Kezia Dugdale: Capital needs tourist tax now, so why delay?

In January the Finance ­Secretary, Derek Mackay ­announced that local government would be given the ­powers they need to enable them to introduce a Transient Visitor Levy, better known as the tourist tax.

Tuesday, 26th March 2019, 5:00 am
Tourists stop for a picture in Princes Street Gardens. Picture: Scott Taylor
Tourists stop for a picture in Princes Street Gardens. Picture: Scott Taylor

Devolving these powers to local government would give councils like Edinburgh the opportunity to raise much needed revenue against the backdrop of the swingeing cuts being handed down by the recent SNP budget.

I’ve been a firm believer that a ­modest levy, which could be ­ringfenced to support the upkeep and invest in our tourist infrastructure, would bring considerable benefits to the city.

Asking visitors to Edinburgh to contribute towards the city’s upkeep is common practice across much of Europe, with tourist taxes established in many other cities including Paris, Amsterdam and Berlin.

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Every summer my inbox is overwhelmed with emails from Edinburgh city centre residents angry about what is, in buzzword land, referred to as ‘over-tourism’, a concern that an old and historic city with a unique character may be in danger of losing the assets and appeal that makes it so desirable in the first place. A tourist tax is a way of managing this and would mean that the city can continue to grow from the benefits that tourism brings, but also reap the rewards of ever-increasing numbers to the ­benefit of local residents.

As we’ve seen with the proliferation of Airbnb and other short-term lets in the city, all of which would also be ­subject to a tourist tax, it can feel and look as if the city centre is being ­hollowed out with fewer permanent residents making way instead for ­tourist accommodation. Even those behind the short-term letting platforms support a tourist tax as it ticks the box for them to help evidence the benefits they believe they bring to cities.

However, in yet another blow to local government, last week the ­Cabinet Secretary for Culture, ­Tourism and External Affairs, Fiona Hyslop MSP, said that it would likely be 2021 before the Scottish Government would allow authorities to implement tourist taxes, due to the legislative process of the Scottish Parliament. This delay is unacceptable, shows contempt for local government and will be to the detriment of Edinburgh.

Edinburgh Council had already accounted in its budget for the income from a tourist tax for the next financial year, which due to this delay will now result in an extra £10 million of cuts being made to the already ­overstretched budget.

Estimates have shown that the introduction of a tourist tax in Edinburgh could raise up to £14.6m each year and this could go some way to mitigating the £23m already cut from the budget by the SNP.

There is widespread support for a tourist tax across Edinburgh, including from business, and overwhelming support from local residents. Delay simply means subjecting the city to even more damaging budget cuts.

Last week in the Scottish Parliament, I challenged Fiona Hyslop on the reasons for the delay and to highlight the negative impact withholding a tourist tax will have on the city’s finances. Instead of addressing the issue, the minister hid behind ­consultations, reviews and parliamentary process, all the hallmarks of the SNP Scottish Government in office.

Kicking this decision into the long grass instead of acting now and delivering the much-needed powers down to local government to help mitigate the worst of the cuts is cynical.

It’s simply not true that the SNP Government couldn’t act now to introduce the necessary legislation. In fact, it could be done in as little as 100 days.

Instead, the decision to delay the ability for Edinburgh Council to introduce a tourist tax until 2021 will mean even deeper cuts to the council budget.