MSPs have backed pressing ahead with a controversial new licensing regime for short-term lets despite warnings it could decimate the sector.

Former SNP cabinet secretary Fergus Ewing voted with the Tories against the Scottish Government after a heated debate at Holyrood. 

The Inverness MSP already faces suspension from the SNP for voting with the Tories in June to call for the sacking of Green minister Lorna Slater.  

His latest rebellion, which failed to prevent the Government comfortably winning two votes, makes disciplinary action more likely.

He is currently away from Holyrood after contracting Covid and did not speak in the debate. 

The Scottish Government intends to bring in the new licensing system for Airbnb-style properties, B&Bs, guest houses and house swaps from October 1. 

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The aim is to regulate them in the same way as hotels and caravan parks, with hosts facing a £2500 fine if they continue operating without registering.

Some owners have warned the change is such a burden they will close their business.

Although the change has already been delayed six months to let owners prepare, the Tories forced a vote on whether to pause its introduction for another year.

SNP housing minister Paul McLennan said he would not consider a further delay, and said operators should not face large costs if their businesses already complied with the safety aspects of the scheme.

Proposing the motion to delay, Tory MSP Murdo Fraser said the sector faced an “existential threat due to the botched introduction” of the licensing scheme.

He urged ministers to use “common sense” and avoid “the shedding of thousands of jobs”.

He said the regulations should be enforced to protect residents from “party flats”, which have become a blight in central Edinburgh, without impacting traditional B&B properties.

The Herald:

He said: “There was never any need for a one-size-fits-all approach to this legislation. 

“It would have been perfectly possible for the Scottish Government to devolve to local councils the right to draw rules for their own areas.

“We would call on the Scottish Government to think again. 

“This is a government that claims it wants to reset its relationship with Scottish business. 

“ Today is the first taste of whether that approach amounts to anything more than empty words.”

Labour proposed excluding accommodation owners use as their main home, B&Bs and room lets.

Labour MSP Daniel Johnson accused the Government of “washing its hands” of the consequences licensing would have on these businesses.

He said: “You cannot treat all businesses as though they are large, multinational corporations because there’s a very real human impact and consequence to this.

“The government here has created a cliff edge. It hasn’t done the work that it needed to do.”

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But Mr McLennan rejected the charge and said calls for a review were “out of touch”.

He added: “I strongly reject the opposition’s claims that the scheme can be paused to wait for a further review.

"Our government has taken more than sufficient time to develop our approach to an issue that has been raised by all parties and we have prioritised the short-term let sector’s voice in its development.

“We have listened to the concerns of the sector and are making sure that as long as applications are in by October 1, they are allowed to continue.”

An SNP amendment which gutted the original Tory motion was passed by 65 votes to 51.

The amended motion was then passed by 62 votes to 54.

Mr Ewing was the only member of the SNP to twice vote against his party.

The SNP said four other MSPs who voted against the government had done so in error.

The Scottish Greens accused Labour of “selling out communities” by voting with the Tories. 

MSP Ariane Burgess said: “Communities across Scotland will feel betrayed by the Scottish Labour Party, who are lining up with the Tories to try to halt much-needed regulations that are vital to managing the dramatic growth of short term lets and the impact on communities.

 “They are at odds with their own colleagues in Labour-run Edinburgh Council, who have said that they support sticking to the October 1st deadline. 

“They are also at odds with the Labour government in Wales which is developing a licensing scheme that follows the Scottish model.

“There is no direction and no principle behind these attempts to block our progress. It is opposition for its own sake. 

Fiona Campbell, CEO of the Association of Scotland’s Self Caterers, said:  "We are pro-regulation but the right balance has not been struck.

"What currently stands is onerous, guilty of severe overreach, jeopardises the viability of the Edinburgh Festivals and Scotland’s position as a leading visitor destination.

"It will be catastrophic not only for the £1bn self-catering industry but B&Bs, as well as those in tourism and hospitality including cafes, restaurants and taxis who rely on our guest spend.

"The Scottish Government doesn’t need a repeat of the deposit return scheme fiasco on its hands, but it is repeating the same mistakes, blindly forcing through incompetent legislation."

Andy Fenner, CEO of the Short Term Accommodation Association, said:  "We remain deeply concerned that the holiday let industry, a sector that brings so much opportunity and prosperity to Scotland, has become the fall guy for insufficient housebuilding over many years.

“It’s vital that those yet to apply for their licence do so by October 1, otherwise they won’t be able to continue operating while their application is decided. They will be treated as new operators who cannot accept bookings until they have been awarded a licence.”