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On your first point about the ability to refuse a licence, you are right in one sense; the vast majority of people in the sector are law abiding and good providers. I absolutely agree that they provide a very important element of the tourism economy.

Is it not right, however, that people who do not abide by the law and are not providing safe spaces where people can stay should be refused a licence? Why should they be able to operate when another person down the road is doing everything that they can do to ensure that their short-term-let property is a safe place? Why should the person who is not doing that not face consequences?

The ability to refuse a licence is important; that is an important difference between the licensing scheme and a registration scheme. In many ways, Fergus Ewing has made the point for me—it is the whole point—that when someone does not comply it is unfair and there is no level playing field, so they should have a licence refused. However, people who abide by the rules have nothing to fear from the licensing system.

As Fergus Ewing will know, “Practical Fire Safety Guidance for Existing Premises with Sleeping Accommodation” was published in June 2018. Part 3 of the Fire (Scotland) Act 2005 and the Fire Safety (Scotland) Regulations 2006 set out fire safety duties in respect of the majority of non-domestic premises in Scotland. Obviously, not all short-term lets are businesses, so it is important that we have a mandatory licence condition that gives protection to people who use any type of short-term let. The licensing order puts in place some basic requirements for safety measures for all short-term lets. Andrew Mott or Rachel Nicholson might want to come in on that. Perhaps Rachel will offer the legal point of view.

I do not think that that will be the case. Over the past few months, with the level of staycations that there has been, the self-catering sector has been quite buoyant. We will keep an eye on that, as we are in a tricky situation at the moment. However, given the guidance that I talked about earlier and given the way in which the scheme would work in practice, the sector really does not have anything to be concerned about. With regard to the concerns that people will leave the sector en masse, I do not believe that that would happen.

It is also important to note that we have made considerable changes to the proposals to respond to concerns from the sector. For example, we have removed the minimum energy performance certificate requirements and the overprovision measures, and we have simplified many of the aspects that the sector raised concerns about. We have listened and tried to make the scheme as straightforward as possible. Once it is in operation, I think that operators and hosts will realise that, actually, any issues that they were concerned about have not come to pass.

I think that the point that Miles Briggs is getting at is about facilitating home sharing and bed and breakfasts. We want to facilitate responsible home sharing, and licensing authorities will have wide discretion to grant temporary exemptions or temporary licences under the Civic Government (Scotland) Act 1982 and the licensing order. We will develop guidance on granting temporary exemptions and temporary licensing with licensing authorities. That will cover things such as short-term temporary periods of letting during the festival and so on.

Andrew Mott might want to say a little more about those short periods of letting.

I do not accept that the scheme is draconian, irrational or arbitrary. It is proportionate, and the guidance will require local authorities to act proportionately. As a former minister, Fergus Ewing will know that when the Government brings in change, there is often opposition to it, and that concerns about impacts do not always equate to the reality.

I have tried to set out that reality today. The regulations are not intended to pose a threat to businesses other than those that operate outwith the law and do not operate safe premises. I have set out that we want to ensure that the costs are kept proportionate to the size of the business.

Fergus Ewing mentioned the Highland Council; it was supportive of the measures when it responded to the consultation. I cannot speak for it with regard to the vote that it then took, but its response to the consultation was supportive, so that is something for the Highland Council to deal with.

I recognise that stakeholders left the working group. They perhaps felt, at that point, that they did not support a licensing scheme. That was their direction of travel and their decision.

However, I have had productive discussions with the key organisations to which Fergus Ewing referred. No meeting of minds will take place on the issue of a licensing scheme, but most organisations have said that they want to get back in a working-group environment to talk about implementation of the detail, which is a responsible attitude to take. I look forward to working with them to discuss the detail, and the issues that Fergus has raised, and to ensuring that the guidance is clear. Local authorities do not want to make a disproportionate response either, so let us ensure that the guidance is strong in order to give further assurance to the sector.

We have talked about a registration scheme versus a licensing scheme. I come back to the fundamental point that in circumstances in which an operator is potentially putting people at risk—because a business is not operating as they should, or criminality is happening, or antisocial behaviour that makes the lives of people around the place a misery—a local authority would surely be correct to consider refusal or removal of a licence.

Such circumstances would arise in a very small number of cases. We are not talking about the law-abiding good providers, who will go about their business with the licensing scheme in place as they did prior to that, and whom we will continue to support because we know that they are an important part of the Scottish economy. I will continue to reassure the sector that it has nothing to fear from the licensing scheme.

I will begin with the issue of local authority resources. A total of 23 local authorities responded to our consultation in 2020. Only three of those responses expressed the opinion that the Scottish Government should provide any grant or loan funding to support the establishment of the licensing scheme. Eleven local authorities responded to the 2021 consultation. Two of those authorities highlighted concerns about resourcing.

Outside of the consultations, no formal requests for additional funding have been received so far. We have engaged extensively with local authorities and other stakeholders to finalise the legislation, which we think is efficient and effective.

You asked about fee calculation. An updated BRIA was published on 23 November. That was informed by consultation responses and other information that was provided to us, including concerns raised by stakeholders. As part of the process of updating the BRIA, Scottish Government officials and economists worked through all the information that was made available to us by stakeholders.

We engaged with Airbnb, the ASSC, the Scottish Bed and Breakfast Association and local authorities in particular about their concerns on the level of fees and the impact on the tourism sector. That all informed the final version of the BRIA.

The costs that are set out in our BRIA reflect the Scottish Government’s best estimates of average costs and fees across Scotland and a range of scenarios. The actual fees to be charged will, of course, be determined by local authorities following Scottish Government guidance. The average cost will depend on local conditions. The assumptions in our fee model have been informed by discussions with local authority licensing officials.

The guidance will say that fees should only recover costs, so local authorities should not go beyond that. It will also set out that there should be a proportionate, risk-based inspection regime. That is where there has been some disagreement. There have been worries that every property will be inspected numerous times in the course of the licensing scheme but we have said that inspection should be proportionate and risk based. That could be based on a number of factors but, in itself, it should keep the costs down because the inspection level would drive any fee costs.

I hope that that reassures the sector. The guidance will set out very clearly the level of inspection that we will expect local authorities to carry out. It should be risk based and not onerous.

We have not decided on the format per se, but I would want it to be open and to take contributions from stakeholders, local residents, communities and local authorities—the same groups that have been involved in the three consultations so far. We would revisit those stakeholders and find out how the scheme is working for them as providers and hosts, and for the users of short-term lets and those who are impacted by those lets. We want to look at that in the round and be open in doing so.

No, there will not be a cap. It will be down to the local authorities to decide that, as they know their areas better than we do. For example, the City of Edinburgh Council will know the requirements during the festival period, and it will be for it to decide the appropriate response, which I am sure that it will do in a sensible way. The council wants to ensure that there is enough accommodation for people coming to the festival and the fringe, so I am sure that it will operate the system in a way that enables demand to be met.

I am happy to engage with the committee on that. We could follow up nearer the time with some thoughts about how that might work. We want to be open and transparent about that process. We would welcome the committee’s involvement in that.

We considered registration as part of the 2019 consultation, and we have also considered the proposals that the Association of Scotland’s Self Caterers made earlier this year for registered accommodations to be exempt from the licensing scheme. We do not believe that registration offers the same protections as licensing does to guests, neighbours and local communities. To be robust and effective, a registration scheme would need to involve many of the same requirements as the licensing scheme. We understand that the policy intention of those proposals for registration would be to ensure compliance with broadly the same mandatory conditions as are set out in the licensing scheme. However, we did not see a draft registration scheme, and it is not clear how such a scheme would be enforced.

My main point is that I do not think that registration would include any provision for a fit and proper person test, or additional conditions to be attached to the registration. Those are important components of the licensing scheme, which a parallel registration scheme would potentially undermine. That fit and proper person test is important, not least from the point of view of safety. The committee heard concerns from Police Scotland about possible criminal activity.

The alternative was given full consideration, but we believe that the licensing scheme as proposed is proportionate—not onerous—and provides a level of protection for those who use short-term lets.

The licensing scheme seeks to ensure that every short-term let across Scotland meets basic safety standards. Those should be the same whether the let is in Edinburgh or the rural Highlands. That is important for urban and rural areas, and for businesses large and small. There needs to be a level playing field.

During the consultation and in on-going correspondence we have heard from residents in many places across Scotland including Glasgow, Ayr, Applecross in the Highlands, Loch Lomond and the Trossachs national park, the Isle of Harris, North Berwick, St Andrews and West Linton, among others. They have highlighted a range of concerns about short-term lets including the impact on local housing supply, noise and antisocial behaviours. Those are not just urban issues.

Delivering national consistency on safety standards is also important, and allowing and enabling local authorities to use additional powers beyond the core elements as they see fit to meet the needs of local communities. As I said earlier, we have committed to working with local authorities to review the levels of short-term let activity in the hotspot areas in the summer of 2023 to see whether any further measures are required.

Control areas came into place in April, and the City of Edinburgh Council has consulted widely on that. If it wants to move forward, it would need ministerial approval to make the whole of Edinburgh a control area. Highland Council has moved forward with just Badenoch and Strathspey, which it sees as an area of particular concern. Local authorities can use the powers if they want to and see that as a proportionate response to local issues, but they are not required to use them. I think that that is the right balance. It gives local authorities the ability to use the powers, if they so wish, and the control areas require ministerial approval.