We are at the height of the summer tourist season, and with the Festival due to start at the end of next week, Edinburgh is already extremely busy. Tourism is the single most important economic sector we have here in Scotland, but one whose importance is all too often overlooked by those in power. Made up, as it is, of tens of thousands of private businesses, many of them small or even micro, its interests are regularly neglected by government.

Right now there are widespread concerns in the industry about a range of issues – the threat of additional taxation, increasing costs, labour shortages, and problems with infrastructure. But there is no issue causing greater concern than the regulation of short-term lets by the Scottish Government, due to be implemented from October 1 this year.

One small anecdote highlights the unintended consequences of the legislation pushed through Holyrood by the SNP-Green government. Recently I spoke to Susan (not her real name) who owns a property in Leith. Susan has a spare bedroom which over many recent summers she has let out on an Airbnb basis for the summer months to provide accommodation for one of Edinburgh’s many visitors.

It has been a real win-win situation. A visitor has access to good-quality, low-cost accommodation, Susan enjoys welcoming and engaging with new people from all parts of the world, and she gets some very valuable additional income.

But all this has stopped. Because this year, Susan is no longer letting her spare room. The costs and bureaucracy involved in applying for a short-term let licence simply don’t make it worth her while doing so. So she loses income, and someone coming to visit Edinburgh, perhaps a visitor to the Festival or a Fringe performer, misses out on a place to stay.

This pattern is being repeated right across Scotland. A survey carried out by the Association of Scotland’s Self-Caterers (ASSC) of small accommodation providers revealed that 61 per cent of more than 1,200 who responded were planning on giving up within the next year.

The legislation doesn’t just affect self-catering properties. It also catches guesthouse and B&B owners, who, according to the Scottish Guesthouse and B&B Alliance, are currently finding it impossible to sell businesses because potential buyers seeking mortgages cannot complete a purchase without having a licence in place.

And there are substantial delays in licences being granted. Recent figures from Highland Council show that just over 2,000 of the estimated 10,000 operators in the region have applied and only 1,000 licences have so far been issued. It’s a horrible situation for all involved.

The licensing scheme was introduced with the intention of addressing the “party flats” problem which exists in the centre of cities such as Edinburgh. But rather than bring in a narrow, targeted scheme to address this issue, instead we have a Scotland-wide, expensive and overly bureaucratic set of regulations, which are having a devastating impact on the tourism sector. It was the classic ‘sledgehammer to crack a nut’, and the consequences are severe.

Fiona Campbell, chief executive of the ASSC, highlights an estimate by economic consultants Biggar that the policy will cost £133 million and 7,000 jobs, but now believes that this will be a substantial underestimate given the anecdotal evidence of the large number of providers simply giving up their businesses.

There are already signs of an unintended consequence of the legislation, in that owners of second homes in many remote and rural parts of Scotland, who previously would let them as self-catering premises when they were not using them, will in future simply leave them lying vacant because of the expense and hassle of complying with the licensing scheme. We are already seeing properties which were previously let as self-catering units being sold, and bought up as second homes, with the consequential negative impact on local economies due to reduction in the number of visitors.

On July 11, the ASSC set out to the Scottish Government some 14 proposals of practical steps that could be taken to amend the regulations to deal with some of the most negative consequences of what has been introduced. This would leave the licence scheme in place, but resolve some of the most challenging aspects of it. Last week, in a response from the relevant minister, Paul McLennan MSP, every single one of those practical suggestions for improvement was rejected. The Scottish Government, it seems, simply doesn’t care.

The irony here is that Humza Yousaf’s new government has been desperately trying to reset its relationship with the business community in Scotland, recognising that Nicola Sturgeon’s previous regime was seen as being out of touch. The creation of the New Deal for Business Group was intended to send a signal that the SNP-Green government was turning a corner and was in future prepared to engage meaningfully with the business community and actually listen to their concerns.

For many in business, the response to their concerns about the over-regulation of short-term lets will be the first test of how serious the Scottish Government is about taking a new approach to business, and actually putting the interests of the Scottish economy first.

There will be very many across Scotland looking closely to see whether Paul McLennan’s head-in-the-sand approach will be endorsed by his bosses in the Scottish Cabinet, or whether they are actually genuine when they say that they are listening to business. And there will be those like Susan who will be desperately hoping that, in future years, it will once again be worth their while to open their spare room to Edinburgh visitors.

Murdo Fraser is a Scottish Conservative MSP for Mid-Scotland and Fife

SNP-Green government has created a short-term let crisis that is damaging Scottish tourism – Murdo Fraser

Comments