Scott Wright: High-profile row is major gamble for Yousaf

The Save Self Catering in Scotland campaign group has this week underlined the concerns it holds over a new licensing regime for short-term lets by protesting outside the Scottish Parliament at Holyrood.

The scheme, which is designed to address the unwelcome side effects of the rise of Airbnb-style properties over recent years, is due to go live on October 1. But the self-catering sector has declared a large number of operators have still to apply to their local council for a licence, highlighting the level of cost and complexity involved.

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It is also estimated that huge swathes of the sector have already decided to call it quits rather than go through the hassle of becoming licensed, which representatives say will deal a blow to the Scottish tourism industry.

The pressure to change the proposed rules, which for many months now has been led by the Association of Scotland’s Self-Caterers, has risen to a crescendo over recent weeks, amid claims that it is “demonising” many small business owners.

But despite the clamour to pause the scheme, which has already been delayed by six months, the Scottish Government is holding firm. It has stated that the owners of short-term lets have had plenty of time to prepare and that the introduction of licensing will safeguard the role that they play in the tourism industry.

Mr Yousaf has so far been assured in his dealings with the business community in Scotland, which in certain quarters had become disillusioned with the approach taken by his predecessor, Nicola Sturgeon.

He won plaudits for parking controversial proposals to heavily restrict alcohol advertising. And he secured breathing space when the flawed deposit return scheme was kicked into the long grass, after it became clear that the UK Government would block its introduction by refusing to grant an exemption to the Internal Market Act.

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Mr Yousaf also acted decisively with his pledge to offer a New Deal for Business shortly after taking office, which has broadly been welcomed by lobby groups.

The New Deal for Business Group will, among other things, strive to ensure that business will be involved at the earliest stages of policy development. This directly addressed a long-standing concern expressed by many in business that ministers had regularly failed to take into consideration the financial impact that proposed regulations would have on companies.

A series of sub-groups with members drawn from across business, politics and the wider economy was also set up, tasked with making recommendations on how the relationship between government and business could be improved in critical areas.

Announcing his administration’s Programme for Government on Tuesday, Mr Yousaf again confirmed his commitment to implementing the recommendations of the New Deal for Business Group, which brought a positive response from business representatives.

The First Minister would also have been encouraged by the reaction to a £15 million package to support entrepreneurs, start-ups, and scale-up businesses in Scotland, and a pledge to establish a small business unit.

Other business-focused commitments in the Programme for Government included a deal with the onshore wind industry to speed up the consenting process, and the development of a green industrial strategy to realise the economic opportunities offered by the energy transition.

There is also a proposal to significantly improve how the Government collects data about local businesses, which has been identified as a failing that came to light during Covid when attempts were made to provide support to those in need.

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On the face of it, it is hard to argue with the intent behind any of these proposals.

But despite this good work, there is every chance the reputation of Mr Yousaf as someone who understands the needs of business risks being undermined by the row over short-term lets.

Now, as Colin Borland, director of devolved nations at the Federation of Small Businesses in Scotland notes, the legislation which paved the way for local councils to run licensing schemes for short-term lets pre-dates Mr Yousaf’s elevation to First Minister.

Mr Borland explained that, had such legislation been proposed now, its impact would be assessed by the New Deal for Business Group, which would strive to come up with a solution that would be subject to a small business impact assessment and a cumulative impact assessment before being introduced.

“But that’s not where we are with this,” Mr Borland told The Herald. “We are now at the sharp end, with councils drawing up their own differing licensing schemes and implementation deadlines looming. So, the emphasis needs to be on addressing the immediate issues.

“There are, as is always the way with locally administered schemes, concerns around the range of fees being charged by some councils, as well as the additional requirements being put in place by others.

“That is why we have been making representations to the Housing Minister, asking for his support in encouraging local authorities to take a pragmatic and proportionate approach to implementation of their schemes. And, as ever with new regulations, we are pressing for a focus on supporting compliance in the early stages – and certainly until any backlog is cleared.”

Given that it is less than a month now until the new licensing regime for short-term lets becomes law, these suggestions seem eminently sensible.

We do not have long to wait before finding out whether everything will go smoothly, as the Scottish Government seems to be suggesting, or whether the scheme is destined to be the disaster that the industry fears it will become.

Mr Yousaf is clearly counting on the former, but it is a gamble that is not without risk.