Cruise ship levy: consultation

1. Introduction

The creation of a cruise ship levy for Scotland was first raised during work to explore levies for tourists. The possibility of applying a levy to cruise ships therefore featured in the public consultation on visitor levies that was held in 2019. At that time the Scottish Government decided to focus on a visitor levy that applied only to overnight accommodation, in light of consultation responses and given the complexity that would have arisen with trying to create one levy that applied to both overnight accommodation and cruise ships passengers. During the passage of the now Visitor Levy (Scotland) Act 2024, which gave local authorities the power to introduce a visitor levy on stays in overnight accommodation, the issue of a potential cruise ship levy was raised again by members of the Scottish Parliament, local authorities, and others. In response the Scottish Government indicated it was open to exploring a potential cruise ship levy in the future.

With the successful passage of the Visitor Levy (Scotland) Act in summer 2024 the Government began to take forward work to explore a cruise ship levy in more detail. This was reflected in the Scottish Government’s Programme for Government 2024‑25, which committed the Government to intensifying work on a potential cruise ship levy and undertaking a public consultation on the matter.

1.1 Roundtable events

Following the announcement in the Programme for Government the Scottish Government, with input from industry bodies and COSLA, arranged four roundtable events on a potential cruise ship levy. The purpose of these events was to bring together representatives of cruise ship operators, ports, local authorities, tourism organisations, and other bodies, to explore the merits and issues around a potential cruise ship levy. The events were chaired by a range of Ministers whose portfolios were relevant, including the Cabinet Secretary for Finance and Local Government and the Cabinet Secretary for Rural Affairs, Land Reform and Islands.

The events took place in Greenock, Inverness, Kirkwall, and Edinburgh, near parts of the country that receive a considerable number of cruise ships and cruise ship passengers. The discussions were wide ranging, but some common themes emerged at all the events. These included:

• the need to be clear on the purpose and rationale of any cruise ship levy;
• noting the potential deterrent effect a cruise ship levy could have on port calls by cruise ships;
• how any funding raised by a cruise ship levy should be used, and what restrictions (if any) should be placed on how a local authority could use such funds;
• noting the benefits and pressures that cruise ship passengers brought to the areas they visited.

The roundtable events were well attended, and were a useful opportunity to explore some of the issues around a potential cruise ship levy.

1.2 This consultation

This public consultation process is the next part of the Government’s work on considering a cruise ship levy. It seeks views on the benefits and problems a cruise ship levy could bring, the potential impacts (both positive and negative), and practical questions about how any such levy could best work. The public consultation on the visitor levy in 2019 asked a question about applying a levy to cruise ships. This elicited a variety of views, with some groups supporting such a levy, whilst business organisations and port operators were opposed. Local authority respondents to that consultation were fairly evenly divided.

This consultation paper recognises the responses on that question in the earlier consultation, and explores the issues in greater depth. It also reflects that over 5 years have passed since the visitor levy consultation took place, the context is different (such as the increase in the number of cruise ship calls in Scotland), and views may have changed. In line with the principles of New Deal for Business the Scottish Government is seeking input from a range of businesses of different sizes and across sectors as policy is developed. This will help with understanding any direct and indirect impacts of a levy, positive, negative, intended, and unintended.

The Scottish Government has not made a final decision on whether or not to give local authorities the power to introduce a cruise ship levy in their areas. This consultation paper discusses and seeks views on a number of practical questions about how any cruise ship levy in Scotland would best work. That is because such questions about the practical working of such a levy are a necessary part of considering such a levy. We are aware that a cruise ship levy in Scotland would be first such levy in the United Kingdom, and we will need to carefully consider market implications and the effect on local economies and communities of such a levy.

Throughout this document we have used the term ‘cruise ship levy’ to refer to a potential levy to be applied in relation to cruise ships visiting ports where there is the opportunity for passengers to disembark. One of the consultation questions asks for views on what name should be used for such a levy.

As part of work on a potential cruise ship levy the Scottish Government is carrying out research on cruise ship levies in other parts of the world. That work is ongoing and will result in a published paper in the future. However, Annex A of this consultation paper sets out the interim findings of research on cruise ship tourism and cruise levies in four jurisdictions: Amsterdam, Barcelona, Dubrovnik, and Venice. This paper also refers to the partial Business and Regulatory Impact Assessment (BRIA) carried out on a potential cruise ship levy. This has been published alongside this consultation paper, and is available on the Scottish Government website.