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Small businesses in the Highland and Islands are set to suffer following the Scottish Parliament’s passing of a short-term lets licensing order.

The impact of this will be hugely disproportionate to the problems that its claimed will be managed, Scottish Land & Estates said yesterday. (Wednesday January 19).

SLE has consistently raised strong concerns that the draft licensing order had been shaped with mainly urban businesses in mind.

The rural business group said the order failed to take into account the important role short-term lets play across rural Scotland by providing housing for communities and workers, as well as bringing in vital tourism.

Following thousands of consultation responses expressing concern at the proposed plans, the Scottish Government revised its draft order last autumn to make a number of changes including removing overprovision powers and reducing public liability insurance requirements.

Highlands and Islands MSP Donald Cameron says the regulations on short-term lets are a “severe blow to the hospitality sector” in his region.

Mr Cameron spoke after MSPs voted to introduce a new licencing scheme for short-term lets. The measure was opposed by Scottish Conservatives but supported by members of the SNP-Green Government

The Scottish Conservative MSP said:“Once again, no account is being made of the severe and disproportionate impact this measure will have on the Highlands and Islands.

“The result of this will be more bureaucracy for small businesses across my region, especially those involved in self-catering. After the last two years they have endured, some may just give up, with all the consequences that will have for jobs and livelihoods.

“It is particularly pernicious that SNP-Green ministers refused to engage with industry bodies such as the Association of Scotland’s Self-Caterers (ASSC), or made any effort to understand the impact their proposals could have.

“This will be a stark blow to the hospitality sector of the Highlands and Islands and underlines how remote SNP and Green politicians in Holyrood are from people in rural Scotland, given this policy is designed to suit urban areas in the Central Belt.”

And SLE insists there are a number of outstanding issues that the licensing order does not address including a one-size-fits-all approach that fails to reflect the diversity of rural businesses as well as being based on a flawed Business & Regulatory Impact Assessment (BRIA) that excludes previous Scottish Government work on the value of short-term lets in rural communities.

Further issues include no differentiation between well-managed and reputable businesses who already comply with existing health and safety legislation, and more casual, informal hosts, alongside potentially disproportionate license fees and threats that up to three-year licenses could be withdrawn in the future.

Scottish Land & Estates Policy Adviser, Simon Ovenden, said:“We’re extremely disappointed that these proposals have been passed by the Scottish Parliament, albeit with some welcome opposition that recognised the damage that this legislation will have on rural businesses. 

“While we understand the need for action in some localised situations, we have constantly warned of the dangers of a one-size-fits-all approach. This urban-focused licensing order being imposed on rural Scotland, with evidence suggesting that the excessive bureaucracy and spiraling costs could now lead to many businesses closing with a knock-on impact to the local communities they serve.

“This is particularly disappointing given the significant difficulty rural businesses have faced during the last two years.”

The original proposals were intended to curb the soaring growth in air b'n'bs with major accommodation providers fearful of unfair and unregulated competition and some areas of cities becoming no-go areas for ordinary letting as the rates per room soared by on-line marketing of short stays. But the impact of regulating almost every single accommodation provider provoked a backlash from smaller providers, with the major companies remaining largely silent as the dispute continued.  

Under the new rules local authorities will have to set up licensing schemes.

All short-term let properties will require a licence to ensure they are safe and the people providing them are suitable.

Local authorities will be required to establish a short-term lets licensing scheme by 1 October 2022, and existing hosts and operators will have until 1 April 2023 to apply for a licence.

Housing Secretary Shona Robison said:“This legislation is a significant milestone on our path to bringing in an effective system of regulating short-term lets.

“Our licensing scheme will allow local authorities and communities to take action to manage issues more effectively, without unduly curtailing the many benefits of short-term lets to hosts, visitors and the economy.

“We have already introduced legislation allowing councils to establish short-term let control areas and manage numbers of short-term lets. This is the next step to delivering a licensing scheme that will ensure short-term lets are safe and that allowing them to continue to make a positive impact on Scotland’s tourism industry and local economies while meeting the needs of local communities.

“This legislation covers the whole of Scotland, including island and rural communities, and offers flexibility to local authorities in how it is implemented based on local needs and concerns.

“We appreciate the input from tourism bodies, local government, community organisations, residents and others in reaching this point.”

(More detail about how the scheme is to work has been added to this post since it was first published.  Comments from Donald Cameron MSP have also been added)