Tourist tax to be unveiled in Edinburgh ‘within 12 months’

A tourist tax planned for Edinburgh would be in place by next summer under the ambition of the Scottish capital’s council leader.

Council chief Adam McVey said he believed the controversial levy, which could see £1 to £2 a night added to hotel guests’ bills, would be introduced in time for Edinburgh’s 2019 festival programme. The local authority is pushing ahead with bold plans to introduce the tax, which would make Edinburgh the first UK city to adopt such a levy.

The payments are aimed at reaping extra funding to improve the city at a time when the council has been battling with budget deficits. Estimates suggest the move could raise £11 million a year in extra revenue.

But the cash grab has been criticised by the Conservatives, who have claimed there is no guarantee the money will be spent in Edinburgh.

The tax has been branded a transient visitor levy (TVL) by the council.

Initial proposals for the policy were met with resistance by the hospitality industry.

But Mr McVey said he was confident the policy would gather support, saying he was hopeful the Scottish Government would give the scheme its stamp of approval within 12 months.

He said: “I think we have made quite a lot of progress. We’ve started the discussions with the sector – having the key industry players around the table. I think in a year’s time or so, we will have a TVL of some sort.

“Directly to the government, we have engaged with them pretty consistently, articulating what we want and to be fair to them, we have listened to what they have said in terms of the circumstances that they would entertain it.

“Fiona Hyslop said any scheme would require engagement with the industry and that’s exactly what we’re doing.

“We have taken a far more robust and professional approach and I’ve noticed a huge amount of openness to the idea in some quarters that were fairly dismissive of our previous attempts as a local authority.”

The levy has been among the most ambitious proposals put forward by a coalition administration which has set about bringing in a low emissions zone and set out plans to extend the tram line to Newhaven in Mr McVey’s first 12 months in charge.

The council has also set itself ambitious house-building targets, made progress through its homelessness task force and is set to re-establish a poverty commission.

In a wide-ranging interview with The Scotsman, Mr McVey – the youngest ever leader of the authority – also said:

n Small, independent businesses would be major winners from plans for cars to share lanes with trams along an extension of the rail route down Leith Walk to Newhaven;

n His administration intended to push ahead with holding regular clean air car-free days in the city similar to those run in Paris;

n The ban on advertising boards on pavements would make Edinburgh more accessible for visitors and residents.

Councillor Graham Hutchison has branded the tourist tax proposal a “prolonged and embarrassing charade” amid fears the move could drive away tourists.

The Tories have pointed out while other European cities have a tourist tax, VAT  for hotel bookings is charged at a lower rate in those countries.

But council leaders have claimed the Scottish Government is coming round to the prospect of having a tax on hotel rooms across the country.

Cosla’s resources spokeswoman Gail Macgregor revealed last week she has held talks with finance secretary Derek Mackay about the prospect of the TVL and claimed his attitude was softening.

“I think he’s a little bit more open-minded than he was before,” Ms Macgregor said.

Edinburgh’s minority administration needs the support of at least one opposition group in order to pass policies at City Chambers after the resignation of two councillors, Lewis Ritchie and Gavin Barrie, from the SNP group.

Mr McVey said: “By needing to get that consensus, I think it has pushed us to be bolder in the last year and I think it will push us to be bolder in the next four years.”