Chamber and committees

Amendment 50 relates to the evaluation of the legislation, which the committee raised in its stage 1 report. As the Government noted in its response, the bill already contains provisions requiring individual councils to report on and review their visitor levy schemes. Under section 18, a local authority will have to report each year on its visitor levy scheme. Under section 19, a local authority will have to review its scheme within three years and publish a report of its findings.

A national-level evaluation would need to happen in partnership with local government and would best take place once many visitor levy schemes had been established and had operated for a length of time that was suitable to enabling a longer-term assessment of their impacts and of behavioural changes among tourists across Scotland.

Mark Griffin made a point about ensuring sufficient time before consideration of the overall impact and outcomes of the operation of multiple visitor levies. Therefore, although I understand the motivations behind Miles Briggs’s amendment 50, the Government cannot support it.

I also note that regulation-making powers in the bill cover a range of areas. That will allow the Parliament to respond as circumstances develop and change. However, I recognise the committee’s interest in the issue of review, which was touched on at stage 1. I am keen to explore how the Government can facilitate the wider process of review once a number of visitor levy schemes are up and running, in order to identify how different schemes are operating in different parts of the country, and what their impacts and outcomes are. I am happy to consider how we can provide more assurance around that process.

I am conscious that we have a number of items to discuss at a meeting so, if Miles Briggs or any other member who is interested is content to add that issue to the agenda, I will be happy to explore it.

As Mark Griffin suggested, review after one year would be premature. Ultimately, the bill is about fiscal empowerment of local government. There are mechanisms for local government for review after three years. We would not want to duplicate reviews that local government had already carried out. However, I recognise the interest in the aggregate impact of multiple visitor levies operating across Scotland. The committee has raised a fair point. I am keen to discuss whether the solution to that should be by legislative or other means, and to come to a consensus on that ahead of stage 3. On that basis, I ask Miles Briggs not to press amendment 50.

Amendment 17, in my name, will make a change to section 36 in response to the Delegated Powers and Law Reform Committee’s scrutiny of the bill at stage 1.

Section 36 sets out some of the inspection powers of a local authority in relation to business premises and documents found there where it is

“reasonably required for the purpose of assessing the liable person’s liability to pay the levy.”

Under the section, ministers may, by regulation, add to the definition of an “involved third party”, and therefore the premises that a local authority or other authorised officer can inspect. The regulations can also specify the type of documents that can be inspected there.

The DPLR Committee believes that any such regulation should be subject to the affirmative procedure. The Government has lodged amendment 17 to fulfil that committee’s recommendation, so I ask the committee to support it.

I move amendment 17.

I appreciate the point that Sarah Boyack has made. I highlight that the power is a discretionary power for local government to implement after consultation and engagement and the points that I touched on earlier about looking at how we can strengthen the process of engagement ahead of stage 3. It will be for the process of local engagement and consultation with businesses, tourism organisations and community organisations in a particular area to best determine how revenue that is raised through a visitor levy can be best applied to support the visitor economy. That is why I make the point that, if there are concerns that the current drafting of the bill would preclude what would be regarded as use to support the visitor economy in a particular area, I am happy to have discussions about that ahead of stage 3 and to consider how we can refine the wording in partnership with local government and, crucially, the tourism sector.

Amendments 21 and 25, in the name of Sarah Boyack, would remove the words “for leisure purposes” from sections 12 and 17 of the bill so that the objectives of a visitor levy scheme would no longer have to relate to facilities or services that are

“substantially for or used by persons visiting the scheme area for leisure purposes”,

and funding would also no longer be linked to those visiting an area for leisure purposes. I understand Sarah Boyack’s wish to expand the objectives of a visitor levy beyond just those visiting for leisure purposes. However, the Government has responded to that point, and it lodged amendments 9 and 10. As I said earlier, uses such as for housing and regeneration are not precluded if a local authority chooses those. The Government believes that amendments 9 and 10 are a better option on that issue, so I ask Sarah Boyack not to move amendments 21 and 25.

Sarah Boyack’s amendment 23 would alter the permitted use of proceeds by removing section 17(1)(b) from the bill. In contrast to Sarah Boyack’s other amendments, it would mean that a local authority could use the proceeds only for facilitating a visitor levy scheme’s objectives. If those objectives were met, a local authority could not use any money raised in another way that is related to the visitor economy. The amendment would remove a sensible measure and restrict local government in the use of the funding raised by a visitor levy. It would tie the hands of local authorities to only being able to use money raised by a visitor levy in a way that would be unhelpful as circumstances change and new opportunities arose. I note that amendment 23 contradicts the position in Sarah Boyack’s amendments 20 and 24, but I appreciate that she is exploring a variety of approaches to those sections of the bill. For those reasons, the Government does not support amendment 23, and I ask Sarah Boyack not to move it.

The committee’s stage 1 report highlights the

“calls for the Bill to be amended so funds can be invested in services or facilities used by visitors travelling for business purposes as well as by those doing so for leisure.”

In response, the Government considered that issue and lodged amendment 9, which is in my name. Amendment 9 relates to section 12, which sets out the steps that a local authority must take before introducing or modifying a visitor levy scheme. Those steps include preparing a statement of the objectives of a visitor levy scheme. As mentioned, section 12 requires the objectives to

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

Amendment 9 would change that requirement in relation to a scheme’s objectives so that it would refer to facilities or services used for leisure or business purposes or both.

Amendment 10, in my name, deals with the same issue at section 17 of the bill. It would place a duty on a local authority in relation to business visitors and the use of proceeds of a scheme.

As we have heard, section 17 requires the proceeds to be used for the scheme’s objectives or for

“facilities and services which are substantially for or used by persons visiting ... for leisure purposes.”

Amendment 10 would amend section 17(1)(b) so that the other purposes refer to facilities or services used for leisure or business purposes or both. That reflects a sensible enlargement of the purposes for which funding raised by a levy could be used, with the support of local government and the tourism industry. I therefore ask the committee to support amendment 10.

I note that Miles Briggs’s amendment 46 would amend the bill so that a local authority setting up a visitor levy scheme would have to specify the manner in which it would decide that

“any net proceeds raised in a specified area”

could

“only be used in that specified area”.

The question of limiting the use of visitor levy-raised funding to the area where it was raised was considered by the committee at stage 1. The committee’s stage 1 report noted that such an approach would

“fail to provide for ambitious, strategic, long-term investment”,

and the Government endorses that point. We want to give local authorities the freedom to make the strategic investments in their visitor economy that the levy can facilitate. I therefore ask Miles Briggs not to move amendment 46 and, if he does, I ask the committee not to support it.

Finally in this group, Sarah Boyack’s amendment 22 would reduce the 18-month implementation period to 12 months. The Government believes that there is a strong case for the 18-month implementation period. Eighteen months provides adequate time for local authorities and businesses to put in place systems and train staff to effectively collect and administer a levy.

In our 2019 public consultation on the levy, 82 per cent of respondents supported a timeframe of at least one financial year following the conclusion of consultation and engagement activities. That was also supported by 16 of the 18 local authorities that responded to the question. Eighteen months is also the timeframe recommended by the European Tourism Association.

The Government therefore does not support amendment 22. I ask Sarah Boyack not to move it and, if she does, I ask the committee not to support it.

As I just touched on, I would be more than happy to meet Mr Briggs, and I would be more than happy to meet Daniel Johnson on that issue. Guidance will be produced and, subject to the committee’s agreement to my amendment in a later group, it will be put on a statutory footing, which would give it a strong basis. That would allow for flexibility for local authorities, through consultation with businesses, communities and relevant stakeholders in their area, to determine the best approach for the levy. Through guidance, and by giving clarity, information and support to assist local authorities in implementing a visitor levy, we can minimise administrative burdens and allow the most effective outcomes.

Amendment 15 would insert a new section on guidance on a visitor levy scheme for local authorities. It would create a duty on VisitScotland to prepare and submit to ministers guidance on a visitor levy, and to review it “from time to time”. The Scottish ministers would have the power to approve, reject or require modifications to the guidance. When introducing and administering a visitor levy, a local authority would be under a duty to “have regard to” that guidance. The amendment would also allow Scottish ministers, through regulations, to substitute another body for VisitScotland, if they wish to do so in the future.

As committee members might recall, the expert group that brings together local authorities and tourism industry bodies is working to produce guidance for local authorities on a visitor levy. I welcome that co-working in the spirit of the new deal for business, and I look forward to seeing the guidance that the group will produce. Amendment 15 will give national guidance formal legal status once it has been agreed by ministers. That will give local authorities clarity on the good practice that they should follow as they consider how best to consult on, introduce and administer a visitor levy. I ask the committee to support the amendment.

I move amendment 15.

It is currently under development. We still have to go through the parliamentary bill process, but we want that advice and guidance to be available at the earliest opportunity. I am more than happy to provide the committee with a written update on expected timescales around the work that the group is undertaking.

For the reasons that I have set out, and expanded on in response to interventions, the Government does not support amendment 42 and I ask Miles Briggs not to move it.

Turning to Pam Gosal’s amendment 11, I note that the bill already includes a requirement for a local authority to consult with businesses when it is considering introducing a visitor levy. That includes consulting on the objectives of the proposal and how the local authority will measure and report on the achievement of those objectives. That means that there is already a clear role and opportunity for businesses to engage and make known their views on a visitor levy. For decisions on the use of the funding raised by a visitor levy, the general position is that they should rest with the local authority. Any visitor levy scheme would be introduced by a local authority and it would be democratically accountable.

Nevertheless, section 17 of the bill places a duty on authorities to consult when using the proceeds of a visitor levy, including a specific duty to consult with businesses engaged in tourism. I think that that strikes the correct balance, as opposed to the amendment 11 duty to include businesses in the decisions. However, I am open to ways of ensuring on-going and meaningful engagement on a visitor levy with communities and businesses, and I will consider that further in the weeks before stage 3. Given the democratic accountability of local authorities and the duties around consultation that are already in the bill, the Government does not support amendment 11 and I ask Pam Gosal not to move it.

Finally in this group, I turn to amendment 16, which seeks to allow an overnight accommodation provider to retain 20 per cent of the visitor levy that is raised in the period of their first return to a local authority. The Government does not support amendment 16. Like Daniel Johnson, we are not aware of any precedent in the UK where a business collecting tax is able to extract from their returns a sum to meet the costs of administering a tax. Although we have sought and will seek to keep the administrative costs of a visitor levy as low as possible, we do not think that allowing accommodation providers to retain some of the levy collected to meet administrative costs is the right approach.

There are other issues with amendment 16. The period for a return under the bill could be one month or several months and could fall in low or high season, meaning that the 20 per cent deduction could vary hugely. For all those reasons, the Government does not support amendment 16, and I ask Pam Gosal not to press it.

Given the significance of creating a new levy power, it would be appropriate to introduce a cruise ship levy through primary legislation, as we are doing with the visitor levy. Should we be in a position to introduce a cruise ship levy by amending the bill that is before the committee, that would provide a means to do that, but if that is not possible, we will look for another vehicle to do that.

As I highlighted, given the significance of introducing such a new discretionary power for local authorities, that would, on balance, make us lean towards the use of primary legislation, although we would, of course, take the views of Parliament on the matter into account.

If I may, convener—

Although a cruise ship levy is related to some of the policy intent and motivation behind the visitor levy, it is distinct, so we would have to consider that on a case-by-case basis.

What has emerged from the work on the visitor levy and what is reflected in the bill as introduced is the importance of engagement between local authorities, business and communities, and the high regard in which that is held. We would consider proposals in partnership with COSLA and business, and we would be more than happy to engage with other members on the development of proposals for a cruise ship levy, which would, of course, be subject to public consultation. That would help to inform the approach that we would take.

Broadly speaking, we would want to be consistent with the principles and the broad approach with regard to engagement and facilitating engagement that we are taking in relation to the visitor levy. The details of a cruise ship levy would follow from our process of engagement and public consultation. As I said, we would be more than happy to engage directly with elected members, COSLA and individual local authorities that have a particular interest in a cruise ship levy.

I want to mention motorhomes. People who use eligible types of accommodation, such as campsites, will be covered by a visitor levy if a local authority chooses to introduce one. The Scottish Government remains open to engagement and discussion with stakeholders on a wider motorhome levy, and it will consider any developed proposals that will work to support the visitor economy.

Discussions with council and land management stakeholders have highlighted significant issues with a levy on motorhomes, with potential difficulties in application, administration and compliance. You highlighted those difficulties in your remarks, convener. Those difficulties are, however—

In principle, I would want to take an approach that recognises that our island communities are unique and have distinct needs and assets, just as, more broadly, in the structure and organisation of delivery of public services, we provide opportunities for islands to have more bespoke arrangements. That speaks naturally to your point, Mr McArthur. I am therefore more than happy to have exploratory discussions on provisions for a cruise ship levy and a motorhome levy. I caveat that by saying that it is important that what we have in place is robust and that there are no undue burdens around administration and compliance that would, ultimately, undermine the policy intent. In that space, there is an opportunity for further discussion.

On that basis, I will conclude by saying that we have committed to bringing forward a cruise ship levy—I have set out the rationale for that and the underlying approach—and we are open and willing to explore a motorhome levy in more detail.

My final point, for clarity, is that the bill as introduced relates to a taxable event—the purchase of overnight accommodation—that does not easily translate to the very different contexts of booking a cruise ship holiday or hiring a camper van. Levies on those activities are likely to need a different legal framework, involving a different taxable event and different compliance powers. I offer that as a reason for why the Government is unable to support amendments 1 and 2 at this stage, and I ask Liam McArthur not to move them.

I reiterate that, on any aspect of the bill, if there are concerns about definition and about whether the bill will ensure that the policy intent is met, I am more than happy to have a discussion about refining any of the language ahead of stage 3.

I also note that, in the bill as introduced, flexibilities already exist for local government around exemptions and exclusions.