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

Section 4: Additional implementation considerations

Enforcement/ compliance

The public consultation is seeking views on the compliance and enforcement powers that may be necessary in relation to a cruise ship levy. These include questions on whether or local authority (or other relevant body) should have powers related to requesting information and applying a penalty (e.g. a fine) in certain circumstances. The Scottish Government will carefully consider the views expressed in the responses to these questions and will continue to explore what would be an appropriate compliance and enforcement regime should a cruise ship levy be introduced.

There are a number of requirements that already apply to commercial ships on international voyages. For example, such ships are required to provide to port authorities a standardised set of information, as defined in the Facilitation Convention (FAL) by the International Maritime Organisation (IMO), an agency of the United Nations (IMO, n.d.).

The UK Border Force will also request information from cruise ships about their crew and passengers when departing from or arriving in the UK through the National Maritime Single Window (NMSW) (Home Office, n.d.). This information includes:

• A General Declaration (FAL 1) form, which includes information about the ship and its voyage, including its gross tonnage and the number of passengers and crew.
• A crew list (FAL 5) form, which includes details of each crew member, such as nationality and dates of birth.
• A passenger list (FAL 6) form, which includes details of all passengers, including dates of birth, port of embarkation and disembarkation, and whether they are a transit passenger.

There is also a requirement for all ships of 300 gross tonnage and above to provide information to port authorities using the Consolidated European Reporting System (CERS). If CERS reporting has been completed, some reporting requirements through the NMSW may be deemed complete. Reporting may be fulfilled by Masters or shipping agents and has the purpose of providing mandatory port call, dangerous and polluting goods information, waste information and security information to the UK Maritime and Coastguard Agency (MCA) (MCA, 2017).

The CERS form is focussed on gathering information on environmental risks. For example, this will include waste, hazardous materials and fuel. However it also includes vessel and voyage information, including the vessel’s gross tonnage, recent port calls, purpose of voyage, type of vessel, registration details, and whether cargo and crew lists have been submitted (including FAL 5 and FAL 6).

Given the above, it is understood that cruise ships calling at ports in Scotland will already hold information on board about the number of passengers and certain details about them, such as their ports of embarkation/disembarkation and their age, as well as key information about the vessel, including its gross tonnage. They will also already be submitting this information in advance of arrival to the relevant port authority, either through their shipping agent or the ship’s own Master through the CERS system, given that all cruise ships identified as calling in Scottish ports in 2024 exceeded 300 gross tons.

For any aspect of a cruise ship levy that was based on carbon performance, a potential consideration might be the ship’s Carbon Intensity Score (CII) grade. Evidence of this grade is required to be kept on board for inspection when requested, as part of the Ship Energy Efficiency Management Plan (SEEMP). The SEEMP is required to be kept on board for international shipping. However, it may not be routinely carried by domestic ships, i.e. those that only operate between UK ports. The SEEMP is not routinely submitted but can be requested by coastguard or a harbourmaster. The calculation of the CII may be changed in future by the International Maritime Organisation, so the way it is used for a potential levy would also be subject to future review.

United Kingdom (UK), European Union (EU) and International Regulatory Alignment and Obligations

Internal Market/ Intra-UK Trade

Policy work is not yet at a point where a definitive view can be taken on internal market aspects, and officials will continue working on these areas as policy work is developed. No internal market issues have been identified to date.

International Trade Implications

The cruise tourism sector is a customer for services exports, through both port and shipping services to foreign ship operators and through tourism service exports to foreign resident passengers when they are ashore. A potential reduction in cruise visits from international operators would impact both of these aspects. A reduction in visits from UK operators carrying some foreign resident passengers would only affect tourism exports.

The main countries where cruise ship operators calling in Scotland are based are the USA, Germany and Italy, and the main source of foreign resident passengers is the USA and Germany. The USA and Germany would therefore be the main international trade relationships that could be affected by any cruise ship levy.

International visitor spend in Scotland in 2023 was estimated at £3.6bn, and domestic overnight visitor spend was estimated at £3.2bn, giving a total spend in 2023 on overnight tourism in Scotland of £6.8bn. The combined spend of passengers and crew was estimated earlier in this partial BRIA at £102m, or approximately 1.5% of this total.

The ONS classifies economic activity using Standard Industrial Classification codes. Port and shipping services exports resulting from cruise tourism are likely to be captured under some of the classes in SIC code division 52 (support activities for transportation). The Scottish Government currently publish export statistics for activities classified under Section H (Transportation and Storage) which includes divisions 49 to 53. Even if data was available at the most detailed level of SIC classification, it is likely that it would not be possible to quantify the share of port and shipping service exports occurring due to cruise tourism.

The latest export statistics show that in 2019, before the effects of COVID, exports from the transportation and storage sector were £1.4 billion (Scottish Government, 2023). They fell to £0.9 billion in 2021 during the COVID pandemic, however, the value of transportation and storage exports, and passenger numbers, is likely to have recovered since then.

We identified earlier in this paper that each cruise call may come with charges in the region of £40,000 to £100,000, depending on the port and the size of the vessel. With approximately 750 non-UK owned cruise port calls in Scotland in 2024, this gives a potential range of £30m-£75m for the scale of services exports to foreign owned cruise ships from Scottish ports in 2024.

We would welcome evidence on the value of port services exports generated by Scottish ports.

EU Alignment consideration

Policy work is not yet at a point where a definitive view can be taken on EU alignment aspects. Officials will continue working on these areas as policy work is developed. However, no EU alignment issues have been identified to date and levies on cruise tourism are in place in several EU member states.

Legal Aid

No potential impacts on legal aid or on fulfilling individuals' right to access to justice have been identified.

Digital impact

Any cruise ship levy would be implemented locally by councils, so the digital considerations would form part of local decisions on whether and how to implement.

Business forms

A cruise ship levy would be implemented locally by councils, so the process and potential forms required would be considered as part of local decisions on whether and how to implement.