Potential local authority level Cruise Ship Levy in Scotland: partial business and regulatory impact assessment

Section 2: Engagement and information gathering

Engagement approach

Engagement

During the passage of the Visitor Levy (Scotland) Act 2024 the Scottish Government began to build connections with cruise ship industry stakeholders and maintained the existing links with local authority tourism and revenue officials. Since the passing of the Act officials have continued to develop those links.

In autumn 2024 officials arranged roundtable events and brought together attendees from cruise ship lines, port operators, local authorities, the tourism sector, and others with an interest in a potential cruise ship levy. There were four roundtable events in Scotland. These were held in different areas near to ports which are visited a significant number of cruise ships. The events were chaired by four Ministers, each with a portfolio relevant to a potential cruise ship levy -the Cabinet Secretary for Finance and Local Government; the Cabinet Secretary for Rural Affairs, Land Reform and Islands; the Minister for Business; and the Minister for Public Finance.

Key points that emerged from the roundtable events were:

• a concern that a cruise ship levy could have a deterrent effect on the number of port calls cruise ships make in Scotland. A variety of views were expressed on whether a deterrent effect would apply, and if so what the implications of it would be for local authorities and communities.
• the contribution that cruise ships make to the wider economy in the areas they visit, and to the wider Scottish economy. Businesses connected to the cruise ship sector, such as transport providers who carry passengers on shore excursions, and those who provide services for crew, were examples of the wider economic impact of cruise tourism.
• cruise ship operators, rather than individual passengers, would decide whether to visit a port that charged a cruise ship levy. The itineraries for cruise ships are set by the cruise ship operator, making a cruise ship levy different from a visitor levy. In the case of the visitor levy, it is generally individuals who decide, when they make the decision to book a stay, if they wish to book accommodation and pay a visitor levy.
• how funds raised by a cruise ship levy should be used. Some attendees would prefer there to be no restrictions on how such funding was used. Others were open to some restrictions meaning the funding had to be used for visitor economy related expenditure. Some attendees wanted any funds raised to only be used for infrastructure or services directly related to cruise ships and cruise ship passengers.
• clarity would be needed on the purpose of a cruise ship and what issue(s) it would be seeking to address. The Scottish Government should explore other means of addressing issues around the impact of cruise ship passengers on communities.

The formal public consultation, underway as this partial BRIA is published provides an opportunity for stakeholders to formally provide their views and have them recorded and analysed as part of the consultation process.

Information Gathering

Where full cruise schedules for 2024 were not readily available online, Scottish Government officials engaged directly with ports to source these. This allowed development of an evidence base for cruise ships calls to Scotland, the gross tonnage of those ships, and the number of passengers on board in 2024.

Scottish Government analysed the cruise schedules, matching the names of ships with information on passenger capacities and gross tonnage of ships where this was not already provided. This allowed an estimate of the number of cruise passengers visiting each Scottish port, with detail on the date, cruise line, and ship.

Research was conducted on international examples of where cruise operations face levies. This included analysing and bringing together evidence from both industry papers and Scottish and UK government documents. There was direct engagement with industry representatives, who highlighted research and evidence that could be useful for developing a proposal to consult on.

Scottish Government officials will be seeking further data from cruise ship operators, port operators, local authorities, and others. This will be data on cruise ships visiting Scotland, on cruise tourism more generally, and relevant to the impacts (both positive and negative) that cruise ships can have on local communities and the economy.

Internal SG engagement/ engagement with wider Public Sector

Internal SG engagement

A number of Directorates across the Scottish Government have fed into, and will continue to feed into, policy development work on a potential cruise ship levy. In particular there has been regular engagement with policy teams focussed on ports, tourism, island communities, and the Scottish Government approach to taxation. If it is decided to develop proposals more fully following the public consultation the Regulatory Review Group will be engaged, along with continuing to work relevant policy teams within the Scottish Government and broader public sector.

UK/ Devolved Administrations

Regular engagement has taken place with the UK Government Department for Transport (DfT). As policy work develops officials will continue to engage with DfT, and other relevant UK Government departments.

Wider Public Sector

There has also been engagement with staff from VisitScotland, Revenue Scotland, and Transport Scotland. COSLA officials have also been engaged along with members of the Institute for Revenues, Rating and Valuation. Local authority officials attended, and contributed to, the roundtable discussion events. Staff from trust ports and local authority-run ports attended the roundtable events and contributed their views. Scottish Government officials will continue to engage with the wider public sector as work on a potential cruise ship levy moves forward,.

International

Desk based research has, drawn on a range of international evidence when building the evidence base for how cruise levies in other parts of the world operate. This included commercial, government and academic sources.

Business / Third Sector engagement

Four roundtable events were held by Ministers to explore a potential cruise ship levy in Scotland, taking place in Orkney, Edinburgh, Inverclyde and Inverness. The purpose of the events was to provide a forum for open discussion on the issues surrounding a potential cruise ship levy. Several businesses and business representative organisations, participated in the round table events. One contributed further material related to the economic benefits of cruise calls. The points made in the roundtable discussions have informed the development of both the public consultation paper and this partial BRIA.

Feedback to date from businesses has included:

• concern about the administration and administrative burden of any cruise ship levy;
• highlighting the potential deterrent effect that a cruise ship levy could have in reducing the number of port calls made by cruise ships, both to the specific ports where such a levy is introduced, and to other ports and Scotland as a whole;
• highlighting the economic contribution that the cruise ship industry believes cruise ship makes to local visitor economy;
• concerns about the impact a cruise ship levy could have on business indirectly connected to the cruise industry, such as transportation providers and visitor attractions.

We will be following the requirements of the BRIA process as work on a potential cruise ship levy moves forward. This will include meeting relevant individual businesses involved with cruise tourism and wider business organisations. We will work with industry umbrella bodies to identify suitable businesses, of varying sizes, to engage with in this process.

Public consultation

The formal public consultation process runs from 27 February to 30 May 2025. It provides an opportunity for stakeholders and others with an interest to contribute their views. An analysis of the consultation responses will inform the next steps on a potential cruise ship levy and future iterations of the BRIA.