Chamber and committees

There may be more questions about that. We could ask the Scottish Government for information on the councils that have had to use their reserves and on those that are considering using them.

I also want to ask about national policies that require local authorities to assist in their delivery. To what extent does COSLA ensure that policies that are to be delivered by local authorities are appropriately funded, and that they can be properly maintained in line with inflation and in consideration of potential additional demands that might emerge? What framework currently exists, and what should be coming through the Verity house agreement? What does it look like now, and what needs to change?

Good morning, and thanks for joining us. I will start with a question about how the Scottish Government would respond to the directors of finance—a few of whom we have heard from as we have been looking at the budget—that there is no more room for efficiency savings. What would the minister say to councillors who are now looking at potential cuts to non-statutory services?

I will ask another question afterwards.

Good morning, and thank you for joining us. My first question is about COSLA’s hopes for the European Charter of Local Self-Government (Incorporation) (Scotland) Bill, which we expect to come back to Parliament for the reconsideration stage. How could that help, especially in relation to the financial situation that we have discussed this morning?

Katie, would you like to come in first on that?

The percentage of empty properties in rural and remote areas is higher than the Scottish average. In a written response to me just before Christmas, the minister outlined how the Scottish Government’s £25 million of rural affordable homes funding had generated zero homes. What work is the minister doing to use that money to target and audit empty homes, especially those in the social rented sector?

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.

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

Will Ross Greer take an intervention?

Will the minister take an intervention?

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.

To ask the Scottish Government what it is doing to address any challenges in relation to the accessibility of traditional skills programmes to ensure that young people have access to the same career opportunities. (S6O-02948)