Seòmar agus comataidhean

Okay, thank you.

I am not asking you to put a figure on it. I am asking what your definition of a fully funded freeze will be? What does it mean for it to be fully funded?

The First Minister has also said that the commitment to fully fund the freeze means that councils would be able to maintain their services. Now, obviously, financial planning means that councils will have already been planning what level of council tax they might set, in advance of the announcement. If the funding falls short of that and councils have to either reduce services or make redundancies, what would be the Government’s response?

The committee is grappling with the simplicity and transparency of a flat rate versus the fairness of a percentage rate. I want to delve deeper into the concept of the percentage rate. If the percentage rate is applied purely to the accommodation provided and not to breakfast, spa and gym facilities, for example, is there potential for avoidance of the levy? For example, a hotel that offers those extra services could essentially minimise the accommodation price on a bill and inflate the other services, but still maintain parity on the price. Is that a mechanism for avoidance of the levy, or at least for minimising the levy, if we go down a percentage route? Does anyone have views on that?

Leon Thompson, you have also flagged concerns about how the levy would interact with online travel agents and third party booking sites. Do you have any more clarity or information to provide on how that will work in practice?

I have a final question for Leon Thompson. Has UKHospitality Scotland done any modelling of the impact of a levy on non-accommodation businesses—on bars, restaurants and entertainment venues? Do tourists come with a fixed pot of money that they have to spend? Will taking money out of that cost those other non-accommodation businesses?

Thanks for that.

Finally, I have a catch-all question just to get people’s views. If this legislation is passed and implemented, what should we be tracking a couple of years down the line? What would define the measure of success? What should we be reviewing to track whether this is working in a positive way and not damaging the sector?

I have a question about the financial memorandum and the modelling of costs for businesses, particularly smaller ones and microbusinesses. Has the cost burden that will be placed on those businesses been adequately reflected in the memorandum? Has, for example, the potential for some of those businesses to be pushed over the VAT threshold been properly recognised and modelled?

I will ask Gary Curley to respond first, as he touched on this earlier.

It was whether the financial memorandum reflected the cost burden that will be put on small businesses, particularly with regard to their being pushed over the VAT threshold.

Please.