Business / Port raises concerns over idea of cruise levy
LERWICK Port Authority (LPA) has raised “multiple concerns” to the Scottish Government about the idea of a cruise passenger levy.
The government recently consulted on the proposed tax, which could raise money for local authorities, but it has not been met well by ports which host cruise ships.
One of these is Lerwick, where this year more than 130 cruise calls are planned at the port.
LPA cruise and marketing manager Melanie Henderson said visiting cruise ships make a “significant contribution” to the Shetland tourism sector, increasing accessibility to the isles, creating opportunities for local businesses and supporting jobs.
“The supply chain to service cruise is now well established, but it depends on continuity to support local jobs and maintain those resources,” she said.
The Scottish Government’s consultation focuses on the benefits and problems a cruise ship levy could bring, as well as the practicalities of how it could work.
It comes in addition to the “tourist tax” which local authorities in Scotland can now apply to visitors, although Shetland Islands Council has yet to make a formal decision on whether to implement it.
Earlier this week Cruise Lines International Association (CLIA) published new research which showed the economic boost to Scotland from the cruise sector.
It said that in 2023 cruise tourism generated £343 million in total economic output in Scotland, delivering £145 million in wages to Scottish workers.
But the CLIA said a 20 per cent reduction in cruise tourism, “as has been seen elsewhere in Europe after the introduction of a cruise levy”, could lead to the loss of £58 million in economic output.
Henderson said where taxation has been introduced – in Iceland, for example – it has “significantly reduced the number of visits by cruise lines as they seek to balance the costs of visiting those regions”.
“We work with ports in Scotland to market the country as a cruising destination and having local taxation introduced in each region could seriously destabilise the resources we have built. It is an industry that is already seasonal and moveable,” she said.
“The benefits and complexity of collecting any levy must be weighed against the potential risk of significantly undoing years of relationship building with the cruise lines by the local supply chain and wider impacts any reduction in cruise tourism might have for the local economy.”
One of the questions the government consultation asked was on what basis a cruise ship levy should be charged, with ideas put forward including tonnage of the ship, passenger capacity and number of passengers to disembark.
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.
Councillors in Orkney were previously 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.
Commenting at the time on the publication of the consultation, 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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