NICOLA Sturgeon has indicated that she is open to discussions about supporting plans to allow local authorities to introduce a tourism tax to raise extra money for public services.

The First Minister said she would be listening to both sides of the debate over the coming months as the Scottish Government prepared its budget plans.

Her comments were made in response to a question from Scottish Labour leader Richard Leonard who pressed her on whether she would back Edinburgh city council’s plans for a £2-a-night tourist tax.

Adam McVey, leader of the SNP-run council, spoke earlier this month to a Holyrood committee following evidence presented to it from the council which said the levy could raise between £5 million and £29m a year depending on the size of the tax.

During First Minister’s Questions yesterday Leonard said McVey told MSPs the council spends more than £1m extra during festival season to keep the city clean due to the influx of tourists.

He said: “Does the First Minister seriously believe that increasing the cost of a hotel room by a couple of pounds a night is too high a price to pay for better funded local services?”

The First Minister replied: “Mr McVey has a very strong view on the introduction of a tourist tax, that view is shared by many in different parts of the country.

“It’s not currently Scottish Government policy to have a tourist tax, but of course we will continue to have that discussion.

“We will continue to consider these matters as we approach our budget this year.”

She said the Government would consider the views of those in favour of the tax as well as criticism from parts of the tourism industry before making a decision.

The exchange followed an update from McVey this week saying a tourism tax could raise £11m a year to the capital with a levy set at £2 per room per night. Over the summer Culture and Tourism Secretary Fiona Hyslop opposed McVey’s plans. She repeated her view on Wednesday that the government did not support the policy.

The proposal from Edinburgh city council has been criticised by the Scottish Tourism Alliance (STA), which said little has been done to seek feedback from those in the industry.

Edinburgh councillors will vote on Tuesday on whether or not to move forward with the plan and launch a public consultation.

Council leader Adam McVey said on Wednesday: “These draft proposals will form the basis for wider public consultation with all of our stakeholders and, importantly, with the residents of this city.

“It is another important step in our engagement strategy and on our journey towards securing a TVL for Edinburgh. Our work...has focused on key stakeholders, particularly those in the hospitality trade, and we are continuing to engage with them on the details of what an Edinburgh scheme could reasonably look like and options for implementing it.”

The levy would be chargeable all year round on all forms of accommodation – including short-term lets – but capped at seven nights. It could see Edinburgh become the first place in the UK to introduce the levy, following in the footsteps of cities such as Paris and Barcelona.