Chamber and committees

That is why we require negotiation.

To understand what planning assumptions local authorities have made is one reason why we have committed to the process of negotiation. Through that, we will arrive at a quantum which meets the commitment to fully fund the council tax freeze. I can appreciate the line of questioning that you are pursuing, Mr Griffin; it is perfectly fair and valid to seek to interrogate me, as a minister, on that. However, having given that commitment to a council tax freeze that is fully funded and delivered in partnership with COSLA, it is important that that process of negotiation and consideration is allowed to take place.

We have already made meaningful progress. I referred earlier to the consultation on council tax premiums for second homes, which is a commitment that we have jointly arrived at with COSLA. I have introduced the legislation on that, which I understand that the committee will be considering in due course. That demonstrates the progress that we have made to date.

We continue to have engagement through the joint working group, which will explore ways in which we can meaningfully make improvements to the council tax system, including looking at options for longer-term reform. As part of that, we have committed to a process of a deliberative engagement with COSLA, recognising that it is a priority that we share and that there will be a desire to further advance that work as we go into the new year.

It is an important question. After all, it helps to think about post-legislative scrutiny right at the outset, even though we are still to have the stage 1 vote.

There are two aspects to think about, the first of which is the opportunity for continuous monitoring based on those local authorities that choose to introduce a visitor levy. They will be required to report after 18 months, with the introduction of an annual review after three years, and that approach will in itself provide a degree of data that can be interrogated and analysed to understand how the visitor levy is operating in particular areas.

I think that any issues that might be raised or suggestions for improvement that are made on the framework for administration as set out in the legislation will come out through the work on the new deal with local government, with the Verity house agreement and that close engagement with local government. Parliamentary engagement with local government through COSLA would, through the cumulative process of different local authorities taking forward the levy, afford opportunities for learning with regard to any suggested improvements or ways of measuring the impact, both cumulatively across Scotland and within individual local authorities. What would be equally important from a Government perspective would be the opportunities through the new deal for business and that close engagement for feedback and consideration, including on the cumulative impacts of a visitor levy on other legislative or regulatory requirements. Again, relevant parliamentary committees that engage with business would have that opportunity, too.

With regard to being able to anchor that objectively in data, the reporting and review requirements that are set out in the legislation for local authorities would, in the first instance, give an indication of what impact a visitor levy is having and whether a visitor levy in a specific local authority is meeting the objectives set out in the scheme. Over time, as we go through that process, learning will take place. There will be a process of learning and engagement for any local authority that takes forward the visitor levy. Through consultation with businesses and their communities, local authorities will have opportunities to determine what works best. I imagine that, through the review process, there will be a reflection on what has worked well and what has perhaps not achieved the aims that were set out. That will inform future iterations of the visitor levy, should a local authority choose to continue with it. Through the review and reporting and the on-going dialogue that takes place between business, local government, Parliament and the Scottish Government, there will be ample opportunity to evaluate and measure the impact of the legislation.

Scotland is a world-class tourist destination, and that is down to the professionalism, dedication and hard work of all the people who work across the visitor economy in Scotland. The bill is about creating a discretionary power for local authorities, which are democratically accountable to their electorates. They will be able to determine whether to use the power to raise additional revenue to invest in the visitor economy. That is why we have put at the heart of the bill a requirement for local authorities that wish to introduce a visitor levy to consult and to set out what they understand would be the impact of the levy.

I see that power having the potential to generate valuable extra investment to enhance, support and develop the world-class offering that Scotland already has. Such local flexibility is important, because it will allow local authorities that are considering introducing a levy to develop—in consultation with business, their communities and other interested parties in their area—a levy that will add value and provide a significant return on investment.

I recognise, as does the Government, the immense contribution that the visitor economy and the accommodation sector make to Scotland. We see the bill as providing an opportunity for the proposed discretionary power to be used to help to enhance that offering.

As I touched on in my opening statement, I very much recognise the importance of getting the right balance between ensuring national consistency and avoiding any unnecessary administrative variation. We are talking about allowing local areas to have the flexibility to respond to the assets and needs of their particular areas. What would be a powerful and logical investment in the visitor economy here in Edinburgh might not necessarily be so in another part of Scotland—for example, in the Highlands.

We are seeking to provide local flexibility to allow local authorities, through consultation with business and those who are active in the visitor economy in their area, to ensure that revenue is raised and that the way in which revenue is raised through the visitor levy scheme is appropriate, responds to those local circumstances and gets the best return on investment for each particular area.

I do not believe that the expert working group has had specific discussions on that. More broadly, digitisation of public services is a significant area, as we have discussed in many committee meetings. It has also been discussed as part of our broader work and engagement on changes and improvements to the administration and operation of the non-domestic rates system, although that is more of a medium-to-long term piece of work. It is a live matter.

We would have to consider the timelines for when such a system would become operational, and we would need to consider its scope. There is an interesting point to be made about variation between authorities. The bill allows two or more authorities to work together to develop a visitor levy for a particular area. That is of particular interest for our national parks. There are a number of factors to consider.

I am conscious that, should the bill progress through Parliament and be approved in a reasonable timescale, the earliest that a visitor levy would become available or go online would probably be the first half of 2026. There would be a question about whether a new platform would be developed and operational by that point. I will be keen to pick up discussions regarding administration of that from a local authority perspective, in considering amendments ahead of stage 2.

I appreciate the point that has been made by local government colleagues about ensuring maximum flexibility, but we all recognise that we want a system that commands the full confidence of business, through ensuring that operation of the system is as straightforward and streamlined as it can be while allowing local autonomy so that, ultimately, the revenues that are raised can be reinvested in the way that is most impactful and that gets the biggest return on investment for the visitor economy.

That question is absolutely fair and reasonable. In response, I say that there could be a temptation to get into a prescriptive list of what is in or out of scope, which would clearly be counter to the bill’s intention, which is about fiscal empowerment of local government, so that it can determine how the revenue is spent in a way that is consistent with legislation.

I would not want to prejudge what those who are involved in the visitor economy in an area might regard as priorities for their area. I recognise the concern that you express, which is that the legislation could be interpreted too liberally and the revenue could be used in a way that was felt to be not consistent with the bill’s principle of supporting the visitor economy. That is why we have a provision that requires consultation.

If a local authority seeks to introduce a visitor levy, it will have to set out a scheme that is consistent with the objectives. It will have to consult businesses and the community to capture all the various parties and interests. The local authority will have to set out what it believes the impact will be and it will have to report on that. That will ensure transparency and clarity.

Ultimately, such decisions will be taken by elected members who are democratically accountable to their electorates. If there are concerns about the wording, I will be more than happy to have conversations about that.

However, I do not want to get into ministers devising prescriptive lists of what is within and outwith scope. As well as undermining local autonomy and accountability, which are at the heart of the new deal with local government and what the bill seeks to do on fiscal empowerment, that could have unintended consequences. It is not for me to say what the priority is for stakeholders in the visitor economy in one part of the country; I recognise that that can differ.

It is fair to ask the question. If there are concerns about wording, I am more than happy to explore them further in order to ensure that we get the bill right and that it commands confidence.

I imagine that there will be a desire from local authorities that choose to take forward a visitor levy to learn from what other authorities do. That might particularly apply to neighbouring authorities or to those whose visitor economies share particular characteristics.

It is important to note that the reporting structure that we have set out in the legislation is a locally administered power and is for local authorities to determine. The visitor economy in Edinburgh will be different from that in parts of the Highlands. The structure allows for local evaluation of the effectiveness of the visitor levy.

The requirement for transparency—which will include separate accounting, reporting on consultation and a review—will ensure fair and thorough evaluation of how the scheme is operating. That information will be transparent and will be available to all who want to engage with or consult it or who want to use it as the basis for their engagement with a local authority on the visitor levy.

That would be a matter for COSLA and for local government. I am sure that there will be a recognition that we can all learn from each other and that any local authorities that are considering introducing a visitor levy will be keen to understand the experiences of other authorities that may already have introduced one.

It is for Parliament to determine its interests, but I can imagine it responding to the aggregate feedback about how the administrative framework provided for by the legislation is operating and, in the medium to longer term, considering the broader impact on Scotland’s visitor economy. Those will be matters for Parliament to determine. Subject to the legislation passed by Parliament, the Government, as part of the new deal with local government, will continue engaging closely on those matters and other shared priorities.