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Visitor levy passes Stage 1 in Scottish Parliament but cruise ships not included

Publication: The Orkney News

The visitor levy being proposed, which is used in many European countries, would not apply to cruise ships calling into and staying overnight in Orkney.

A view of Orkney

A bill which would give Scotland’s local authorities powers to charge a visitor level, or tourist tax, has passed Stage 1 in the Scottish Parliament – with 86 votes in favour and 30 votes against from the Scottish Conservative and Unionist Party.

Before any such tax is implemented, councils would have to consult  local businesses, communities, and tourism organisations, on the effect it would have. The visitor levy, which is used in many European countries, would not apply to cruise ships calling into and staying overnight in Orkney.

Tom Arthur, the Minister for Community Wealth and Public Finance in the Scottish Government explained to MSPs that: “Under the bill as introduced, a visitor levy will be a percentage rate of the cost of accommodation, with the rate being set by the local authority. We have chosen that model for its simplicity and proportionality. It means that a levy will reflect visitors’ ability to pay and it will adjust automatically as prices change through the seasons.

“The model also means that any visitor levy that is paid will reflect the type of accommodation – from five-star hotels to campsite pitches. However, we are aware of the calls from the industry and some local authorities to change the basis of the charge to a flat fee. A flat-fee model has its own merits, including ease of collection, but it sacrifices the fairness that is inherent in a percentage rate.”

Although the proposed legislation will not apply to cruise ships, it will apply to campervans – but only if they are staying in official campsites. It will also not apply to those who are using overnight accommodation due to homelessness or those fleeing domestic violence.

Collecting a visitor levy will require a robust IT system and VisitScotland are putting together an expert group in the industry to advise on this. Some local authorities have already been investigating having a visitor levy but the Scottish Government, if the legislation is enacted, will have an  18-month implementation period for it.

Tom Arthur said: “The visitor levy is a new power that will enhance local government and create opportunities to generate significant revenue for investment in our local tourism economies. It will be a discretionary power, should the legislation be passed.”

Orkney is the UK’s top cruise ship destination with many businesses benefitting from it. But there are also many, especially outwith Kirkwall which do not. When large cruise ships visit, or when there is more than one on a given day, road closures result in people with mobility issues and local businesses struggling to access the main thoroughfare.

Cruise ships are also major polluters adding to the climate emergency. The large influx of people that cruise ships bring has also resulted in the most popular visitor attractions becoming crowded and suffering damage, as at the UNESCO Neolithic Ring of Brodgar.

The number of cruise ships expected to visit Orkney in 2024 is 254, between 18 March – 26 October. As with eother rural and island locations in Scotland, visits by campervans have also increased significantly.

Commenting after the debate, Orkney constituency MSP Liam McArthur said:

“Giving local councils powers to address the challenges they face is something instinctively I support. In theory, allowing councils the option of setting a visitor levy to raise funds for investment in infrastructure and services is a sensible measure.

“As things stand, however, the bill brought forward by the Scottish Government is too rigid, overly bureaucratic and unfair in the way it would apply to some parts of the tourism sector and not others, notably in relation to cruise passengers.

“There is still time to address these shortcomings during the scrutiny process, and I plan to lodge amendments at Stage 2 and 3 in a bid to do this. However, Ministers need to recognise the scale of what will be required if this bill is to provide the clarity, flexibility and fairness that the tourism sector and wider public expect”.