Nicola Sturgeon announces nation-wide consultation on tourist tax

The Scottish Government will stage a country-wide consultation on whether local authorities should have the power to impose a bed tax on visitors, Nicola Sturgeon has revealed.

The First Minister admitted the government could not ignore the differing views on the issue, but wanted to ensure there was a “well-informed and evidence-led” debate.

She told a national tourism summit yesterday the government wanted to make sure all sides of the debate were heard “properly and loudly”.

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Scottish tourism secretary Fiona Hyslop had previously rebuked Edinburgh City Council leader Adam McVey for pressing ahead with plans for a tourist tax without properly consulting the industry.

First Minister Nicola Sturgeon walks to FMQs. Picture: SWNS
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He was later forced to back down on a bid to bring in the new tax by next summer.

Leaders of the Scottish Tourism Alliance (STA) said they had asked the government to instigate a national debate and independent research on the issue.

The STA warned Ms Sturgeon the possible introduction of a tourist tax was a bigger industry concern than the impact of Brexit. The alliance will be involved in the consultation, along with local government organisation Cosla, which has argued for councils to get the power to introduce a “transient visitor levy”.

Ms Sturgeon told the STA conference: “As a government, it is our responsibility and duty to do everything we can to support, facilitate and enable your success. That’s why we’ve listened to your views on business rates and set a cap for all, but the very largest hospitality premises and why we remain committed to reducing air departure tax.

“Let me stress this point. We are absolutely determined to ensure that your voice, the voice of industry and the tourism sector, is properly heard in the ongoing debate around a tourism tax. As you know, we have no plans to introduce a tourism tax. However, we do recognise, as you do, that some local authorities are making the case to have the power to do so should they consider that to be an appropriate response to local circumstances. “We believe this issue does require very careful consideration. We will be accepting the STA’s call for an objective process of consultation involving the STS, Cosla and other key partners, which will examine in detail the arguments for and against a tourist tax. We’re determined that all voices will be heard and that the process will be properly informed.”

Interviewed on stage by STA chief executive Marc Crothall, Ms Sturgeon said: “The first thing to recognise is that there are different views. We cannot ignore that fact. A debate is going to happen around this whether the government wants that or not.

“Let’s embrace it and make sure it is a well-informed and evidence-led debate, where all of the different voices are heard properly and loudly. Let’s have a national discussion and conversation that leads us to a decision that is right for the country and the industry.” Mr Crothall said: “The biggest issue facing our industry today is the call by some councils for Government to legislate to allow them to introduce a tourist tax.

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“The 20-plus trade bodies of our member council remain unanimous in their view that taxing visitors more given current economic uncertainty, tax regimes already in place, rising business costs and our biggest market –Scots and UK residents – seeing household budgets squeezed is without question not the right thing to do, especially as we head towards the unchartered waters of Brexit.

“Before any decision is taken there must be an objective, well-informed, national discussion, with all key stakeholders, industry, residents, visitors of all types and the wider business community, rather than decisions be based on emotional outcomes driven by local debate.

“Importantly, robust economic modelling and independent research needs to be conducted too.”

Robin Worsnop, chair of the Edinburgh Tourism Action Group, the main industry body in the city, said: “I think it’ll be a good thing to actually get down to the economics of it all and look at the whole issue.

“There are various different views across the whole sector. Industry wants what is best for its long-term future. There are very different views on that. There is not unanimity on this.”

Cllr McVey welcomed Ms Sturgeon’s announcement, but stressed the importance of the city council being allowed to develop its “own plans”.

He added: “Edinburgh has one of the highest occupancy rates in Europe with a growing demand for hotels. I hope our local circumstances will be reflected in the national conversation.

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“Over the last few months we’ve heard a range of views from the industry, key stakeholders, residents and tourists themselves.

“I’m confident that by adopting the same inclusive approach nationally, the evidence in support of Edinburgh’s plans will continue to grow.”