Hansard

I am pleased to speak on behalf of the Local Government, Housing and Planning Committee. I thank everyone who gave evidence to the committee, including councils, accommodation providers, national booking platforms, small family businesses and island communities, and the many individuals who took time to share their views. We are grateful for their contribution to our scrutiny.

The bill does four main things. To ensure that we are clear, I will spell them all out. First, it will provide flexibility by allowing councils to charge a visitor levy on the basis of a fixed amount or a percentage of accommodation costs. Secondly, it will allow tailored rates so that councils can set different amounts by place, by season or by type of accommodation to suit local circumstances. Thirdly, it will bring clarity to the administration of bookings that are made through third parties when an online agent or tour operator is involved. The charge will be based on the first transaction between the accommodation provider and the third party. Finally, it will deliver simplicity through levy returns being based on when guests stay, not when they book.

I will cover the committee’s consideration of the bill and what we recommended as a result. We launched a call for views as soon as we were designated as the lead committee for consideration of the bill at stage 1, and we received 60 responses. We took oral evidence from those in local government, from representatives of the tourism industry and accommodation providers and, finally, from the Minister for Public Finance.

The committee welcomes the Government’s response to stakeholders’ calls for greater flexibility. We support giving councils a clear choice of charging a percentage rate or a flat rate for each scheme, so that they can pick what best fits with local circumstances. We heard that a percentage-only model could be hard to operate in practice, especially for smaller operators.

However, we recognise the risk of creating a complicated landscape across Scotland, and even within council areas, so monitoring will be essential. The 2024 act requires a report on the visitor levy three years after the first scheme comes into effect. However, that is a one-off, not an on-going, mechanism. On-going engagement with councils and other stakeholders, which the minister referred to in his written response to the committee, will be important.

The current uncertainty about whether a single chargeable transaction could be caught by more than one scheme is unhelpful. Therefore, we recommend that the Government clarifies the position through amendments. I welcome the minister’s commitment to consider that ahead of stage 2.

We support allowing for a range of fixed-rate options. That will let councils tailor schemes, maintain a progressive element to the levy, protect lower-income visitors and support rural and island economies. However, we also recognise stakeholders’ views on the practical difficulties that could arise with a per-person, per-night approach, so we recommend that the Government clarifies how the model will work. I note that the minister has said that that recommendation is being considered ahead of stage 2.

Some councils have already consulted on a percentage scheme and have announced plans to progress with the visitor levy. What options are available to those councils now? We heard that a requirement to consult again and adhere to an 18-month transition period before introducing a fixed-rate scheme could create delay and disruption. Therefore, we welcome the minister’s commitment to lodge amendments on those periods when appropriate. The minister told us that that was

“one area where there will absolutely be changes.”—[Official Report, Local Government, Housing and Planning Committee, 3 February 2026; c 11.]

However, the Government’s response to our stage 1 report says:

“We are considering these matters ahead of Stage 2”,

so it would be helpful if the minister could confirm today what those changes will be.

We support the clarification in the bill that, when that parties are involved, the initial transaction between the accommodation provider and the third party is the chargeable transaction. That avoids double charging and improves certainty.

We support the regulation-making powers to resolve operational issues quickly but not to rewrite fundamental policy without full parliamentary scrutiny. I acknowledge that the minister’s response regarding the broad regulation-making powers was:

“this provision would not apply to changes to the basis on which the levy is charged. We consider that such significant changes are best made through primary legislation”.

That is welcome. However, it would be helpful if the minister could address whether the language in the bill is sufficient to rule out significant changes through subordinate legislation.

Finally, a word on timing: the timetable was challenging. I acknowledge that some of the provisions in the bill will support the smooth implementation of the first scheme in Edinburgh, which is due to commence in July, and that it is therefore helpful that the changes have been proposed now. However, we cannot ignore the fact that some of the issues that are addressed in the bill arose during consideration of the original bill back in 2023.

We support the general principles of the bill. Local flexibility absolutely matters: councils and accommodation providers should have the flexibility to design schemes based on local circumstances.

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