Council / Cruise levy consultation welcomed amid ‘many unanswered questions’
THE SCOTTISH Government has begun seeking views on giving councils the power to introduce a tax on visiting cruise ships.
The government is seeking views on the practicalities of such a levy, as well as the potential market implications and effect on local economies and communities.
It has a particular interest in Shetland, given that Lerwick hosts more than 100 cruise visits a year.
Shetland Islands Council (SIC) leader Emma Macdonald said the consultation is a good opportunity for folk to give feedback on the cruise industry.
But she said there are “still many unanswered questions”.
Last year the Scottish Parliament passed legislation which gives local authorities the power to introduce a visitor levy on overnight accommodation in their area.
Calls were made for a similar power to be given to local authorities in relation to cruise ship passengers.
The Scottish Government said it has committed to exploring such a levy, with “roundtable” events already held to hear the views of the industry, local government and other organisations.
The government said there were around 1,000 cruise ship visits to Scottish ports in 2024, bringing 1.2 million passengers – an increase of almost 400,000 per year compared with 2019.
Locally there were more than 130 cruise vessel arrivals in Lerwick last year, carrying over 130,000 passengers.
There are 144 visits planned for 2025, according to Lerwick Port Authority.
Councillors in Orkney were recently told that a £5 levy on cruise ship passengers arriving there could raise in excess of £1 million a year. More than 210,000 cruise passengers visited Orkney last year.
The consultation suggests possible ways the levy could be calculated, from basing it on the gross tonnage of a vessel to the number of passengers that disembark at a port.
The government said it has considered that it would usually not be possible to apply a levy directly to an activity that takes place beyond the foreshore – such as to a cruise ship dropping anchor off the coast of a local authority.
The government said it is also interested in views on whether a levy should be linked to the environmental impact of cruise ships.
The consultation raises questions over how money from a levy should be spent, although it is expected that the income would be retained by the local authority.
There are mixed views in the Shetland community over the cruise ship sector, with economic and tourism benefits but some concerns over passenger numbers and the environment.
Macdonald said: “We know that here in Shetland they [cruise ships] contribute significantly to our economy, and there are many businesses that wouldn’t survive the winter without the boost that cruise ship visitors bring.
“Cruise ship traffic is also incredibly important to the Lerwick Port Authority, and they then invest that money back into other infrastructure, which benefits other industries.
“There are other concerns around the impact that cruise ship passengers bring, so it will be a good opportunity for people to give feedback and express their views.”
The SIC leader noted that it is in the very early stages of consultation, and it remains unclear what the outcome will be.
“I don’t think it’s even very clear what the potential levy could be used for, if it is even viable,” she added.
“For me, there are still many unanswered questions within what is being proposed to be able to answer it clearly but it’s definitely something that will be worth keeping a close eye on and engaging with our stakeholders within the Lerwick Port Authority.”
Shetland MSP Beatrice Wishart said Shetland has “embraced the cruise ship sector and the boost in trade to local businesses is welcome”.
“It cannot be ignored though that there can be impacts from cruise ship tourism, on council services for example, and capturing additional revenue could help to balance the additional strain,” she added.
“There is what appears to be an unfairness within the visitor levy legislation that people who choose to spend more than just a few hours in Shetland, staying in overnight accommodation and contributing to local businesses, should shoulder all of the visitor levy.”
Lerwick Port Authority chief executive Calum Grains previously warned that an additional tax could have significant impacts on the competitiveness of Shetland as a destination and how Scotland is perceived more widely within the cruise industry.
“If a levy is brought in, a clear reinvestment strategy must exist for any proceeds directly benefitting the tourist industry and we welcome any continued consultation with the Scottish Government to develop efficient and competitive proposals that do not disproportionately affect island communities,” he said last year.
Commenting on the publication of the consultation on Thursday, finance secretary Shona Robison said: “The tourism sector is a crucially important part of the Scottish economy and cruise visits are increasing.
“The consultation will help to inform the Scottish Government’s decision over whether or not to bring forward legislation and it is really important that we hear from a wide variety of voices on this matter.
“Last year, we held events to hear the views of the cruise ship industry, local government, and others.
“We want to continue the helpful dialogue which started at those events, and explore further what a cruise ship levy could mean in a Scottish context.”
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