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We have already made meaningful progress. I referred earlier to the consultation on council tax premiums for second homes, which is a commitment that we have jointly arrived at with COSLA. I have introduced the legislation on that, which I understand that the committee will be considering in due course. That demonstrates the progress that we have made to date.

We continue to have engagement through the joint working group, which will explore ways in which we can meaningfully make improvements to the council tax system, including looking at options for longer-term reform. As part of that, we have committed to a process of a deliberative engagement with COSLA, recognising that it is a priority that we share and that there will be a desire to further advance that work as we go into the new year.

It is an important question. After all, it helps to think about post-legislative scrutiny right at the outset, even though we are still to have the stage 1 vote.

There are two aspects to think about, the first of which is the opportunity for continuous monitoring based on those local authorities that choose to introduce a visitor levy. They will be required to report after 18 months, with the introduction of an annual review after three years, and that approach will in itself provide a degree of data that can be interrogated and analysed to understand how the visitor levy is operating in particular areas.

I think that any issues that might be raised or suggestions for improvement that are made on the framework for administration as set out in the legislation will come out through the work on the new deal with local government, with the Verity house agreement and that close engagement with local government. Parliamentary engagement with local government through COSLA would, through the cumulative process of different local authorities taking forward the levy, afford opportunities for learning with regard to any suggested improvements or ways of measuring the impact, both cumulatively across Scotland and within individual local authorities. What would be equally important from a Government perspective would be the opportunities through the new deal for business and that close engagement for feedback and consideration, including on the cumulative impacts of a visitor levy on other legislative or regulatory requirements. Again, relevant parliamentary committees that engage with business would have that opportunity, too.

With regard to being able to anchor that objectively in data, the reporting and review requirements that are set out in the legislation for local authorities would, in the first instance, give an indication of what impact a visitor levy is having and whether a visitor levy in a specific local authority is meeting the objectives set out in the scheme. Over time, as we go through that process, learning will take place. There will be a process of learning and engagement for any local authority that takes forward the visitor levy. Through consultation with businesses and their communities, local authorities will have opportunities to determine what works best. I imagine that, through the review process, there will be a reflection on what has worked well and what has perhaps not achieved the aims that were set out. That will inform future iterations of the visitor levy, should a local authority choose to continue with it. Through the review and reporting and the on-going dialogue that takes place between business, local government, Parliament and the Scottish Government, there will be ample opportunity to evaluate and measure the impact of the legislation.

Thank you, convener, and good morning to the committee. The bill is an important measure and, if passed, will give local authorities a significant new power. A visitor levy can be a force for good, supporting the vitally important visitor economy and bringing benefits to visitors, residents and businesses.

The new deal for business and the new deal for local government are at the heart of the Government’s approach to the measure. We have already taken on board the helpful input that we have had from business, local government and others, and I am committed to continuing that meaningful and constructive engagement as we move forward. This will be the first visitor levy in the United Kingdom, and the Government wants to get it right.

As the lead minister on the bill, I—together with my ministerial colleagues—considered several key policy questions as the proposals in the bill were developed. I will focus on two of those in my remarks.

The first key question was whether it is right to give local authorities this power. The Government believes that it is. Of the 27 countries in the European Union, 21 have some kind of visitor levy, and such levies are commonplace in other locations around the world.

A visitor levy offers councils a significant opportunity: they can use the proceeds to invest in their local economy, bringing benefits to residents and visitors alike. International good practice, highlighted by the European Tourism Association, tells us that local consultation is crucial to a successful visitor levy, and the bill would require a local authority to consult local businesses, communities and tourism organisations. Good local engagement will be really important in ensuring that a visitor levy is well designed and that the funds that it raises are used to best effect.

The second key question that I and ministerial colleagues considered in relation to the bill was the balance between local flexibility and national consistency. That is a common thread going through the on-going debate about whether a national cap is appropriate, the approach that we should take to exemptions and the rules around how funding that is raised by a visitor levy is to be used.

The bill takes a middle way between having too rigid or too lax a national framework. It gives local authorities, which are accountable to their electorates, the ability to create a visitor levy that works for their area, while providing national consistency in areas such as how the levy is charged and remitted. We continue to listen to the variety of views from stakeholders on the balance to be struck between local flexibility and national consistency. We will listen carefully to the committee’s views on that, too.

Another issue that I would like to touch on is the potential for a cruise ship levy. The Government recently announced that we will seek to give local authorities the power to create a cruise ship levy. Policy work on that levy is under way, in partnership with local government. That will lead to a formal public consultation, which will allow all relevant groups to provide their input on the proposal. We may seek to amend the bill to include a cruise ship levy, but that will very much depend on whether the policy development work and the consultation have been completed, and on the view that Parliament takes on the scope of the bill. We do not want to delay the bill and the power that it will give to local authorities if work on a cruise ship levy has not been completed in time for such a provision to be added to the bill.

The bill is about looking forward. It seeks to establish a measure that can deliver sustained investment in the future. It fits with our ambition of fiscally empowering local government and strengthening local democracy, and with the vision that the Government shares with the tourism industry that is set out in the national tourism strategy, “Scotland Outlook 2030: Responsible tourism for a sustainable future”.

I very much welcome the committee’s scrutiny of the bill, and I look forward to members’ questions and the discussion ahead.

Clearly, the question of a national cap is predicated on the measure in the bill to have a percentage rate. That could change, depending on the view that Parliament takes as we move to consideration of amendments.

I recognise why there are calls for a national cap, but I am very much committed to the levy being about empowering local government and doing it in a way that is consistent with the new deal with local government.

Although there are delegated powers in the legislation that would allow ministers to amend and specify details of what is required in legislation, those are useful provisions that would help us to respond to circumstances and future changes, whereas a national cap could be perceived and might well be regarded as an intrusion into the autonomy and decision-making space of local government.

Part of the process of consulting and engaging involves local government assessing the impact that a visitor levy would have. In determining whether the levy should proceed under the bill as introduced, using a percentage rate, local government would want to consider what the economic impact would be, recognising that there is a balance between a percentage level that would raise sufficient revenue to fund the reinvestment in the visitor economy, as set out in the scheme, and a level that was so excessive that it could start to have a negative economic impact.

I would want to trust—as I think we all would—democratically accountable elected members in local government to take that decision, although I recognise the concerns of the industry. I am keen to have further dialogue and engagement on that. It is very important to me that we proceed in a way that is as collaborative as possible—involving business and local government, as well as the views of Parliament.

My instinctive view, as has been reflected in introducing the bill, is that the decision on the level would be for local government to take, but I recognise the concerns that have been raised and I want to explore the point further with local government and business. Of course, I would also take the opportunity to reflect on the committee’s views on the matter.

Other areas with regard to motorhomes and wild camping are covered elsewhere in our overall tourism and visitor economy work, and in management of some of the challenges that have arisen. One challenge with motorhomes, for example, relates to administration, compliance and enforcement issues. How do we determine what is the chargeable event in such cases? The legislation contains quite a clear definition of the chargeable event with regard to overnight accommodation: if, for example, a motorhome went to a campsite that was subject to the visitor levy, that would be captured. Where that does not happen, the question is how we would administer the levy. We are not familiar with many—or, indeed, any—examples of a particular levy or charge on motorhomes. One example might be New Zealand, if I am correct, but in that case, there is a very defined geographical area with a single point of entry.

I am open to further discussions on the matter, but the issue raises challenges around administration, and we would have to find some way of being consistent with how the bill is drafted. As I have said, we have talked a lot about wanting to ensure that any system that we put in place is straightforward for business; we want to ensure the same thing for the tax authority, which would, in this case, be local government.

Ben, is there anything that you want to add about motorhomes and camper vans?

I have been grateful for the engagement of the sector. I particularly want to mention our parliamentary colleague Stuart McMillan, who convenes the cross-party group on recreational boating and marine tourism. I had a meeting with that group earlier in the autumn, and it raised a number of issues. I am again grateful to Mr McMillan, who is convening a round-table meeting with the sector on Friday, which I will attend for further discussion.

Clearly, concern was expressed that the legislation might unintentionally capture certain activity in a way that was not consistent with the policy intention. We are having close discussions to ensure that such issues are fully understood. If required, we will lodge amendments to clarify the position at stage 2.

I am familiar with the concerns that have been raised by the sector, and I recognise them. I am grateful for the sector’s considered engagement. We will take that matter forward on Friday this week to ensure fully that there is no unintentional capturing of particular activities in a way that would be inconsistent with the policy intent of the legislation.

We have sought, particularly through work on the extensive business and regulatory impact assessment, to detail our understanding of the various costs of compliance and administration. I will ask Alisdair Grahame to give a bit of background on how that work has been developed and what our current understanding is.

The Manchester scheme is distinct, as it is a business improvement district model rather than a local authority-administered visitor levy. There is consideration of a BID model in the BRIA. In partnership with local government and through engagement with business, we have sought to take a different approach in which the levy is administered by the local authority. With BIDs, there is a balloting process that can create uncertainty about the longer-term stability of revenues, whereas with a local government-administered scheme work will be on-going through the requirement to consult and there will be democratic accountability through elected members taking the decision locally.

Although there are various ways in which the BID model could be considered to meet the policy objectives, it was not deemed capable of doing so. Hence, we have taken forward the visitor levy approach for local authorities, as set out in the bill.

I am not aware of any tax operating within the UK where the costs of compliance can be reclaimed, but there would be nothing preventing a local authority, should it choose to do so as part of its way of operating the levy, from supporting businesses with or reimbursing them for the cost of compliance. However, that would be a matter for an individual local authority to determine.

Perhaps I can confirm this with Ben Haynes. Ben, are there any examples of such costs being reimbursed?

The revenue would be net of administration costs—it would be deployed to support the scheme’s objectives—but there is nothing to prevent a local authority from using a portion of the revenue generated from the scheme to support accommodation providers with their compliance costs. Again, though, that would be a matter for a local authority—it would be at their discretion. Local stakeholders might consider engaging with the local authority on this, but, as I have said, it is a matter for the local authority.