Traditional B&Bs could shut up shop, say MSPs

Traditional bed and breakfasts may choose to go out of business rather than face the costs of a licensing scheme which is expected to be approved by the Scottish Parliament in the new year, MSPs have warned.

By Brian Wilson
Friday, 31st December 2021, 8:24 pm
Fergus Ewing was among the MSPs who were concerned
Fergus Ewing was among the MSPs who were concerned

The long-running consultation on legislation to control short-term lets reached its conclusion in a Holyrood committee last week with strong reservations expressed by several MSPs including the SNP’s Fergus Ewing.

He said: “The licensing scheme is too draconian and unfair and there is no set of rules. There will now be a period of division, difficulty and anxiety among tens of thousands of law-abiding small businesses that have done nothing to deserve the threat that is being held over them”.

Mr Ewing argued in favour of registration rather than licensing. He said: “If there is a system in which someone’s property can be taken away and their business terminated, there should surely be a very clear set of rules to govern in what circumstances that can happen.

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“If there is the possibility of a licence being withdrawn but the licensing system can take several years to operate, there will be a long period of uncertainty … What happens to bookings and cancellations during that period? What happens to the business if the licence is refused? None of that has been answered.”

The Conservative MSP, Murdo Fraser, challenged the inclusion of traditional B&B establishments. He asked why owner-run B&Bs were being caught by the regulations “which are seen simply as another form of taxation”.

Mr Fraser said: “The providers are struggling to see what benefit they will get out of the new regulations, and they will be hit by substantial annual costs in order to comply with them … some of them (will) decide to drop out of the industry altogether”.

The Cabinet Secretary, Shona Robinson, replied that B&Bs were included because otherwise other short-term let businesses might provide some nominal breakfast in order to “re-label” themselves to avoid licensing. “The re-labelling issue would have been a considerable concern if they had been excluded.”

Mr Fraser suggested that excluding B&Bs where the owners live on the premises “would seem to be an obvious cut-off point” but Ms Robinson rejected this distinction as being too difficult to legislate for and open to the same abuse.

MSPs also expressed concerns about the costs involved for small business owners. While the Scottish Government maintains these will be limited to hundreds of pounds, other estimates for licensing and compliance run into thousands.

The legislation will give local authorities powers to establish “control areas” for short-lets. Comhairle nan Eilean Siar has been supportive of this aspect of the legislation while the Western Isles Tourism Organisation has warned of damage to the industry without addressing housing shortage in areas like west Harris.

Ms Robinson told the committee: “We are committed to ensuring that local authorities have appropriate regulatory powers to balance the needs and concerns of their communities with the wider economic and tourism benefits of short-term lets.”

She added: “I know that short-term lets bring many benefits to hosts, visitors and the Scottish economy. They are an important source of flexible and responsive accommodation for tourists and workers. However, they have also caused issues for local communities that need to be addressed.”​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​