To ask the Scottish Government, regarding any implications for its budget and public sector finances, what assessment the finance secretary has made of how much revenue the visitor levy could generate for local authorities. (S6O-03560)

As a visitor levy is a local tax, the level of revenue that it raises will depend, first, on whether a local authority decides to introduce a visitor levy and, secondly, on what percentage rate the local authority sets.

In the business and regulatory impact assessment that accompanied the Visitor Levy (Scotland) Bill, the Scottish Government analysed a range of visitor levy percentage rates and what would be raised with them. As just one example, analysis indicates that if every local authority in Scotland were to introduce a visitor levy at 2 per cent, that would raise around £33.7 million.

Some local authorities have, justifiably, chosen not to implement a visitor levy, due to the administrative costs that they would incur versus the income that they would generate. Can the cabinet secretary confirm whether the Scottish Government has considered what would be the likely impact on a local council’s future funding settlement if it chose not to implement the visitor levy, in order to protect its financial situation?

As I said at the start of my answer, as it is a local tax, the level of revenue from the levy will depend, first, on whether a local authority decides to introduce a visitor levy. There is no requirement on local authorities to do so. The bill is about our empowerment of local government with a range of fiscal levers, which I would have thought Rachael Hamilton would welcome.

If a local authority decides that it wishes to proceed with a levy, it is for that authority to decide the rate, and it has to carry out the assessment and consultation with local businesses and other stakeholders before proceeding, as is set out in the bill. Any revenue that is raised by the council through the levy will not impact on any of the local government funding that it otherwise receives—it will be additional revenue. I would have thought that Rachael Hamilton would welcome that, too.