option that could be prescribed in the legislation.

There was also extensive concern about the complexity of implementation and collection of the levy, because the accommodation owner would be the person who is liable for collecting levies and paying the sum to councils. That could be very complex for small and micro businesses. The committee agreed that the burden should be kept to a minimum, and—

Mr Griffin, could you bring your remarks to a close, please? Thank you.

Mark Griffin

—we look forward to getting feedback from the expert group at stage 2.

We have proposed a similar levy in previous manifestos. We have identified that it could be a key part of the fiscal framework and for the democratic accountability of local authorities. For those reasons, we support the principles of the bill at stage 1.


Beatrice Wishart (Shetland Islands) (LD)

This evening, Scottish Liberal Democrats will offer conditional support for the bill at stage 1. However, there will need to be substantial changes, including on making the levy applicable to cruise ship passengers—I will speak more about that later—if we are to vote for the bill at stage 3.

Scottish Liberal Democrats agree with the principle of allowing councils in areas with high tourism demand the option of introducing a levy in order to invest in local infrastructure and services. Local authorities have their backs against the wall and will need options to protect budgets for key local services. Liberal Democrats believe in empowering people and communities. We therefore believe that local authorities should have the power to introduce such a levy if they so choose.

Some local authorities—Edinburgh, for example—are very keen to be able to make use of the powers as soon as possible. However, there are concerns even in Edinburgh about the omission of cruise ship passengers from the levy. The loophole is problematic for councils across the country. It introduces an inherent unfairness that needs to be addressed before any legislation is in place.

The northern isles have a growing cruise ship sector. We offer a warm welcome and recognise the contribution to the local economy through bus tours, tourist guides and visitor attractions. However, with alarming speed, the population of some towns can seem to double, especially when several cruise ships visit on the same day. Up to the end of September, almost 124,000 visitors arrived in Lerwick in 2023. In comparison, a little over 58,000 people visited the previous year, so there was a significant bounce-back from the pandemic period.

Some day trippers travel across the islands. Addressing the impact of visitors on infrastructure—increased levels of maintenance might be required, or there might be the need for more public toilets, for example—falls to the local authority. There is also increased pressure on health services, including general practitioner services, pharmacies and hospitals. It is therefore unfair that day trippers would be exempt from the proposed visitor levy whereas anyone who stayed in accommodation on land would be obliged to pay it. A hotel guest in Shetland, who would pay the levy, would be far more likely to remain on the islands for longer but would have a smaller impact on local services while, at the same time, contributing more to the local economy. The unfairness to hotels, self-catering accommodation and other similar accommodation is therefore clear to see.

That is, I presume, why cruise ship passengers pay the visitor levy in Spain and the Netherlands. If it is possible for those people to be included there, why is it not possible here? I hope that the minister will consider extending the levy to people on cruise ships. That would make any levy more relevant and potentially applicable in the northern isles, but it would also be relevant to Edinburgh, where people on cruise ships that were moored at Queensferry or Leith could also contribute to the levy. As things stand, they would be exempt from it. The Law Society of Scotland’s briefing flags the need for greater guidance to clarify the scope of the definitions of “chargeable transaction” and “overnight accommodation”, so the inclusion of people on cruise ships needs much greater thought.

I take this opportunity to thank Scottish Land & Estates for its briefing ahead of the debate. I echo SLE’s praise for the resilience of the tourism industry as it continues to recover from the Covid-19 pandemic, which effectively brought the industry to a standstill. We need to ensure that the strong and united message that is sent out as we debate the bill is that tourism remains a key part of our economy and cultural offering and that the policy’s intention is not to reduce the number of tourists who visit all parts of Scotland. To ensure that administrative burdens on small businesses are not too great, SLE recommends that returns to local authorities should take place only twice annually, and it highlights that a levy based on a fixed monetary sum rather than a percentage would be beneficial. SLE also points to concerns that smaller accommodation providers could find themselves in a position in which the levy forces them to go over the £85,000 VAT registration threshold. That would create even greater costs for smaller operators if the levy was classed as income for their business, which, of course, it would not be.

My party is minded to support the bill at stage 1, but we give notice that there will need to be changes, particularly the closing of the loophole relating to cruise ships, in order for us to be able to vote for it at stage 3.

We move to the open debate.


Willie Coffey (Kilmarnock and Irvine Valley) (SNP)

I thank the convener, who captured the issues very well on behalf of the Local Government, Housing and Planning Committee, and our clerks, who steered us through some choppy waters during our consideration of the bill at stage 1.

The visitor levy proposal has been around for a while, and it is part of the new deal that offers councils more powers, more flexibility and the opportunity to raise extra revenue locally to support their tourism offer. At our committee meeting this morning, the Minister for Local Government Empowerment and Planning indicated that the levy could raise an additional £35 million for local councils if the power is used.

Indeed, as the convener said, visitor levies are reasonably common across Europe, and they appear to be a successful tool in helping to improve the visitor experience. In fact, we might have been unaware that we have paid such a levy ourselves if we have been abroad. As has been mentioned, City of Edinburgh Council has been asking the Government for a tourism levy for some years and is keen to get on with introducing it, as are other councils.

Daniel Johnson

I agree that we often pay such levies when we are on holiday abroad and that they are prevalent. However, in many jurisdictions in which there is a levy, VAT is not applied or is applied at a different rate. It is important that we are clear about that point of comparison so that we are comparing apples with apples. Does the member acknowledge that point?

Willie Coffey

I definitely acknowledge that. The minister has said in his responses to the committee’s questions and in writing that there is an open door to discuss many of those issues at stage 2 and beyond.

Councils will not have to use the power but, if they do, they will be able to apply it across their whole council area or to parts of their area that they consider to be appropriate for the levy. It will apply to overnight accommodation, and quarterly returns will be made to the local council as part of the management of the levy.

As a few members have mentioned, the biggest debating point was whether the levy should be a percentage or a flat rate. It is fair to say that we heard some good, if opposing, arguments in favour of both. Our committee did not come down in favour of one approach over the other, but I note the Government’s response that it considers the percentage rate to have the edge, given its more progressive nature and that it would reflect any changes in pricing. A percentage approach also helps us to avoid the question of whether it is fair that a flat rate should be the same for a five-star hotel as for a B and B. However, the issue is not settled, and the Government has committed to confirming its position before stage 2, as the minister said in his opening remarks.

Keeping things as simple as possible seemed to be the watchword of everyone who gave evidence. We got into detailed discussion about whether local flexibility might sometimes contribute to confusion. For example, everyone agreed that councils should have scope to design their own schemes to fit their area, but there should also be a balance between local discretion and standardisation at national level. In terms of rate setting, councils will be able to set a different rate for different areas, but they will not be allowed to set different rates for different types of accommodation. The aim of that is to try to keep a level of standardisation in place, and I hope that it is viewed as a reasonable compromise.

Another interesting development during our consideration of the bill was the minister’s announcement that cruise ships will fall within the scope of the bill. Our colleagues from Highland Council reminded us that the area has 325,000 cruise ship visitors every year and that even a small disembarkation charge could make a huge difference in some of the area’s remote communities. I know that the Government is working on that matter and may seek to amend the bill if it can carry out the work and consultation in time, but, as I understand it, the Government will not delay the bill if that is not possible.

The committee also considered whether the Government should include within the scope of the bill camper vans, motorhome users and the delightfully titled wild campers—there may be one or two wild campers in the chamber today. COSLA’s wise response to that was that the cost of collecting the levy in such situations would probably far outweigh the advantage of collecting it in the first place. I imagine that those will not ultimately fall within the scope of the bill, but the minister can clarify that in summing up.

A recurring theme throughout was how the public and our tourist visitors will be able to see tangible benefits of the levy over the years. The risk is that any revenue that is accrued as a result of the levy might disappear into broader council service delivery, but the bill states clearly that the requirement is that the money will be directed towards tourism and leisure services. That inevitably takes us into local accountability, and I am pleased that the Government will consult further with COSLA to develop evaluation indicators, which will also enable the public to assess whether the levy is delivering for their communities.

I really enjoyed doing this piece of work with the committee and hearing the many and varied opinions on the visitor levy and whether it will work. Time will tell, of course, and I am not sure whether my local authority, East Ayrshire Council, will ultimately take up the power. I look forward to the rest of the debate and the contributions from all members, but particularly those from my committee colleagues, who contributed a great deal to the production of the report, which will help to take forward the bill, should Parliament agree.


Pam Gosal (West Scotland) (Con)

I am delighted to contribute to the debate from the Scottish Conservative benches. As a member of the Local Government, Housing and Planning Committee, I, too, thank the clerks for all the hard work that they have done. I also thank everyone who attended the sessions to provide evidence. The contributions of witnesses were hugely valuable in informing my recommendations on the report. My colleague Miles Briggs and I were often in a minority opinion on the committee’s report and, in today’s debate, I intend to set out why.

First, I was and still am sceptical about the aims of the Visitor Levy (Scotland) Bill. In truth, it appears to be a consolation prize for local authorities. Local government has suffered from years of underfunding by the Scottish Government, so, as a concession, the Scottish Government will provide it with power to generate additional revenue.

Will the member take an intervention?

Pam Gosal

Can I just continue for a little bit? I will then come back to Ben Macpherson.

That would not have been necessary, of course, if local government had received a fair funding deal in the first place. Over the past two months, I have spoken directly with representatives of around 24 local authorities.

Will the member give way?

I will come back to Ben Macpherson when I get a minute.

Very good—it is on the same thing.

Pam Gosal

Although some authorities welcome the additional revenue that the levy could raise, the majority of councils see no benefit in imposing a visitor levy and would gain very little revenue by doing so. Yes, the bill will ease pressures on some councils, but it instead dumps pressure on to accommodation providers. Conservative members will not stand idly by and watch even more burdens being placed on businesses.

When I asked, at committee, whether the extra cost on business could be justified, given the already high costs of doing business in Scotland, Fiona Campbell from the Association of Scotland’s Self-Caterers was quite right when she said:

“it is the absolute last thing that the small accommodation and self-catering sector needs.”—[Official Report, Local Government, Housing and Planning Committee, 24 October 2023; c 5.]

So was David Weston from the Scottish Bed and Breakfast Association, who said:

“The tax certainly lands heavily on very small businesses such as B and Bs and self-catering accommodation operators, because they will have to collect it ... B and Bs will have to invest and spend money to adapt their accounting systems to collect the tax, so a cost will be incurred in collecting it.”—[Official Report, Local Government, Housing and Planning Committee, 24 October 2023; c 10.]

I am happy to take an intervention from Ben Macpherson now.

Ben Macpherson

The member has moved on somewhat in her arguments, but will she acknowledge that, although they are also calling for more funding from central Government, local authorities represented by COSLA have consistently argued for having more tax-raising and fiscal powers? As far as I am aware, they have consistently welcomed the proposal.

Pam Gosal

We absolutely welcome more powers going to local authorities—and that is what the Verity house agreement is about. However, we must ensure that we do not put burdens on our businesses in that regard. We must also consider the disparity. I spoke to representatives of 24 local authorities, and although some authorities—very few of them—have said yes and welcome the proposal, a lot of them do not. A big disparity is created straight away, with the collection of visitor levy, between one authority and another, so we need to get the bill right and take businesses with us. We should ensure that there is a fair funding settlement for local authorities.

Further concerns were raised by Stacey Dingwall from the Federation of Small Businesses, who spoke about how some FSB members were anticipating that they would

“have to absorb”

any potential costs

“because it will be too difficult for them to administer the charge.”—[Official Report, Local Government, Housing and Planning Committee, 24 October 2023; c 12.]

If members decide to support the general principles of the bill today, I will be lodging amendments at stage 2 that reflect the concerns of businesses. One change that is needed is the introduction of a flat-rate levy. A percentage-rate levy would be extremely complex to collect and difficult for consumers to understand. I have found, after speaking at length to representatives of so many local authorities across Scotland, that the majority of councils that intend to introduce a levy would be open to introducing it as a flat rate. That would help to minimise the burden on local businesses, and we should therefore consider whether doing that would be less complex, with delivery under a national scheme with a set cap.

Will the member give way?

I do not think that I can—unless I can have the time back.

There is no time in hand, but a brief intervention from the minister might work.

If it is brief, yes.

I am grateful to the member for giving way.

Is the member’s proposition for a flat rate with a tiered structure, as has been suggested by industry?

Pam Gosal

A lot has been suggested on whether the levy should have a tiered system or should be a flat rate. A flat rate would be much easier for businesses, and its collection would be much easier to introduce. The Government needs to understand something from businesses, however, especially those using websites. Can members imagine a business having to state one percentage rate for one local authority area and another flat rate for another local authority area? How would the levy be collected by that one business via its website? We need to consider the mechanisms for that in much more detail.

I also think that it is fair to say that the alternative models were not considered. I firmly believe that there would have been merit in exploring models such as the Manchester Accommodation Business Improvement District in more detail. That would have allowed businesses to invest collectively and improve their trading environment, which is a sure-fire way of improving tourism offerings from those who know the industry best. However, that would not make up for the funding shortfalls in the local government settlement, so it is hardly surprising that members on the opposite benches were not attracted to that option.

I will vote against the visitor levy at decision time. On top of an already crowded regulatory environment, it would effectively shrink the sector and then tax it on top. All of that is despite how much our tourism industry contributes to the economy. Councils need extra ways of generating income, but the bill is not the right way to achieve that. We cannot allow Scottish businesses to become unpaid tax collectors for local authorities—

The Deputy Presiding Officer

Thank you, Ms Gosal. We do not have any extra time, and I have given back the time taken for the intervention. We do not have any time in hand and I was generous with the time that was taken for the intervention. We now must move on.


Stephanie Callaghan (Uddingston and Bellshill) (SNP)

As I am a newer member of the Local Government, Housing and Planning Committee, it is a pleasure for me to contribute to today’s stage 1 debate.

Scotland, in all its glory, is rightfully recognised as a global tourism gem. It is the home to serene lochs and picturesque glens—not to mention the internationally acclaimed Edinburgh fringe festival.

Some of my most cherished memories are of visits to Luss, where we thoroughly enjoyed camping on the bonnie banks of Loch Lomond and paddle boarding. I am sure that many members share similar experiences. I suspect that I am the wild camper that Mr Coffey referred to earlier.

There is no doubt that the tourism sector has weathered significant financial challenges in recent years. It is therefore crucial that we empower local authorities with the necessary tools to grow our tourism sector and preserve Scotland’s position as a world-leading destination. A well-designed visitor levy can support that aim.

We do not have to look very far to draw inspiration from European neighbours, including Germany and France, and Barcelona’s tourism policy has been described as world leading. Scotland is well placed to harness the positive impacts that a similar levy could bring for our visitors, local businesses and residents alike.

The bill marks a significant step towards the Scottish Government’s ambition of fiscally empowering local government and strengthening local democracy, in line with the Verity house agreement. However, to guarantee the effectiveness of the funds that are raised, local government must lever in the opportunity to build strong relationships with communities, local businesses and tourism organisations, and it must ensure that their voices are at the very heart of decisions and spending priorities in order that they align with local needs, as Ivan McKee mentioned.

As an exemplar, the Scottish Government has already demonstrated a commendable working relationship during the consultation on the bill, as has been noted by the Scottish Tourism Alliance, which praised the high level of engagement of the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy and the Minister for Community Wealth and Public Finance—in particular, their receptiveness to industry requests.

In order to ensure that those strong working relationships continue, I support the committee’s recommendation to actively monitor and measure unfavourable impacts that arise from local flexibility, because that proactive approach will support prompt and effective addressing of issues as they emerge.

In the bill’s current form, councils are empowered to impose a levy on overnight stays as a percentage of accommodation costs. However, concern that has been raised by UKHospitality highlights potential challenges for businesses, particularly in respect of package deals, in which separating accommodation costs might be problematic. Concern was also raised about potential manipulation of charge allocation in order to keep costs low and entice visitors. In response to those concerns, insights from the Scottish Government on addressing potential gaming of the system and challenges in isolating chargeable transactions from packages would be welcome as we progress.

To build on that, although the Scottish Government understands that a percentage rate is the most appropriate basis for the visitor levy, in our evidence sessions stakeholders also made strong arguments in favour of a flat rate or a tiered rate. For instance, the flat rate was praised for its simplicity of administration and enforcement, although the European Tourism Association rightfully highlighted that it is hard to justify charging the same fee for budget and high-end accommodations.

Both approaches have their benefits and challenges, and I agree with the committee’s view that the Scottish Government must engage in further collaboration with the tourism sector, local authorities and key stakeholders in order to “reach an agreed solution.”

I recently found an inspiring article about grass-roots organisations empowering women to embrace the great outdoors. That sense of adventure really resonates with me. During evidence taking, our committee delved into discussions on the visitor types that are covered by the bill and whether they should include wild campers. Although my own wild-camping experiences—that is, in a tent—have been environmentally and socially considerate, Highland Council’s concerns about post-lockdown visitor surges straining local services and rural infrastructure are valid.

I appreciate the reasons for wishing to include wild campers in the bill. However, tent camping is often a more affordable alternative for family holidays, and implementation might be difficult. Perhaps that is reflected in the fact that other countries do not include wild campers in such legislation. I appreciate the points that the minister made earlier in the debate on the issue.

As for my area, Lanarkshire might not immediately spring to mind as a top tourist destination, as Mark Griffin pointed out earlier. However, I am a bit more positive, and I think that we have quite a bit to shout about, including M&D’s Scotland’s theme park; the captivating Hamilton mausoleum and museum, which is surrounded by an extraordinary site of special scientific interest that is teeming with rare flora and fauna; and, nearby, the new outdoor wheeled-sports facilities in Strathclyde country park.

I am really eager to see how local authorities harness their powers to strategically enhance my area and Scotland more widely. Although challenges will undoubtedly arise, the efficacy of the legislation hinges on the empowerment of local authorities to make local decisions that meet local needs. However, it is imperative, as has been said, that those decisions are fuelled by the invaluable perspectives of local businesses, tourism organisations and our communities.

I agree with the general principles of the Visitor Levy (Scotland) Bill and urge members to vote in favour of its passing stage 1 today.


Sarah Boyack (Lothian) (Lab)

I very much welcome the bill. I want to place on record my thanks to the committee for its stage 1 scrutiny of the bill and to the stakeholders who took part in the process. I thank the minister for his early engagement with me on the bill, including the meeting that I had with him and the leader of City of Edinburgh Council last year.

I am particularly pleased to see the bill, because I started working on the issue in session 4 of the Parliament and I know that our local authorities have been lobbying for this additional power for some years now. I hope that we will see in Scotland a power that is already extended to localities and cities right across Europe, and which will enable our local authorities to get active on the issue, if they want to use the power. That is the key thing. Last year, I visited Vilnius, the capital of Lithuania, and I noticed that there was a visitor levy in place only when the bill was being paid.

There is a lot that can be agreed on across the chamber, but scrutiny at stage 2 will be very useful to ensure that the bill will work to maximum advantage. For example, I am concerned about the wording of the bill in section 17 on restriction of the “Use of net proceeds” in

“developing, supporting and sustaining facilities and services”

that are used by visitors for “leisure purposes”. That could be problematic.

In Edinburgh, for example, we definitely welcome visitors to our city. It is an absolutely key part of our economy and of who we are, as a city. However, there is sometimes a tension for residents from the impact of our successful visitor economy due to the numbers of people who visit. Residents and visitors often use the same infrastructure and services in Edinburgh, and, at peak times in the year, residents often experience challenges with services being at full capacity or impacts on street cleansing, for example. Let us have a bit of a debate at stage 2 about the words “leisure purposes”, because we do not want unintended consequences for local authorities.

Another issue, which was raised today very effectively by Ariane Burgess, was heard in the evidence from the Edinburgh Hotels Association, which fears that visitors who come to Edinburgh for business and corporate purposes are being forgotten. That is a huge part of our Scottish economy, and we have a number of superb conference and corporate venues across the city. It is important that we do not miss out on that significant proportion of our visitor economy.

We want to address any tension between residents and visitors. Especially in Edinburgh, bus services, parks, open spaces and street cleansing are all services that are used by both groups. It is important to ensure that those services are fit for purpose, although one would not necessarily call them leisure pursuits. We could easily rectify that, so I hope that the minister will reflect on the matter today, and in advance of stage 2.

We could also do some additional thinking about the work that was referred to by Mark Griffin and Craig Hoy. There have been severe cuts to local authorities in the past decade, so we should not underestimate the importance of even a modest visitor levy in enabling local authorities to improve the services that relate to visitors, and to strengthen our tourism economy. As long as it is not overly prescriptive, effective guidance from the Government and the advisory group could help local authorities, which must be able to use the new powers effectively to address their local circumstances. For example, Beatrice Wishart and Willie Coffey made good points about cruise ships.

One question that I have already raised with the minister, and that has come up a couple of times today, is about how long it will take to implement the bill. I know that the council in Edinburgh has done a lot of consultation work and has engaged really constructively with the business and tourism communities. I note the committee’s comment that the 18-month lead-in time is excessive. The minister pushed back on that today. My plea is that we get on with this, because the bill could make a real difference. For the local authorities that want to use the power, the bill is a real opportunity to support both our visitor economy and our residents. I am keen to see the bill pass stage 1 today.


Marie McNair (Clydebank and Milngavie) (SNP)

I speak as a member of the Local Government, Housing and Planning Committee and in support of the general principles of the bill to introduce a visitor levy.

Having a visitor levy is not a new idea; levies are widely used across Europe and around the world. As of 2023, 21 of the 27 EU member states charged occupancy taxes. Some cities and regions use the levy as a way to increase their general reserves, while others ring fence all or part of that revenue to fund specific projects. It is quite reasonable, and not uncommon, for local authorities to want a small contribution from tourists to support and sustain their visitor economies.

Scotland has breathtaking landscapes and a rich cultural heritage, so it is not surprising that our country has become a magnet for tourists from around the world. Tourism is an important part of our economy, supporting more than 200,000 jobs and bringing £4.5 billion into the Scottish economy each year.

That is why members of the committee recognise that a visitor levy must be done properly. The committee recognised the concerns that have been expressed by local businesses and other stakeholders, but, overall, the levy has the potential to bring significant benefits to visitors, the tourism sector and local residents alike. It has the potential to create funds that can be reinvested in maintaining tourist attractions, in preserving the environment, in supporting local businesses and in improving public facilities.

The levy could also create a more symbiotic relationship between visitors and local communities. When we visit a new country, we all have the responsibility to respect its landmarks, cultures and environments. The levy would ensure that tourists themselves would become active participants in the preservation of Scotland’s unique spaces and communities.

Although some people are concerned that a levy might have a negative impact on visitor numbers, introducing one at a modest rate in some local authorities would not be likely to have a significantly detrimental effect on visitor numbers, given the unique nature of Scotland as a destination and the experiences of other jurisdictions where a levy has been introduced. In fact, a levy could bolster the tourism industry because funds could be reinvested in local facilities and services, thereby helping to attract more visitors. A levy should be welcomed, because spending would benefit both locals and visitors and it would provide ambitious strategic long-term investment.

Our committee believes that decisions on spend should be taken at the local level. Flexibility to allow local authorities to prioritise their spending is a key aspect of the bill and is in keeping with the principles that are set out in the Verity house agreement. The bill would ensure that local authorities could decide whether to introduce the levy and, if so, to implement it in a way that would work for their local circumstances. The bill, therefore, plays a key part in the Scottish Government’s wider aim of giving councils greater financial flexibility and strengthening local democracy.

The committee understands that some people have concerns about possible complexities that could arise from that approach, but I and most members of the committee feel that local authorities are best placed to design approaches that will best suit the needs of their local communities.

Due to Covid-19 and increased costs, the past couple of years have been a real challenge for the hospitality industry, so I have every sympathy with hospitality and other businesses. A levy would not come into effect until early 2026. The committee is mindful of the concerns about possible administrative burdens, so we welcomed the constructive engagement on the matter. At its core, the committee valued the importance of meaningful consultation with the tourism and accommodation sector to create a genuine sense of partnership working—for example, through the expert group—so we have loads to do for stage 2. That will help to alleviate the concerns of many people in the sector and will demonstrate the potential long-term benefits of a levy.

It is important that we recognise that a visitor levy is not simply a tax, but is an investment in the future of Scotland. It will position Scotland as a sensible forward-thinking destination that values its cultural heritage, environment and local residents. Those values are appealing to tourists as well, as more people become conscious global travellers and take a real interest in the countries that they visit. We should embrace this opportunity as a chance to ensure that our country has a vibrant and sustainable future and to create a Scotland that generations to come will want to visit.


Ross Greer (West Scotland) (Green)

The Scottish Greens are obviously pleased to see the Visitor Levy (Scotland) Bill come to a vote today. We secured a Government commitment to introduce a visitor levy during budget negotiations back in 2019, not long after the then Culture, Tourism, Europe and External Affairs Committee, of which I was a member, took evidence on the principle of what was referred to as a tourist levy. It was not a new or novel concept at that point. As others have said, it has been the norm across many of the world’s top tourist destinations for a long time. Unfortunately, despite the agreement to create the power in the previous session, the proposal was one of many that we were forced to drop when the Covid pandemic hit. However, the Government maintained its commitment to introduce the bill once time allowed, and here we are, delivering another measure to broaden the financial powers of local councils.

It has been a long-standing position of the Scottish Greens that councils should have the range of financial powers that they need to raise the vast majority of their own revenues, as opposed to the current position, whereby about two thirds of their budget comes from the Scottish Government grant. That makes us an anomaly in European terms. We have some of the most centralised and least empowered local government on our continent, but that is gradually changing. The visitor levy will be joined by a cruise ship levy, as announced by Lorna Slater last year. That move will be of particular benefit to Inverclyde Council, in my region—which will not realistically see significant benefits from a visitor levy—given the dominance of cruise ships in its local tourist economy. The Scottish Government has also committed to developing a carbon emissions land tax, as well as delivering the infrastructure levy that is enabled by the Planning (Scotland) Act 2019, and this spring we will see more details of the intended process for reform of the council tax.

We have delivered the Bute house agreement commitment to give councils full powers over empty property relief. That represents a big opportunity for councils not just to raise more revenue but to drive redevelopment, and it comes on top of the power to double council tax on second homes, which a number of councils have already made clear they will make full use of from 1 April. There is the commitment to consult on changes to legislation to allow councils to go beyond just doubling it, which councils in Wales can already do, and then there is the workplace parking levy, which City of Edinburgh Council is already consulting on making use of. There is clearly a need to go much further still in empowering local councils, but the visitor levy power is an important part of a much wider package of empowerment.

We are incredibly fortunate that Scotland is such an attractive destination for tourists, whether they are from abroad or from the rest of the United Kingdom or our own residents who choose to explore and enjoy their own country for their holidays. I see that in my region, from Arran, Cumbrae and the Ayrshire coast to Loch Lomond.

The growth of our film and TV sector in recent years has created an acute boost in tourist numbers in the various locations that have been used for productions such as “Outlander” and “Star Wars”. That is great for our economy, especially in fragile rural communities, but it also puts huge pressure on those communities and on public services.

I am well aware of the negative impact of high tourist numbers on such communities, given that I represent Luss, on the west shore of Loch Lomond. Rarely does a summer season go by without local—and often national—headlines about inconsiderate or even dangerous parking, antisocial behaviour and litter there. Clearly, that comes from a small minority of visitors, not all of whom will stay overnight, but it puts pressure on council services.

Ivan McKee

I am enjoying Ross Greer’s speech. What does he see as the role of local businesses in working with local authorities to make decisions on the best way to deploy the funds that are raised by the visitor levy to support local economies?

Ross Greer

That role is absolutely essential. As a supporter of participatory budgeting, I want the whole community, including local businesses and business owners, to be engaged by local councils in how they deploy to maximum benefit the funds that are raised. I will come later to a couple of specific proposals on that.

I am aware that tourism brings money into local economies, but councils themselves rarely see a direct benefit from that. It is an entirely reasonable principle that the body that provides public toilets, bin collections, leisure facilities and all sorts of other services that tourists make use of is able to recoup those costs, and it is only fair that local residents are not left to pick up the bill.

When the bill process started, in 2019, parliamentary debates about tax and funding were not exactly in a good place, but they were a bit better than they are now. Tax is one of the most critical ways in which we all contribute to building a better society and meeting the needs of everyone in our communities. I am proud that the Greens are honest about that—about the need for a fairer tax system if we want better public services.

We have already seen significant changes, such as raising income tax on the highest earners; raising tax on the purchase of second and holiday homes; doubling council tax on those holiday homes; and the range of new local powers such as the visitor levy, the cruise ship levy and the infrastructure levy on big developers. Those changes already deliver £1.5 billion more a year for public services in Scotland, and the visitor levy will add to that total. By diversifying our tax base with new levers, we can empower communities to deliver on their local priorities and to have real control over the shaping of their economies. It is not enough to say that we will—

Will Ross Greer take an intervention?

Mr Greer is probably in his last minute.

Ross Greer

To go back to my example of the impact of over-tourism on Luss, I was interested in the evidence that the committee took on the pretty widespread support for the national parks having a role in ensuring that they benefit from the proceeds of a levy. That is only fair, given that many of the services that they provide, such as public toilets, would be provided by local councils in any other setting. I am therefore keen to see how that can be progressed.

Before closing, Presiding Officer, I will highlight two themes from the evidence that was submitted to the committee. The first is the 18-month gap before a scheme can be introduced and the case that has been made by councils for shortening that. There is an urgent need to inject more funding into the services that tourists benefit from, so I am not convinced of the rationale for that 18-month timescale.

The second theme is the scope for spending the funds that are raised, which is the point on which Ivan McKee intervened. Many hospitality businesses in rural communities struggle to fill vacancies. In large part, that is caused by local housing shortages. Although the Scottish Government is addressing those through other measures, such as the doubling of council tax on holiday homes and the regulation of short-term lets, there is a strong case for ensuring that councils can use visitor levy revenues to address those local housing needs and resolve those local labour shortages.

The bill has been a long time in coming. Councils are ready to start developing local levies, and the committee’s report makes a clear and compelling case for proceeding. A visitor levy is just one of the many measures that are required, but it is one that the Scottish Greens are proud to support.


Stuart McMillan (Greenock and Inverclyde) (SNP)

I wanted to speak in the debate because, although I agree with the general principles of the Visitor Levy (Scotland) Bill, some of its aspects need to be amended. I will come on to those points in a bit more detail later.

I put on record my support for the bill, which will certainly enable councils to invest in their areas. However, that will happen only if the councils choose to introduce the levy, which can also be applied to certain areas within a council boundary rather than the whole local authority footprint. Furthermore, local authorities can work with neighbouring councils to implement a joint levy, which should help to streamline administration and make things easier for visitors if a tourism hotspot crosses a local authority boundary. Councils can also decide on whether to apply the levy year round or, for example, just during the summer. That demonstrates how the bill seeks to empower local authorities by offering the flexibility to meet local needs.

Let us not forget that taxes on overnight tourist stays are not unheard of. In fact, they are common across Europe and in other locations around the world. Daniel Johnson touched on that in his speech. That suggests that other nations agree that it is reasonable for regions to want small contributions from tourists to help support and sustain their visitor economies. I do not believe that such policies have led to a dearth of people visiting those countries.

Scotland is an exceptionally popular tourist destination. From conversations that I have had with businesses in the tourism sector, I know that the UK has seen a surge in visits from North America and China, and the sector is expected to recover—the UK has been back on the approved list since July 2023. I am told that those are not particularly cost-conscious markets, but, although people from those countries enjoy visiting the Highlands, they tend to do that on day visits and do not typically stay in rural accommodation.

I make that point as a reminder that the Visitor Levy (Scotland) Bill is just one means of supporting Scotland’s tourism industry. As it is up to each local authority whether the levy is introduced, the benefits may not be felt equally across the country. That is why, if the bill is passed—and I certainly hope that it is—the engagement with the sector must continue, so that we can ensure that the tourism offering across Scotland is able to thrive.

At the outset of my speech, I mentioned aspects of the legislation that I believe should be amended. Specifically, I am referring to marinas and moorings being categorised as overnight accommodation and therefore captured by the bill. I am the chair of the cross-party group on recreational boating and marine tourism, so the issue was brought to my attention shortly after the bill was published. Marinas and moorings are not providing accommodation. The boat is, in fact, the accommodation, assuming that it has the capacity to offer accommodation. Crucially, not every boat does. In that sense, marinas and moorings are more akin to a car park than accommodation. Those are not my words but those of people within the sector.

There is also the question of who is expected to differentiate between boats that can be used for overnight stays and those that cannot. There are many small moorings that are community led, are staffed by volunteers and have honesty boxes rather than an office to manage the berthings. Many are also small in size and generally do not generate as much revenue.

Daniel Johnson

I am grateful to the member for going into some detail on that point. Another point is that, very often, moorings do not have people on the vessels that are moored to them. Therefore, determining whether they are occupied seems like an utter minefield. Does the member agree with that point?

Stuart McMillan

I am about to come on to that.

I have been engaging with the community wealth minister on the matter. I first met him last summer, before inviting him along to the cross-party group meeting last September to speak with its members. That was a very helpful discussion, but it was clear that further dialogue was required, so, in November, I hosted a round table with the minister and relevant stakeholders in my constituency to discuss their concerns in more detail. The point that Daniel Johnson just raised came up at not only the cross-party group meeting but the round-table meeting that we had in my constituency.

I want to publicly thank the minister for how willing he has been to engage with me and the boating sector on the bill. The sector has shared with me its gratitude for how open and keen the minister has been to have dialogue with it. With that in mind, I look forward to continuing that engagement, as I know that the minister is very sympathetic to the concerns of the boating sector and is prepared to consider amendments.

I have also raised the issue of extending the legislation to include the cruise sector, as that would be beneficial to my constituency. That matter has been touched on by Ross Greer a moment ago and by Beatrice Wishart, with regard to her constituency. The minister has previously indicated that the bill may not be the vehicle to deliver that, but I ask him to not rule it out or to consider additional legislation to deliver it. I note the minister’s reply to the committee on 12 January.

I want to touch on one potential complexity of the question whether the levy is charged at a flat rate or a tiered rate. There would be a challenge for the cruise sector if there was a tiered rate, but a flat rate would benefit the cruise sector. There are some areas that need to be considered with regard to the cruise sector. I note that the Association of Scotland’s Self-Caterers also calls for cruise ships to be included in the bill.

I congratulate the committee on its excellent report, and I thank the minister for bringing the bill forward. I look forward working with the minister and to supporting the bill as it progresses.


Craig Hoy (South Scotland) (Con)

Before I turn to the legislation, I note that it is particularly galling, in this debate, to hear SNP and Green members extolling the virtues of flexibility and freedom for councils to raise tax in the same year in which they have unilaterally decreed that councils cannot use their main power—council tax—to fill the funding gap that the Scottish Government has itself created.

Yet again, the Government is passing bad laws with what will be damaging consequences. It is doing so for one reason: to enable councils to make up for the SNP Government’s own financial mismanagement. Despite the assurances—

Will the member take an intervention?

Craig Hoy

I want to make some progress and then I will be happy to do so.

Despite the assurances that we have been given today that the money will be ring fenced and that councils will not be allowed to use it to backfill for SNP cuts, the Scottish Government has, year after year, mandated that councils should do more with less, in particular in social care and education. The visitor levy is just yet another tax from the Scottish Government, which, as each and every year passes, taxes more and delivers less for our communities.

For many businesses, not just hotels and bed and breakfasts, it will undermine their opportunity to bounce back after the Covid pandemic. As chairman of the cross-party group on beer and pubs, I see the wilful damage that the SNP Government is doing to the sector, the jobs that it supports and the economic contribution that it makes each and every day.

We have to be mindful that laws such as this will have an impact on the overall spend. Despite what the minister and others have said today, there will be some who come to Scotland on a fixed budget, and anything that is taken off them in the form of this tax will not be spent, for example, in Scotland’s restaurants, cafes, hotels and bars.

Last year, the Scottish Licensed Trade Association warned that 95 per cent of venues were dealing with rising supplier costs. It noted that 77 per cent said that they were

“seeing continued increases in utility charges”,

and that, sadly, 9 per cent said that they were

“either planning to close or considering options.”

For those businesses that are on the edge, the visitor levy could be what pushes them over.

We should never forget that tourism already contributes £4.5 billion to Scotland’s economy and already supports 200,000—one fifth of a million—jobs. Time and time again, however, the Scottish Government has sought to tax our tourism and hospitality sectors as costs continue to rise. This year, many of those businesses could be benefiting from rates relief, for which the Scottish Government has been recompensed by the UK Government, but it has chosen not to apply that relief. Rather than enabling hospitality and tourism to get—

Is Craig Hoy saying that we should take money away from the national health service to go towards what he suggests?

Craig Hoy

No, I am not. I am simply saying that we should not be wasting £400 million on two ferries that have not sailed and £1.5 billion on a national care service that may never actually be launched.

It is about priorities. The issue here is that councils will be forced, I think, in many instances, to introduce the visitor charge as a result of the SNP’s austerity agenda—because the Scottish Government is failing to fund our public services and our councils properly. The Government should be working in lockstep with the tourism industry to reduce the regulatory burden, but instead, by having bed and breakfasts, hotels and other operators collect the tax, the Government is, in effect, increasing the regulatory burden on them.

We should take on board, for example, the view of the Federation of Small Businesses in Scotland, which has warned that the plans will

“incur additional costs for already struggling businesses”,

and the view of the Scottish Tourism Alliance, which has said that the levy will discourage tourists and displace spending away from restaurants, bars and shops. The STA has also said that the levy is

“overly complex and will be excessively burdensome for certain types of ... providers and visitors”.

We should be mindful that large operators such as Expedia are concerned that the levy

“will result in a patchwork of different rates and exemptions”.

For example, as we have heard today, the SNP is no doubt pleased about the fact that the levy will not apply to camper vans. In short, the legislation creates an uneven playing field. If we are going to include multiple different providers in the framework of the regulations, the Government should be encouraged to look at the cruise industry. When people come to this country on a cruise, they are often some of the lowest spenders in the communities that they visit, given that they get their board and lodgings on the vessel on which they have arrived.

Will the member take an intervention on that point?

No, I will not.

The member is about to conclude.

Craig Hoy

We have to be very mindful that the legislation comes on the back of the deposit return scheme and the regulation of short-term lets. It could push many businesses over the £85,000 VAT registration threshold, which would create costs and administrative burdens for small operators. Ministers must address those substantive concerns, which were also raised by the Association of Scotland’s Self-Caterers.

The tax will be damaging to the communities that I represent in the south of Scotland, which often struggle to attract the same magnitude of visitors as Edinburgh and the Highlands, because the councils may be forced into raising such charges because of their own financial issues. The Scottish Government should listen before it legislates, but I am sad to say that, based on experience, I do not believe that it will do so.


Paul Sweeney (Glasgow) (Lab)

I support and welcome the principles of the bill. However, we must set the legislation in the context in which it has been introduced, which is the decimation of local government in Scotland—no more so than in my home city of Glasgow. Glasgow City Council has seen the largest reduction in real-terms revenue funding from the Scottish Government of any local authority over the past decade, at £270 per person compared with an average of £160 per person across Scotland. That Scottish Government share of the cake that goes to Glasgow City Council is worth 80 per cent of the council’s entire income—by far the largest single funding contributor—and is increasingly ring fenced for Scottish Government priority areas, thus reducing the council’s financial autonomy. Therefore, any measure by which the council can increase its autonomy and improve its revenue position is to be welcomed.

The local taxation balance between the council tax and business rates in Glasgow has shifted towards the former and away from the latter in recent years. That is a regressive change. The cost of council tax has been increased and it is anticipated that it will bring in more revenue than business rates in 2021-22, the revenue from which had been falling even before the pandemic hit.

We have a tax situation in local government that is obsolete. Council tax is 30 years out of date and is regressive in the way that it falls: it is too burdensome on the poorest residents in our city, while not charging the wealthiest enough. Revenue from business rates has been falling in Glasgow for the past five years, despite the value of commercial property rising and there being an estimated 18,000 businesses in the city. The tax is clearly ineffective in capturing a portion of the growth in the economic value of businesses operating in Glasgow, while simultaneously stymieing the use of business premises by fledgling start-up entrepreneurial enterprises. As was mentioned by Miles Briggs, the Conservative member for the Lothians, the VAT threshold also artificially constrains business growth.

We have to set all that in the context of a situation of distress. Glasgow City Council has had to make an estimated £327 million in service cuts over the past decade, which is equivalent to half of the council’s education budget. Spending on education and social work now takes up 71 per cent of all council expenditure, which is an increase from 64 per cent in 2016-17. Therefore, the council service provision has been increasingly narrowed to two big priority areas.

I hear Paul Sweeney’s comments on the regressive nature of the council tax. Does he have specifics on what Labour would propose in order to replace the council tax?

Paul Sweeney

I am a long-standing sympathiser with the idea of a land value tax, because I believe that it is the most efficient tax yet devised by any economist. I would be interested in any proposals to advance that in Scotland. I understand that there is broad cross-party interest among members in that.

Returning to the specific proposal before us today, the visitor levy would not come close to plugging the estimated £1.5 billion black hole that has been created in council budgets across Scotland by the Scottish Government. However, it will mean that councils can raise some funds to, for example, keep museums and visitor attractions open in order to keep tourists coming to our towns and cities.

We do not want a situation of the tragedy of the commons, in which we have five-star hotels in the midst of public squalor, but, increasingly, that is the environment in the city of Glasgow, as cleansing department budgets are constrained and the capacity for the city to maintain its public spaces is reduced.

Any funding that is brought into our city through the visitor levy must go back into the city specifically to improve key services for people who live there. I have long called for local authorities to have the power to introduce a visitor levy. For example, the People’s Palace in Glasgow is badly in need of transformation. It is one of the city’s key attractions and needs to be restored and renovated, but Glasgow Life has continually had its budget slashed and has not had any financial headroom to do anything in nearly half a decade to repair that A-listed Victorian glasshouse and social history museum. A visitor levy would allow Glasgow Life some headroom to not only keep museums and galleries open but ensure their future.

That came into sharp focus during the 26th United Nations climate change conference of the parties—COP26—in Glasgow. A rough calculation demonstrated that a £10 per room per night tourist tax would have raised around £1.6 million from Glasgow’s 11,000 hotel rooms over the 14 days of COP26. Adding the 2,500 registered Airbnb residences in the city would have raised another £350,000. That sits in good context, because to save £1.5 million this year, Glasgow museums are having to cut 28 per cent of their curating staff, thus constraining the city’s capacity to put on exhibitions that attract people into the city. There is a seriously negative feedback loop in relation to Glasgow’s capacity to maintain its position as a cultural capital.

Other cities around Europe do this as the norm and specifically target the money at culture. In Cologne, it is called charging a tax for the promotion and advancement of culture in the city. That is what is on people’s hotel bill when they check out. That is a very reasonable position. We could have a flat rate or a percentage rate, as some cities do. I am open minded about that, and there should be flexibility for councils to consider that.

Ultimately, tourism is a valuable sector in Scotland’s economy. It introduces huge wealth to our cities, but we need to capture more of that wealth for the public good, because an increasing share of overall wealth of this country is being thrown into private interests at the expense of the public realm.

Every Glaswegian’s council tax bill says that we should pay up for Glasgow—I think that everyone should pay up for Glasgow, including those who visit our city to experience our cultural attractions.


Ben Macpherson (Edinburgh Northern and Leith) (SNP)

I commend the Government and the committee for their work on the bill to date. I am not a committee member, but I have been a long-term supporter of the bill in principle, both as constituency MSP for Edinburgh Northern and Leith and, previously, as Minister for Public Finance and Migration and Minister for Social Security and Local Government, advocating on behalf of local government for progress on the bill.

As colleagues have emphasised, Scotland is a top visitor destination. Around £4.5 billion is contributed to the economy by tourists and by the businesses and individuals who work in the sector. We should not take that for granted, but that statement has a variety of different considerations. One of those is how we make sure that we invest in attractions and experiences and in the infrastructure and services that enable them.

A transient visitor levy is very normal across the European continent, and it has not been detrimental to visitor numbers. Indeed, 21 out of the 27 EU member states have some form of transient visitor levy, including in cities such as Berlin, Amsterdam, Milan and many others. I appreciate that every place’s circumstances are different, but it is clear that the concept is normal.

What is particularly important in the legislation that we are considering today, and which the committee picked up on, is the requirement in the legislation for local discretion. It is absolutely right that the bill will enable councils to invest more in local tourism facilities and services through a levy on overnight stays, and that it will be their choice whether to implement the levy. To ensure that local needs are met, it is right that local authorities are given powers and discretion to implement the levy as appropriate.

That also applies to the flexibility around spend. Colleagues have made important remarks about that. Section 17, as drafted, is helpful in the purpose that it gives, but we need to consider the flexibility. For example, in Edinburgh, where there has been significant development, a consultation that was undertaken a number of years ago showed that 85 per cent of respondents and the vast majority of businesses were in favour of the approach, but what the council and stakeholders would like to see the resource spent on is a matter for consideration in the council. The festivals are generally in favour of a levy and businesses large and small are in favour of a levy, but the things that need to be spent on are varied. For example, there is infrastructure, such as Leith theatre, in my constituency, and there are important streets and attractions in the city that lure people from all around the world to come to it. I am thinking of Victoria Street, for example, which is among the most Instagrammed streets in the world. The cobbling of that street in the city centre desperately needs investment. I use that as a very small example, but those are the small projects that, as well as investment in theatres and other more obvious examples of cultural spending, we need to think about in respect of what tourism spend means.

I am glad that the Government is going to look at section 17 and ensure that councils have a breadth of choice when it comes to spending.

Remarks were rightly made earlier about service provision. For example, waste services in Edinburgh come under significant pressure during the festival period. It is right that the council is arguing that there should be consideration of whether the fee can be spent on that.

As has been stated, Edinburgh has argued for a percentage rate. The discussion that we have had today and the consideration that is being undertaken about whether to have a percentage rate, a flat rate or a tiered rate is important, and I look forward to seeing developments on that at stage 2.

In my remaining time, I want to point out one issue in particular that has been raised around boating considerations. Cruise ships have been discussed. I share the general philosophy that a charge for cruise ships should be considered if other businesses that work in the tourism sector are going to be charged. I know about the complexity that is involved in that, and I think that the minister is right to take the appropriate time to bring forward any changes, whether that is at stage 2 or in further legislation. I look forward to that.

Amendments relating to moorings and berthings are being considered. There are two very good hotels in my constituency—the Fingal and the Ocean Mist—that are permanently berthed but which advertise as hotels. That might be an anomaly that needs to be thought about. The Playbill ship that will be in Leith docks, which is very welcome over the festival, is another example to consider.

There is a lot more that I could say.

Finally, monitoring and reporting are important. It is right that the Government should take appropriate time to ensure that the monitoring and reporting are well set out and all stakeholders are ready to implement that should Parliament pass the bill at stage 3.

We move to winding-up speeches.


Daniel Johnson (Edinburgh Southern) (Lab)

There is no doubt about the importance of the tourism industry to Scotland. It is important in and of itself as a generator of revenue, and it acts as a calling card for a huge range of different activities. People know Scotland, and they know what culture and geography this country has. That is incredibly important. What is at issue is devising a scheme that is additive to that, enhances it, and enables investment in those things, because tourism is important.

Moreover, that will—if done right—create an opportunity for an alignment of interests. As my colleague Paul Sweeney rightly pointed out, we do not have a system whereby local authorities see the financial benefit of being a successful tourist destination. If we can create the virtuous link between the activity and a council’s ability to see the upside and invest, we will have a good policy.

However, as Miles Briggs said, the devil is undoubtedly in the detail. We need the levy to be straightforward to implement, which will provide clarity for visitors and for operators, so that they know what to do. It is critical for the levy to be deliverable for local authorities. It would be easy to create a cumbersome and complicated scheme that got in the way of doing the very thing that we seek to promote.

I will run through a number of key points. Sarah Boyack set out well the case for creating additive and supplementary income for investing in the infrastructure that a successful tourist city needs. As Ben Macpherson said, we have only to look around Edinburgh to see highly important locations such as Victoria Street that desperately need investment. It is important that the funds will be additive and will not backfill lost resource from other areas. Getting the mechanism right to ensure that the funds are additive and that industry and local communities direct spending to enhance the visitor offer is highly important.

I make it clear that having a cumbersome definition would be entirely wrong, because we would almost certainly get it incorrect. As Ben Macpherson highlighted, it is important to make sure that the reporting and consultation requirements create the virtuous cycle.

We need to consider the impact on small businesses a great deal more. Across the chamber, there has been a little bit of an assumption that the measure will be somehow easy for businesses to implement and that they can put a button on their tills.

As a former retailer, I know that implementation is not always so straightforward, even when you think that a policy is beneficial and even when you think that it will benefit you. I point both to the carrier bag charge and to the 2008 VAT change. That change was welcome in challenging circumstances, but it required me to stay in my shop overnight to try to update my systems on 1 December, which was in the middle of our busiest trading period. That change was welcome, but it came at almost the worst possible point in my trading year.

Members should not think that, because something is beneficial, it will be without consequence or cost. In particular, we must bear in mind that we are dealing with a cohort of businesses that include some that are very small. Such businesses do not necessarily have complicated IT systems where a parameter can be changed to allow them to start accepting an additional levy; some businesses might be run from a notebook and a petty cash tin. Let us make sure that the measure is straightforward for such businesses to implement.

We should consider exemptions for small businesses. For those that do not charge VAT, it may not be worth their while to continue in business if they have to deal with this additional burden. Introducing the levy will not be like simply having an extra rate of VAT for them.

We need to take care with a percentage levy, which in effect involves charging an additional rate of VAT. That is how such a measure will operate, and it is not without complexity. VAT is not straightforward to collect or verify. If we are going down that route, we must make sure that implementation is straightforward for councils. I say gently that I wonder whether 18 months will be sufficient time to create a system and a resource to levy, collect and verify an additional rate of VAT.

We should heed calls from the sector for a simplified framework. Councils should absolutely be in control of the rates that they levy, but would a simplified framework at least provide consistency for implementation? That would also allow visitors who are looking at touring Scotland to understand the prices that they will face, instead of potentially dealing with 32 approaches to their accommodation prices.

I note the time, Presiding Officer, so I will simply say that the visitor levy has the capacity to create more funds that can be used to enhance our visitor attractions but there are potential consequences to using the measure. We must look at the detail and get it right so that we strengthen the tourist industry, not undermine it.


Murdo Fraser (Mid Scotland and Fife) (Con)

This has been a very interesting and well-informed debate, with lots of good contributions. It has been a debate of two different parts: the first on the principle of the visitor levy itself and whether it is a good thing, and the second on how it might operate in practice, with lots of members raising different angles in that regard.

I will start by looking at the issue in principle. The minister started off by setting out why he believes that a visitor levy is the right policy. He said, as others have said, that it is common elsewhere. Many other countries in Europe and elsewhere have some form of tourist tax. Based on that, there is little evidence that the measure would have a substantial negative impact on the tourist sector or the economy, but it could, as a number of other members have said, bring in additional resources to local government, which would have the discretion whether to introduce it.

There are arguments against the visitor levy in principle, too, many of which have been set out in the briefing papers that we have all received from business organisations such as the Scottish Tourism Alliance, the Federation of Small Businesses and Scottish Land & Estates. Although Scotland is a very attractive tourist destination, it is undeniable that it is expensive. In international terms, we are high cost.

Part of the issue in that regard is that our VAT on hospitality is 20 per cent, which is much higher than the rate in many other European countries. There is an argument for reducing VAT on hospitality. I have heard people in the chamber make the argument before, and I am quite sympathetic to it. However, I am always wary of calls for uncosted tax cuts, given the danger that they might pose. We must also recognise the reality: we would be putting a tourist tax on top our current high rate of VAT.

There would also be an impact on our tourism sector, which is still suffering and is just recovering from the impacts of Covid. In its submission, Scottish Land & Estates makes the important point that the visitor levy risks sending a message to operators of tourism and hospitality businesses that they are a problem that needs to be fixed.

Hospitality, in particular, is still suffering. Almost every day, we read in the press that hospitality businesses are closing due to the pressures on them and due to business rates. After all, the 75 per cent rates relief that is applicable south of the border has not been passed on in Scotland. This is an issue for hospitality. I would also note that in its submission the FSB said that, when it surveyed its members, 51 per cent opposed in principle the introduction of a visitor levy.

Having said all of that, I recognise that there is a majority in the chamber in favour of passing the bill at stage 1. We are where we are with that, and we will express our concerns, but we are likely to see the bill proceed. I will therefore move on and talk about some of the practical issues that have been identified in the debate.

There has been quite a lot of discussion on the scope of the levy. Earlier, I raised with the minister the issue of camper vans. It is a pertinent issue, because many people in rural parts of Scotland, particularly in the Highlands and parts of the region that I represent, are concerned about the growth in the camper van trade. Unlike those who stay in bed and breakfasts and guest houses, people in camper vans do not make such a significant contribution to the local economy. At the start of their week’s holidays, they will often do a big shop at the supermarket, filling up the cupboards and the nooks and crannies. Therefore, they are not spending as much money in local shops and restaurants as would be spent by those touring around in a car, for example, and staying in other accommodation.

Furthermore, taxing only those licensed places where camper vans can stay will incentivise the growth of wild camping by those with camper vans. Wild camping is already a scourge in many parts of rural Scotland, particularly the Highlands, and I urge the minister to look at the matter as closely as he can.

A number of members asked whether we should capture day trips. Many of the people who visit our islands do so as a day trip, going to places such as Arran, making use of the local facilities and then coming away without staying overnight.

There is also a big debate about the maritime angle. Beatrice Wishart highlighted the impact on cruise ships on Shetland, and Stuart McMillan talked about how we capture the maritime sector more generally and whether it is realistic to do so. The issue needs to be addressed.

We also need to consider the whole question of exemptions, which Miles Briggs spoke about earlier. Should people who work on a contract basis pay what is, in effect, a tourist tax? Should parents who have children in hospital and therefore have to stay in a hotel in order to be near them have to pay the tax? How could we create a voucher scheme to ensure that such people were exempt?

There are also issues relating to administration. Should there be a flat rate? Should the levy be based on a percentage? Should there be banding, as has been proposed by the Scottish Tourism Alliance? That strikes me as a sensible compromise if we are going to go down that route. Can we have 32 different systems across Scotland? That will undoubtedly cause confusion.

As I understand it, very few local authorities want to go ahead with the levy. Should we not let the councils that want to introduce one do so, monitor the process and learn the lessons as we go forward?

Murdo Fraser

We need to be cautious. As Sarah Boyack will understand, we have just had the experience of short-term let licensing. We have 32 different systems across Scotland, and it has created a range of anomalies that we still have to work through, so I would be cautious about rushing headlong into introducing something that might have unintended consequences.

The final point that I want to address is how the funds will be spent. Will they be ring fenced? Will there be a role for the business community in determining how they are allocated, as Ivan McKee said earlier? That would be a very sensible proposal to pursue at the bill’s later stages. What is tourist-related spending? Does it mean providing public toilets, filling potholes in the roads, emptying bins and keeping open swimming pools? Councils should be doing those things already.

That leads me to one of our major concerns. As Craig Hoy and Pam Gosal said in their speeches, at a time when council budgets are being increasingly squeezed as a result of decisions taken by the Scottish Government, there is a real danger that councils will end up trying to backfill their budgets by raising the levy on visitors. It is all very well to say that it is great to be empowering councils by giving them additional powers to raise tax, but, if the Government is doing that at the same time as it is cutting their core funding, it leaves them with little alternative.

A lot of detail has still to be provided, and we have real concerns about some of the proposals. We hear a lot from the Government about a new deal for business. Well, I think that we know what businesses think about what is being proposed. Perhaps it is time for the Government to start listening.


Tom Arthur

I thank everyone who has participated in what has been a thoughtful and considered debate, which has certainly given me plenty of food for thought. I reiterate my thanks to the Local Government, Housing and Planning Committee, all who gave evidence to it and, indeed, all who have engaged with me and my officials throughout the process.

I will try to respond to as many individual points as possible, but I will begin by considering some of the key themes and headline issues. First, I want to be clear about what we envisage the power being used for. It should generate revenue that can be invested to sustain and grow our tourism and visitor economy sector. The levy is a tool for economic development. Scotland already provides a world-class tourism offering, and the purpose of the discretionary power is to allow local authorities to introduce measures that will allow them to expand and enhance that offering.

I appreciate that that issue, as well as many other issues that we have considered, leads me to one of the fundamental tensions, which is that between national consistency and local discretion. I will adopt a maxim or principle to guide us through the process: we want any levy that is introduced to maximise the application of local knowledge to secure the biggest return on investment while avoiding any unnecessary variation. The work that we are undertaking in partnership with VisitScotland, which is leading an expert group that will develop guidance on best practice and implementation, is one vehicle by which we can explore how we can ensure consistency when that is beneficial and avoid unnecessary variation.

We should also recognise the importance of local discretion so that each local authority can respond to the assets and needs of its visitor economy. The priorities for the visitor economy in Edinburgh might be different from those for Inverness, just as they will be different from those for Drumnadrochit and Skye. That is an important point. I am keen to have continued engagement with businesses, local government and members across the chamber on how we ensure that we get that balance correct.

Another key issue that has arisen is that of a flat rate versus a tiered rate versus a percentage rate. It has been interesting to hear the reflections on that. When I was at the committee, I asked it to consider that matter, because I was keen to see what view it would settle on in its report, and I was hopeful that it might come to a conclusive and decisive decision. However, the committee basically said, “Back to you, minister, because we recognise that there is a range of views.”

Each of those options has merits. It is important to avoid unnecessary complexity and to minimise administrative burden. We need to try to strike a balance—as, I think, the STA has done through its proposed banding system—between simplicity and ensuring an element of proportionality, which is recognised to be one of the principal attributes of the percentage rate. Again, I am keen to have continued engagement on that to find as much consensus as we can.

On the proposed cruise ship levy, which has been raised a number of times, I set out the position when I was at the committee. There is a joint working group through which Scottish Government and COSLA officials are looking at developing policy in the area. I note that such a levy would be distinct from the visitor levy with regard to what the chargeable event would be. There is a need for careful policy development and to learn from best practice internationally. We need to recognise what some of the risks can be with a cruise ship levy, such as displacement, and ensure that we design a power that can be used by local authorities, should they wish to do so.

Our commitment is that, if the work can be concluded in time for stage 2, the Government will lodge amendments at that stage to introduce a cruise ship levy. However, we do not want to delay the bill. We recognise the points that Sarah Boyack and others have articulated on the desire for the visitor levy power to come online as soon as possible, so we want to progress the bill through Parliament. If it is not possible to lodge an amendment at stage 2 to introduce a cruise ship levy, we will look for an alternative vehicle to do so. As has been set out, the Government has made a commitment to introduce legislation to create that discretionary power for local authorities.

Turning to some of the points that members have raised, I recognise that Miles Briggs has championed the issue of exemptions, both in the committee and through parliamentary questions. I am keen to have further discussions on that, and I recognise that there may be a range of views. Reflecting on Mr Briggs’s response to my intervention earlier, I think that there is a role for local exemptions, but I recognise the concern that we might end up with a number of different exemption schemes, which would add unnecessary complexity for businesses that operate across multiple authorities.

Again, I want to explore in detail what the balance should be. We have already recognised the points that have been raised about exemptions in relation to children and young people, and I recognise that there are other areas. I do not want us to have a system that is overly prescriptive and that unduly restricts the flexibility of local authorities. However, I recognise that there may be an argument that local authorities would inevitably introduce particular exemptions, so it may be easier to do so in the bill. Again, in partnership with local authorities and business, we will want to have detailed discussions.

I thank Mr Griffin and Mr Johnson for their remarks, and I welcome the Labour Party’s support for the measure. I reiterate my thanks to Sarah Boyack and Councillor Day for their early engagement on the bill. I reiterate that I am happy to continue to engage with them and other members as we go forward.

A point that Mr Griffin raised that has been reiterated by others is that the money should be “additive”, to use Daniel Johnson’s expression, and should not be used to backfill. That is very much what I see the power being able to achieve. The aim is to increase investment in our visitor economies and to provide—to use the language that Marie McNair used—“strategic long-term investment”. It is not just about a tax; it is about investment in the future of our visitor economy. That approach is key.

Key to delivering that will be the requirement to consult, as it is set out in statute. Assurance can be provided for business through not just the consultation requirements but the fact that local authorities, in accounting for the levy, will be required to report annually and to review after three years. Again, recognising the views that have been expressed, I am happy to reflect further and have further discussions on those provisions to ensure that we have a framework that can command the confidence not only of the local authorities that choose to implement the levy but of business. Commanding the confidence of business is absolutely key. To use the words of the STA, we want the levy to be “a force for good” and something that can grow our tourist and visitor economy and be a real—

Will the minister give way?

Will the minister take an intervention?

The minister must conclude.

I apologise; I would have been more than happy to engage.

The minister is in the final minute of his speech.

Tom Arthur

I will just make this final point. As I have said, I am very grateful to members across the chamber for their contributions. I recognise the position of the Conservatives in opposing the general principles of the bill. However, as I set out a number of months ago, I am very happy to engage with members who may oppose the general principles but who are committed to working to ensure that the bill is as effective as possible. On that basis, I say to any members who are considering lodging amendments that I appreciate that that is their right and that they can do so at their discretion, but if they wish to engage with me first to explore what we can do in partnership, my door is very much open.

I will conclude on that note. I encourage members to back the general principles of the bill.

That concludes the debate on the Visitor Levy (Scotland) Bill at stage 1.