Tourism Debate - 14th May 2009
Moved By Lord Pendry
To call attention to the opportunities for the United Kingdom tourism industry’s growth and greater contribution to all parts of the economy; and to move for papers.
Lord Pendry: My Lords, I am pleased to secure this debate at a time when there is so much doom and gloom around us. As I am the chairman of the All-Party Parliamentary Group on Tourism and was previously the shadow Minister for both sport and tourism for five years, I continue to have a major interest in the topic under discussion.
By now many people have felt the effects of the crunch, but I think that most people recognise that the situation has little to do with the management of the UK economy and that it is a global problem. However, the purpose of this debate is to lift some of the doom and gloom that lingers around us and instead highlight opportunities for growth in the tourism industry and its greater contribution to sustainable economic growth. As your Lordships know, tourism is no small industry. Last year it was worth £86 billion and constituted 8.7 per cent of the UK’s GDP—three times more than, say, the agricultural sector. It really does touch the parts that other industries do not reach. Every constituency, local authority, and region benefits from our visitor economy. The tourism industry creates jobs at all skill and wage levels. It regenerates communities, both urban and rural, and cannot be outsourced or transferred overseas.
In the 18th century we had vast agricultural, wool and linen industries. Now tourism is the only one that has grown. In the 20th century we had vast manufacturing industries, such as coal and steel. Now tourism is the only one not in decline and which has grown. In the past few decades we have seen our call centres, IT and technological industries grow here and then be outsourced overseas, but tourism remains here and grows here. With such a great legacy, it is no surprise that the tourism industry directly supports 1.4 million jobs and indirectly supports 2.7 million jobs, which is 8.5 per cent of the country's workforce.
That is not to say that tourism has been immune from the effects of the downturn. However, recent research by VisitBritain and Visit London shows that despite the gloom and doom, British residents still want to take a holiday, increasingly in the UK. After all, we have great attractions here: great heritage, history, theatre, sport and, increasingly, world-class restaurants. We have never been more affordable to our potential overseas visitors. It is pleasing to read some good news from some financial experts. Steve Johnson, deputy editor of the Financial Times, stated recently that the Budget will give a boost in the City at the expense of the rival markets of Luxembourg, Dublin and the Cayman Islands. Only last week, the Daily Telegraph offered 10 good reasons for being more cheerful. Also, at the beginning of the month, the Financial Times published a survey that suggested that consumer confidence and optimism was at its highest all year.
I urge the Government to capitalise on those sentiments, because domestic tourism accounts for 78 per cent of total UK tourism expenditure. The relative position of sterling against the world currencies means that this country represents better value than it has for years. We are 20 per cent less expensive for Americans than at this time last year and 37 per cent less expensive for Chinese and Japanese visitors.
Let us not forget tourism in other forms. The UK generates foreign earnings of about £1.5 billion from 500,000 students who study in this country. More importantly, there is strong evidence that previous students often return to the UK with friends and family, as tourists or on business. Travel business to the UK constitutes 24.5 per cent, or £9.1 billion of total overnight tourism expenditure. Many businesses have begun to promote eco-friendly practices through water conservation, energy-efficiency, water management, biodiversity and recycling campaigns. Major hotel companies have introduced low carbon initiatives, which the Carbon Trust has estimated will have reduced CO2 emissions by between 6 per cent and 19 per cent.
Those statistics are in themselves impressive, but the tourism industry as a whole could be in much better shape. It could create more jobs. It could deliver more revenue to the Exchequer from our overseas visitors. It could equip young people with skills and careers and generate more civic pride in more of our cities, as we had in Liverpool last year. If only the Government were to give it the support, the political and financial investment, that it deserves, we would be in a better state.
The British tourism framework review, launched in February, revealed that the Government could create real jobs in all parts of the country, increase revenues to the Exchequer and obtain the highest return on investment available. They could achieve all that in weeks, not months, by increasing investment immediately in the marketing of this country overseas. It must be remembered that VisitBritain was voted the best tourism board in the world by its peers and a panel of leading travel writers. It has representatives in 36 countries around the world and has expanded in India, China, eastern Europe and south-east Asia.
Past examples have shown that there is much to gain from government investment. A very good example comes from the campaign implemented by VisitBritain after the foot and mouth disease outbreak and the 9/11 attacks, which significantly decrease tourism in 2001. The campaign consisted of £20 million from Treasury reserve funding, match-funded by the industry to create a £40 million campaign in Europe and north America. Within a year, the campaign had generated 1 million additional visitors, who spent £500 million on goods and services in the United Kingdom. Those visitors maintained the jobs of about 12,000 British workers and returned an estimated £90 million straight to the Exchequer.
The willingness of the Government to invest was reflected in January, when they held a tourism summit in Liverpool to mark the end of the city of culture festival. At that summit, the Prime Minister, the Secretary of State and the Minister for Tourism acknowledged that the Government needed to support the sector more and asked for the industry to supply the Government with a list of priorities. Immediately, the industry responded to that request and submitted its priorities, which included tactical marketing campaigns, greater co-operation in public expenditure on tourism, financial sensitivity to seasonal tourism, and the resolution of regulatory issues such as visa fees and air passenger duty. I urge the Government to review each of those recommendations without more ado.
I end with a historical perspective. Forty years ago, a Labour Minister, the former Secretary of State, Anthony Crosland, recognised the importance of the tourism industry and its contribution to all parts of the economy, with the introduction of the Development of Tourism Act, which, incidentally, is the only tourism Act on the statute book to date. It brought into being the national tourism boards of the United Kingdom and established the framework under which tourism has grown. In the debate on tourism on 22 January in this House, no credit was given to Anthony Crosland for introducing the Act, and I am very pleased to put the record straight today. Forty years on, we have another opportunity to invest for success and growth, which will benefit all parts of our local, regional and national economies.
We must seize this opportunity to support one of our most dynamic, sustainable and home-grown industries. Tourism must be taken more seriously by Governments. Admittedly, it is a difficult industry to represent itself, because it is so diverse, but it will need a strong Secretary of State to bang the Cabinet table on its behalf.
The Earl of Caithness: My Lords, I declare some interests. I am a trustee of two castle tourist attractions and chairman of the Caithness Archaeological Trust and am involved in the gathering to be held in Edinburgh shortly.
I am most grateful to the noble Lord, Lord Pendry, for introducing the debate because, sadly, I was unable to take part in the debate in January introduced by the noble Earl, Lord Glasgow, who will speak shortly. It was interesting that that debate concentrated on the lack of interest by government in tourism; that was highlighted quite strongly. Yesterday, we were discussing carbon emissions as part of the Climate Change Act orders. It occurred to me that when visitors come to Britain they need to come either by plane, by ferry or by train and that we are a long, thin island that requires a lot of travelling. It occurred to me that the Government were seeking to meet the targets on carbon emissions by reducing the funding for tourism, so that people would not come. Can the Minister confirm whether that is a hidden government policy?
This country has lost its traditional economic and industrial strengths. Even the one shining post-industrial light, financial services, has faded. The Government are now driving the wealth generators away from our shores, so increasingly, people will grasp at tourism as the new saviour. Sadly, the mentality generally matches that grasping: pack them in, stack them high and sell the brand quick. That may be right in some areas, but all the surveys that we have carried out in the north of Scotland show that people want exactly the opposite: quality, not quantity. Most of them go there because they cannot find what they want elsewhere.
When discussing tourism in the UK, it is too simplistic—but tempting—to focus only on the main cities and prime destinations. To produce a solution for them and think that solves the problem for the whole of the UK is a road to ruin. Tourism is a multifaceted business that is international, national and regional. It encompasses large, medium and small-sized businesses, which, although often run by volunteers, form an important and too often neglected part of the mosaic, as they do not have a strong, united voice. It also covers hotels, bed and breakfasts and restaurants as well as visitor destinations. It is, as the noble Lord, Lord Pendry, has just said, very diverse.
There need to be a number of solutions. To make them the success that they should be necessitates strong links and a common sense of direction between central government, local government, development agencies, statutory agencies and the private sector. Those links need to be flexible to accommodate the different requirements of the various sectors and allow the niche markets to play their full part. Regrettably, those links have become too fragmented. Consequently, the agencies have become much too rigid and inflexible and this is causing huge damage to the industry.
Even though the average length of stay and spend per night by visitors is less in Scotland than in England, tourism is still hugely important, especially in the Highlands, where 14 per cent of all employment is tourist-related, compared with the Scottish average of 9 per cent. Thus, the further north one goes, the greater is the dependence on tourism, but the shorter is the tourist season. It is even more necessary to maximise the opportunities that we have. Due to the distinctive built heritage, culture, history, food and drink, each area is different and thus should be encouraged to create its own niche market, to which people would travel and pay to see.
Let me take Caithness as an example. A recent survey showed that most people came for its iconic landscape and scenery. Furthermore, 33 per cent of our visitors said they had visited archaeological sites, compared with 17 per cent for the Highlands as a whole. In the past six years, the economy of the area has benefited from more than £2 million, due to the archaeological work that has been carried out by the private sector.
We have proved to the Highland Council that there is a good economic return from the preservation and proper presentation of our old stones. Indeed, there is still a huge potential to improve facilities so as to maximise the enjoyment of the visitor as well as to improve that economic return. However, it cannot be done by the private sector alone. Other agencies and the local authority must play their part. In particular, the local authority must remember that the many visitors who come to see the archaeological monuments in their natural setting will not come to see them if they are beside a wind farm or next to a modern kit-built house.
Central government holds the key to a successful industry and needs to show its full commitment to improving tourism. Planning is one of its roles. It has to be even more mindful of the importance of tourism to rural areas as most of its members come from cities and towns. It also needs to work closely with local government to ensure that the appropriate travel infrastructure is in place so that visitors can access all parts of the country easily, which is not the case now.
Turning to the other agencies involved in tourism, I noted that in his reply to the British tourism framework review report, Achieving the Full Potential of the Visitor Economy, the Secretary of State says:
“Britain’s national tourism agency will need to provide a core marketing capability for its strategic partners, including industry, the national tourism organisations in England, Scotland and Wales, VisitLondon and the RDAs, in addressing global markets”.
The national tourism organisation for Scotland is VisitScotland. Unfortunately, many tourism organisations have lost faith in that agency and are doing their own thing because they feel that they have been paying a lot of money for no reward. This is a major problem. There needs to be a much better and closer working relationship between VisitScotland and the diverse local communities and tourist organisations if the Secretary of State’s and the Tourism Minister’s words are not to become just another sound bite.
One example of where that co-operation, after a slow start, is now working well is the support VisitScotland is giving to the private sector, which is organising the largest get together of the Scottish diaspora, with the gathering to be held in Edinburgh, on the last weekend of July. Not since the visit of George IV in 1822 will Edinburgh see such a spectacle.
VisitScotland has been amazed at the pull that ancestral tourism has and the gathering is expected to boost the economy by £8 million, which is 20 per cent of the expected economic benefit of the whole year of the homecoming. The interest that has been shown from around the world has been generated not by digital marketing and associated e-commerce, as the Minister put it in the same reply I referred to earlier, but by the private sector getting out on the stump and proactively marketing. Encouraging people to visit the UK is not done just by sitting in an office macro-managing tourism, but by getting out there and being physically where the markets are.
Earlier I explained that archaeology and heritage can be an attractive and economically beneficial niche market. Another government agency that needs to look closely at its working methods is the Heritage Lottery Fund. It is not just that its budget has been slashed to help pay for, in some parts, the much resented and increasingly taxpayer funded London Olympics, but it does not appear to be interested in heritage anymore. It has become too inflexible in its requirements and criteria. Without its support, the best of our heritage, in the more remote parts of our island, will not be preserved. That, in turn, will have repercussions for tourism and the economy.
What we need is a diverse tourism industry that puts a premium on taste, not tat; that leaves visitors feeling spoilt, not soiled; and that leaves a land that is fit, if not for heroes, then at least returnees. Too much of our tourism falls badly short of these basic criteria. I appreciate how difficult it is to pull all the sometimes competing strands of tourism together but unless a much more determined effort is made by all involved, with a strong lead given by the Government, Britain will continue to decline in importance as a tourist destination and our economy will be much the poorer.
The Earl of Glasgow: My Lords, I, too, should like to say how grateful I am to the noble Lord, Lord Pendry, for giving us another opportunity to debate the state of British tourism. I will be endorsing much of what he said.
Since our debate in January, VisitBritain has published its British tourism review, entitled, Achieving the Full Potential of the Visitor Economy. This, again, was referred to by the noble Lord, Lord Pendry. It was commissioned by the then Secretary of State for Culture, Media and Sport, James Purnell, and is far and away the most comprehensive and objective report on the state of British tourism so far. Among many other things, the report regrets—as I think we all probably do—that successive governments have paid so little attention to tourism and, even now, are reducing VisitBritain’s marketing budget. I would urge the Minister to take special note of this report, commissioned by one of his colleagues, and try to persuade the Government to take on board some of the report’s considerations and recommendations.
Three important facts emerge from the report which the Government must surely regard as significant. The first, which the noble Lord, Lord Pendry, has already mentioned, is that tourism is Britain’s fourth largest industry—it is Scotland’s second. It employs 1.4 million people full time and another million or so part time, and contributes £86 billion to the economy. This in itself is surely a good enough reason for the Government to take tourism seriously.
Secondly, easily the largest number of small businesses that start up yearly come from the tourist industry. Some of these are very small, with turnovers of less than £100,000 a year, but in a time of high unemployment tourism offers a relatively cheap and practical way for budding entrepreneurs to start up a business on their own. Surely the Government should actively encourage this.
Thirdly, a thriving tourist industry—it looks as though the tourist industry will thrive this year and even benefit from the recession—can absorb large numbers of the unemployed, if only on a seasonal basis. So often in this business, a cheerful and friendly disposition is far more valuable than a university degree. Yet despite these important facts, successive Governments have allowed our tourist industry to fall further and further behind our competition—other countries. Relative to the size of their populations, far more people go to Ireland and New Zealand than to Britain. You would expect Britain to have as many, if not more, attractions than either of those two countries, but no: it is because the Irish and New Zealand Governments believe tourism to be important to their economies, and they are prepared to spend money promoting themselves and making certain that the visitor has a good experience when he gets there.
In this time of recession, with a weaker pound and fewer Britons going abroad for their holidays, this is the ideal time for our Government to invest in their tourist industry, not cutting its budget. Apart from increasing VisitBritain’s budget so that it can more effectively market Britain throughout the world, the Government should also through their various agencies encourage and assist new small businesses to start up—new craft shops, new cafes, specialist tourist operators, coach services, local museums, farmhouse bed and breakfasts and all sorts of new visitor attractions and sporting activities.
What we most lack in comparison with other countries are tourist information centres. This is one of my hobbyhorses; I feel very strongly about it. There are so few of them now, which is particularly noticeable at gateways to the country, particularly airports. A tourist information centre is very much more than a place where you can pick up a brochure and ask for train times. It should proclaim to the world: “You are welcome here. We want you to learn more about our country. We want you to get the most out of your visit here, and when you have more time we want you to come back again”.
In a recent survey by VisitBritain, Britain came 13th out of 14 countries that were tested in its reputation for friendliness to the visitor. This is very shaming. A handy visitor centre manned by efficient, knowledgeable and above all friendly staff could do more than almost anything else to improve our image. Yet more and more of the still existing TICs are being closed down. The reason that is given is that they are costly to run and usually located on expensive prime sites, although there is no point in having a TIC if it is hidden away. They are usually partly or largely financed by local authorities, which are being forced to cut their costs. Some argue that because everything is done on the internet nowadays, they are not as necessary as they once were, but this completely misses the point. Tourism is a people business. The visitor wants human contact and friendly help. He cannot get that from his computer: at least, I do not think that he can. I ask the Minister to consider trying to find some way of helping local authorities to keep their TICs open and, where appropriate, to open new ones, starting of course with the airports.
Finally, I shall quote from the excellent report to which I referred and which declares:
“a belief that it is time for tourism to be better recognised for what it is—one of the dynamos of the British economy, reaching parts of the economy other industries cannot reach”.
I hope that the Minister will seriously consider adopting some of the report’s recommendations.
The Earl of Sandwich: My Lords, six years ago, my noble kinsman, the noble Lord, Lord Montagu of Beaulieu, spoke in a similar debate that was also opened by the noble Lord, Lord Pendry. He said that he had been speaking on tourism in this House for 50 years. I wish that he was speaking today as he has accumulated so much experience of tourism, both in Parliament and in his own successful ventures at Beaulieu. I have no pretension to follow him, except that I also seek to promote the potential of the south-west, in which he played such an outstanding role.
The 2003 debate was held at a time of great uncertainty because of the effects of 9/11 and Iraq, the foot and mouth outbreak and SARS. It was held soon after the Government had announced the creation of VisitBritain. Yet most speakers agreed, as they seem to do now, that the Government were not giving enough support to one of their most important industries at a vulnerable time. Now we are in a recession and the same is true today. The words of the noble Lord, Lord Montagu, seem highly relevant. He said:
“Tourism has always been vulnerable to major disruptions, and the cost to our industry and to jobs can be enormous. We need an early commitment from the Government to be prepared to provide a long-term investment to help Britain to improve the tourism infrastructure and win its share of demand against ever-growing competition from other nations. More than ever before, we cannot afford to neglect our tourism potential. We do so at our peril”.—[Official Report, 30/4/03; col. 746.]
The then Minister, the noble Lord, Lord Davies, who was here a moment ago, had no money to offer that day. His response was in kind. He pointed to the VisitBritain merger, the increased role of the regional development agencies and partnership with industry. It will be interesting to see whether our new Minister can provide anything more tangible. Meanwhile, the new flagship VisitBritain has itself had to endure an 18 per cent cut over three years and we have a diminishing share of the world market.
Can we at least expect the Minister to reaffirm the Government’s support for recommendations 5, 6 and 7 of the British Tourism Framework Review, which urge the raising of the profile of tourism in national policy? This seems to me essential considering how low the Government have allowed it to fall. The DCMS response is quite positive. The new advisory council and the cross-Whitehall group are obviously a step forward but results will have to come from political
In a recession, the tourism industry will need to show a lot of ingenuity and I am pleased to say that in the south-west this is happening. The quiet corner of the west country where I live, a few miles from the sea, has woken up to a completely new concept of tourism, namely the Jurassic Coast, now declared a world heritage site. The entire west Dorset and east Devon coastline is fast becoming another wonder of the world—a geological walk through time, spanning the Triassic, Jurassic and Cretaceous periods. I spend part of last Sunday in a newly discovered pub overlooking the Chesil Bank at Portland, sipping my Jurassic beer. The Olympic sailing events promised at Weymouth and Portland in 2010 will provide a huge opportunity for tourist attractions along this coastline and Dorset must make the most of it.
The coast nearest to me beyond Bridport is apparently Lower Jurassic and 180 million years old. As a result, Lyme Regis and Charmouth have become great centres for old fossils, appropriately enough perhaps for my generation, and for many young people. The 630-mile-long south-west coast path from Poole to Minehead, assuming that it emerges unscathed from the Marine and Coastal Access Bill, is already more or less open to serious walkers.
I remember driving foreign tourists as a student and feeling exasperated that they always wanted to go to the same places—Stratford, Broadway, Bath. Perhaps it was the hall porter who used to make those decisions for them. I notice the VisitBritain website still takes you automatically to Bath on its west country map, and then straight across to Cornwall. If you persevere, however, and click on Jurassic, you will now virtually explore the gateway towns along the Dorset coast.
I would like to hear how the Minister feels about the increased role of the RDAs. I confess I am suspicious that a lot of the regional idea is about strategy and partnership and not a lot about helping people in the tourist industry. For example, I find on the Partners for England website the following statement:
“A national tourism strategy for England is a priority for Partners for England. One of the key outcomes of the British Tourism Framework Review is that VisitEngland should work with Partners for England to create and deliver a ‘bottom-up’ national strategy”.
And then it says:
“This area of the site will be expanded in due course to include information about strategy development”.
Why can we not read about real support for people involved in the business of tourism and not always about strategy? I sympathise with the comment of the noble Earl, Lord Glasgow, about the TICs. Tourism promotion support must be effective at local as well as regional and national level. We need new ideas which recognise the commitment of practitioners on the ground. I have my doubts whether the RDAs can achieve this. All the southern RDAs have suffered cuts this year and the south-west RDA is short of about £50 million. It did allocate £7.12 million to a project within the Jurassic Coast framework programme but announced in January that it will be withdrawing from some of that—from proposed visitor centres in Exmouth and Seaton.
In Dorset, we have severe communications and transport problems common to many rural communities, including poor mobile telephone and broadband coverage. Local authorities are not doing enough to overcome the delays and costs created by planning and listed building regulations, and all the obstacles which have blighted excellent new tourist initiatives, such as Destination Dorset. But there is a government responsibility here too. I know that the Minister is very familiar with this subject, but does he accept that there is a digital urban-rural divide and that communications failures are a new form of social deprivation? People are even moving house to find broadband.
Historic houses in remote rural settings make an important contribution to the wider economy. I declare an interest as a member of the Historic Houses Association and the Country Land and Business Association, and I am the joint owner of a tourist attraction in west Dorset. When my wife and I took on an historic house 25 years ago we received a handful of visitors and we now receive about 10,000 each year. We were proud to be named by Country Life as the nation's finest manor house. We enjoy it and mostly it works well, but we do it at some personal cost. Managing a property like this, along with all the undertakings that we have to give, is extremely hard work. The Government could help us by imposing the minimum of restrictions. Historic houses now receive some 16 million visitors per annum, and more than four in five visitors to the UK are likely to see an historic building. Yet the Government insist on tighter regulation of this sector. Licensing fees, permissions for special events and temporary structures, form-filling, questionnaires, and changing the trading regime for bed and breakfast accommodation, which is hitting a lot of people, are all of concern to members of the HHA and the CLA like us.
In conclusion, my concern in entering this debate is that the Government should think harder about the people involved in tourism and remove some of the negative effects of their wider fiscal and economic policies. Tourism is the public face of our nation: it is the face we are proud to put on. Support for tourism should not be all about coastal gateways, showcases and visitor centres, but also should encourage the individuals who meet tourists every day in their own homes, the small businesses and the attractions that make up the fabric of our national life.
Lord Davies of Coity: My Lords, I, too, am grateful to my noble friend Lord Pendry for initiating this debate on tourism. This framework review on British tourism has, as has already been mentioned, information and statistics greater than I can possibly express in this debate, but I recommend it as a reading for your Lordships. As we should all be aware, tourism is vital to the economy of the United Kingdom. Last year, spending by overseas visitors was estimated to be more than £16 billion, which came from the 32 million people who visited this country. With the decline of the value of the pound, Britain is likely to remain a major tourist destination even during the recession.
This year, domestic tourism is also likely to grow. More and more, the evidence is that Britons will turn away from expensive foreign holidays and will look to holidaying at home. A recent survey by VisitEngland found that 21 per cent of people who went on holiday abroad in 2008 would consider looking to the United Kingdom for a break in 2009 to save money. This is a golden opportunity for the domestic British tourist industry. As we know, the whole economy benefits from a successful tourist industry. It benefits the local and national transport operators as most tourists do not take or use their own transport when on holiday. It benefits the local food manufacturers who produce goods that are either sold in the locality or used directly by hotels and restaurants in the tourist areas. It also benefits the distribution companies, which transport the goods and services needed in the various tourist locations up and down the country.
Retailing in particular is both a major beneficiary of tourism and vital to its success, whether it is food or non-food items for self-catering holidays, or simply a whole variety of things associated with being on holiday. One thing is certain: when people are on holiday, they spend a lot of money in the local shops. It is estimated at 15 per cent of the total holiday spend. In fact, the whole shopping experience is often an integral part of the overall holiday itself. Retail and tourism are clearly closely linked, and it is true to say that, without a vibrant retail sector underpinning it, the tourist destination could fail.
Tourism is also a major source of employment. Directly, as has been said, it employs around 1.5 million people. When one adds on those jobs indirectly linked to tourism, such as shop staff, the figure is considerably more. This is almost 10 per cent of all people in employment, and it is growing in a developing sector.
Look at how it has changed in our lifetime. Not only have the standard and variety of accommodation greatly improved, but there have been many other developments. We have seen the arrival of large theme parks such as Alton Towers, which has become one of the best theme parks in the world. With an international reputation, it has become a must-visit attraction for young, domestic and overseas tourists.
We have seen museums changed beyond all recognition, with many becoming hands-on attractions, with lots to do and explore. Many innovative ideas have been developed and come into practice, such as Legoland. Whole parts of run-down cities have been transformed to reflect the display and heritage of the city itself, such as the Albert Dock development in Liverpool, with its museums, shops and other attractions.
However, there still remains great potential for the tourist sector. As technology develops, new things will be possible that we are unaware of today. In the mean time, we have a tourist opportunity just around the corner. I am, of course, referring to the Olympic Games, to be held in London in 2012. It is a chance to show the world the attractions not just of London, but of the whole of the United Kingdom as well. The Olympic Games could be a massive boost to the UK tourist industry and the economy itself; if successfully sold, they could bring benefits for years to come.
Tourism is vital for this country. It is a major employer; it boosts many sectors of the economy. Therefore, it is an industry that we should do all that we can to support and advance for the benefit of the whole of the economy. As I live in the north west, I trust that I will have the indulgence of your Lordships to be somewhat parochial in drawing attention to Manchester’s contribution to tourism.
Tourism continues to play a vital role in the success of the Manchester city region. The latest industry figures have revealed that it generated £5.6 billion for the Greater Manchester economy in 2007. The Office for National Statistics has confirmed that during the same period, Manchester remained the third most popular destination in the United Kingdom with 971,000 international visitors, a growth of 6 per cent on the previous year. The significant investment made in Manchester airport has played a key role in this success, and together with the North West Regional Development Agency, the Association of Greater Manchester Authorities, and strong private sector partnerships nurtured over the past 10 years, Manchester is now well placed to improve its position.
Manchester can make a strong cultural offering. The second Manchester Festival takes place this summer and the city is building on its strong sporting tradition. It was home to the very successful Great Britain cycling team at last year’s Beijing Olympics. Manchester United and Manchester City football teams feature strongly in what the city region has to offer, and the city has built a world-class sporting events programme which covers events from the UEFA cup final, the FINA world short course swimming championships and the UCI world track cycling championships.
Finally, I hope that the Government will take what has been expressed in this debate into serious consideration. As president of the Manchester East County Scout Council, I have a long-standing commitment early this evening in the north-west, and therefore I hope your Lordships will forgive me for not remaining until the end of this debate. But I will read Hansard thoroughly on Monday.
Viscount Montgomery of Alamein: My Lords, it is a pleasure to follow the noble Lord, Lord Davies, and I agree that it is a good idea to promote the north-west. This has been a wide-ranging debate and our general thanks are due to the noble Lord, Lord Pendry, for introducing it so comprehensively. As he pointed out, tourism is a vast industry generating great economic activity and much needed foreign exchange. It is very labour intensive and requires large long-term investment, especially in hotels.
We are all dependent to a certain extent—I know that I am—on the good information produced by the British Hospitality Association, which represents the entire hospitality industry and produces excellent background material. I have spoken in many tourism debates, including one held this time last year, but unfortunately not in the one in January that several noble Lords mentioned. I agree entirely with other speakers that the Government have done very little for tourism recently. This is especially curious in the current economic situation, as the Prime Minister is always talking about spending our way out of recession. For example, the hotel industry has invested £25 billion over the past five years, but last year the Government abolished the hotel building allowance and many other capital allowances. That seems to be rather a contradiction.
In the shorter term, as other noble Lords have asked, why has there been no encouragement for people, both domestically and internationally, to spend their holidays in the UK in view of the pound’s weakness against both the dollar and the euro? The noble Lord, Lord Pendry, mentioned a good example from several years ago. The Government invested a small amount of money which in a year generated 1 million tourists who spent over £500 million.
However, another example of muddled thinking is the fact that the reduction of VAT to 15 per cent coincided with an increase in excise duty on beer, which meant that the counter price in public houses was completely unaffected but the administrative burden vastly increased. Whenever I can, I take the opportunity to spend time walking in the countryside. In the middle of the walk, I often stop at a pub, which is usually run by a small team, frequently a husband and wife. The result of the Government’s policy, as we have seen in the press, has been frequent closures of what are in fact social gathering centres for local communities. A great deal needs to be done.
Another strong recommendation from the BHA is to introduce daylight savings, which it suggests would increase tourism and leisure expenditure by £3.5 billion per year as well as impacting on road safety and CO2 emissions. This has been suggested many times in this House—Bills have been introduced and I have spoken on it a huge number of times—but the Government have always ducked it.
Generally, as other noble Lords have said, we need to reduce bureaucratic expenditure and the very numerous bureaucratic rules and get people back into productive work. Restaurants and hospitality present a huge job-creating opportunity. The Government should pay more attention to this and to the excellent and regular reports and recommendations of the BHA.
Lord Rosser: My Lords, I thank my noble friend Lord Pendry for initiating this debate. As we have heard, the number of people deemed to be employed in the tourism industry depends on what activities are considered to be part of the industry, which is why figures quoted often differ considerably. The Culture, Media and Sport Select Committee in the other place said in its report last year that the tourism industry employed between 1.4 million and 2.1 million people in the UK, depending on what was recognised as falling within the scope of the sector. According to the Select Committee, there is a lack of adequate data about the tourism sector on which to base strategic and management decisions, although some progress is being made to improve the situation.
For the most part, the industry is not well paid, except for those at the top end. Seasonal labour and part-time working are key features. Its employees will be among those who have benefited most from the introduction of the minimum wage and they will also benefit from the recent change in relation to tips. Labour turnover is 30 per cent and costs the sector, it is estimated, nearly £900 million a year.
One would like to think that a key priority for the industry as a whole is to find ways of improving levels of remuneration and creating better pay and career structures, although I accept that that is a more difficult change to make for a labour-intensive industry than for one where labour costs are less significant. Around 60 per cent of the workforce in the hospitality sector nationwide is from overseas; in London, the figure is around 80 per cent. I hope that a further priority in this sector will be to take steps to encourage the locally unemployed to take up positions in the sector as they arise.
Tourism is an industry that has seen considerable change in recent years in some areas, with the consolidation of smaller organisations into major tour companies directly offering the full range of tourism services: bookings, tours, hotels, airline services, foreign exchange and coaches. Most organisations in the tourism sector in the UK, however, are small and medium-sized businesses. Obviously this has its upsides, but a downside appears to be that very few small businesses, which account for 45 per cent of the industry’s workforce, access the funding that is available to them for developing staff skills. This is significant, since the UK is still perceived to offer poor levels of service and not to be very welcoming. Language can be a barrier and as a nation we do not put great emphasis on learning other languages, which may be affecting us adversely in the field of tourism.
There has been little growth over the past 10 years in the domestic tourism sector—tourism within the UK—which accounts for 80 per cent of the value of the industry. Inbound tourism into the UK from overseas accounts for the remaining 20 per cent. In inbound tourism, the UK, despite growth between 2004 and 2006, has underperformed in comparison to the world average and it is projected that the UK’s global share of this highly competitive market will continue to fall, although the recent decline in the value of the pound against other currencies may affect the situation.
As noble Lords have said, last year there were 32 million visits to the UK by overseas residents, who spent nearly £16.5 billion, while UK residents made nearly 69 million trips abroad, spending £36.6 billion. Calculations from a survey suggest that, over the last 10 years, expenditure by UK citizens visiting other countries has risen in percentage terms three times more than expenditure by overseas residents visiting the UK. Although there were 32 million visits to the UK by residents from overseas last year, this was a 2.3 per cent decrease from the previous year, with the decrease being greatest in the last quarter of 2008. It is forecast that inbound tourism will fall by 0.7 per cent this year, although, as has been commented, there is evidence from surveys and company bookings that more UK citizens may choose to holiday in this country in 2009.
The Government have done a great deal over the past decade to encourage visitors to come to Britain, through VisitBritain and the regional development agencies, through support for arts and culture and our heritage, through investment in the Olympics and Paralympic Games, through free museums, through improving skills within the tourism and hospitality sector and through investment in our tourism infrastructure and the product on offer to visitors. Public sector funding of tourism stands at about £350 million channelled through a variety of organisations and there is further investment of £500 million a year in improving the industry’s skills base. This represents a level of public sector investment in the industry substantially higher than it was in 1997.
Although I do not have any figures, simply travelling around this country makes one aware of the increase in the number of tourist attractions and venues compared with even a few years ago. The tourism industry represents value for money for the country as a whole. Not only is it a major employer but there is evidence that money spent by VisitBritain on promoting and marketing Britain to potential visitors from abroad brings considerable extra income into the country. VisitBritain has exceeded its return-on-investment target of a ratio of 30:1, set by DCMS in the 2007 Comprehensive Spending Review, which indicates that money spent on marketing our country provides a real benefit to the UK economy for a relatively low cost.
Most visitors to the UK come from Europe and the United States. However, we also need to look to the future and the fact that, as the economies of countries such as Brazil, India, Russia and China grow and expand and their citizens’ standard of living rises, an increasing number of those citizens will be in a position financially to travel abroad. We need to ensure that we are providing the resources to tap into that potentially very large market for new visitors to the UK, including ensuring that the cost of obtaining a visa to visit the UK does not act as a deterrent compared with our competitor countries.
We also need to ensure, particularly at present, that the necessary resources are being provided to extol the virtues and attractions of the UK to our own citizens to encourage more of them to take holidays and short breaks in this country rather than abroad. That would be a further way in which the tourism industry can deliver for the economy at this difficult time, bearing in mind the gap between the amount of money spent by overseas visitors to the UK and that spent by UK citizens travelling abroad.
I hope that, when my noble friend the Minister responds, he will be able to say how the Government intend to assist the tourism sector to develop still further, building on the already substantially increased investment over the last dozen years. The sector has much to offer the economy of this country in terms of both jobs and income. With tourism around the world set to increase, we need to ensure that we are geared towards attracting a significant share of this expanding market to the United Kingdom as well as encouraging growth in tourism within the UK.
Baroness Valentine: My Lords, I thank the noble Lord, Lord Pendry, for securing this debate. I declare my interest as chief executive of London First, a non-profit-making business membership organisation that seeks to ensure that London can compete successfully with other world cities on exports, tourism and inward investment and so continue to generate substantial economic benefits for the whole of the UK.
I join previous speakers in calling the Government’s attention to the importance of tourism to our economy. It supports something like 2.5 million jobs in Britain; certainly in London the leisure, retail and hospitality sector accounts for one in five private-sector jobs, and, in our current economic circumstances, jobs matter. Tourism is one of the few economic sectors to have held up remarkably well this year in the face of the recession which is biting into so many other industries. London, for example, continues to attract more visitors annually than Paris and New York combined. With the pound’s exchange rate at historic lows against both the dollar and the euro, there has never been a better time for overseas tourists to get excellent value for money from their visit to the UK. However, to get full advantage for our economy while the pound remains so competitive, we need to get the message that the UK is now surprisingly affordable to a much wider audience of people across the world, and as quickly as possible.
As other noble Lords have suggested, experience has shown that investing in tourism marketing in this environment generates a return of at least £15 in visitor spending in the UK for every £1 we spend on promotion. So I am delighted that the Mayor of London, in co-operation with a number of boroughs, has seized the opportunity and committed £2.5 million to the Only in London tourism campaign. I am also encouraged by the tremendous response from London’s consumer-facing businesses, with innovative deals, eye-catching PR and real investment in their product, many of them linking to the Only in London theme. My personal favourite project, the revitalisation of Marble Arch, will only add to London's attractiveness for visitors and locals, thanks to the efforts of Westminster Council's leader.
However, we could do so much more to reinforce success. London First, together with other major business organisations, has written to the Secretary of State, calling for the Department for Culture, Media and Sport to provide further investment of relatively small sums—for government—in this campaign. I am speaking only of a few millions in this context, not the billions that we have come to see as a normal financial measure in our discussions about the problems of the financial services sector. Surely a few millions committed with a return of 15:1 for the economy is money well spent on taxpayers’ behalf. Supporting employment in the retail, hospitality and leisure sectors is more efficient than endeavouring to create new jobs in other sectors.
I make this point in relation to London but it is no less valid for the rest of the UK. I very much hope that the noble Lord, Lord Carter, will press his colleagues in government for an urgent response on this point.
While for ice-cream licking retail tourists we already top the league in London, perhaps I may now turn to another undoubted opportunity for tourism growth, both for the capital and for the UK as a whole—the market for large-scale conferences and conventions. This sector is often known as business tourism, but as we all know, international meetings are a feature of life for professionals and managers in every walk of life—civil servants, academics, medics and, dare I say, even politicians.
Overseas visitors to conferences and conventions—perhaps I can characterise them as Burberry-buying business tourists—also contribute substantially to our economy, over £1.5 billion a year in London alone. However, in this sector we are by no means world-beaters. In the 1970s, London was the number one destination city internationally for conferences and conventions, but we now rank a lowly 17th behind Barcelona and even Vienna. Essentially the problem lies in our infrastructure—a familiar British disease, some might say. We lack a modern, large-scale, purpose-built convention centre and hotel complex that could house a typical world-wide conference of, say, 10,000 specialist orthopaedic surgeons, together with their partners and supporting staff. More than 100,000 delegate days of large-scale conferences are turned away from London each year, because our venues and accommodation are inadequate for these types of event. Meanwhile Paris with its Palais des Congrés, Barcelona with its business tourist facilities, developed to exploit the international profile from its Olympic Games, and even Vienna, with not one but three large-scale convention centres, all profit at our expense.
Repeated studies—most recently by KPMG in 2006—show that a publicly funded convention centre in London along the lines that I describe would provide substantial positive return on investment to our whole economy. Now the costs of both development land and construction are lower than they were a year or two ago, making the numbers even more persuasive. The potential is well illustrated by ExCeL in east London, the site of the recent G20 conference, which is already investing in increased conference space to house an additional 5,000 delegates, funded by its owner in Abu Dhabi. What is needed now is political and financial commitment from government and mayor to the creation of a purpose-built landmark convention centre.
Talk of nearly half a billion pounds of investment may send some running for cover. It is a substantial sum, but the prospective returns are at least as substantial. It is an investment with tangible financial payback and represents real value for money. I call upon the Government to work with the mayor and the capital’s business community to bring this project to reality, to attract conference visitors away from the more established venues in Europe and elsewhere, and to provide a lasting major contributor to the UK economy. I know that the mayor has written to the Prime Minister signalling his readiness to proceed. I call upon the Prime Minister to respond in equally positive terms.
Lord Lee of Trafford: My Lords, I declare interests as a former Tourism Minister, a former member of the English Tourist Board, a former chairman of the Museum of Science and Industry in Manchester and chairman of the Association of Leading Visitor Attractions. I also have shareholdings in tourism, hospitality and transport companies detailed in the Register of Members’ Interests.
I congratulate the noble Lord, Lord Pendry, on securing the debate and support virtually everything that he said in his opening remarks. This debate follows relatively closely that initiated by my noble friend Lord Glasgow on 22 January, which gives me the opportunity to challenge some of the points that the noble Lord, Lord Carter, made in responding to that debate. Much was made in the debate of the tourism summit in Liverpool, which was positively dripping with Ministers from the Prime Minister, the Secretary of State at DCMS, the Tourism Minister. However, in that debate I expressed cynicism. I said that,
“the test will be what action the Government take. Will they take tourism seriously for the first time, because, at a time of rapidly rising unemployment, a very worrying economic situation and a weak pound, perhaps tourism’s time has come?”—[Official Report, 22/1/09; col. 1815.]
What has happened since that much hyped summit? It is true that the Tourism Advisory Council has been established, which I believe met on 30 April. When does it next intend to meet and how frequently will it meet? However, there has been no new funding for VisitBritain and no new funding for the Olympics, despite pleas, whereas billions of pounds have been spent bailing out our banks.
There was no mention of tourism in the Budget. However, buried deep in the Budget was the removal of a special tax break for holiday lets, which encouraged many to accommodate tourists. So much for the Government taking tourism seriously. I wrote to the Secretary of State on 27 April, asking whether the DCMS had been consulted before that decision was taken by the Treasury. I got a reply today which dodged that question.
I should like to challenge some of the points that the Minister made in winding-up the debate on 22 January. He said:
“I felt that a number of noble Lords rather flippantly criticised the Government for not including ‘tourism’ in the title of the department”.—[Official Report, 22/1/09; col. 1830.]
He then rather flippantly himself made a rather weak joke about the length of business cards or the time taken to answer the telephone if everything for which the department was responsible was included in its title. I assure him that there was nothing flippant in my or the industry’s anger that tourism—our fifth largest industry—is not included in the title. There is deep resentment about that.
The noble Lord referred to a joint ministerial committee that would look at issues that touched multiple departments. There is nothing original in that concept. Indeed, when I was Tourism Minister, we had just such a committee 20 years ago. But the problem is that that committee has to be chaired by a very senior Minister. It is not good enough to have it chaired by the Tourism Minister. I speak from experience. Will the noble Lord tell us the date of the next ministerial meeting on tourism and the frequency of future meetings?
I challenge the noble Lord on the whole question of double summer time, for which I and others strongly argue. Nothing would give a bigger boost to tourism than double summer time. The noble Lord said that,
“we are aware ... that while the tourist industry may favour this change, many sectors in our communities are strongly opposed”.—[Official Report, 22/1/09; col. 1834.]
Certainly, many bodies are in favour, as was said earlier; for example, those representing tourism, road safety and sport. Can he please list for me today, or perhaps subsequently in writing, the many sectors, which are strongly opposed?
As a massive supporter of UK tourism, I have been fortunate, over 50 years as a holiday maker, Member of Parliament and Minister, to travel the length and breadth of the country. Since we debated tourism in January, I have stayed in England, Scotland and Wales on short holidays, in many excellent hotels of quality. I agree so much with what the noble Earl, Lord Caithness, said about quality and about the rising quality of our industry to which the noble Lord, Lord Rosser, referred a little earlier. In England I stayed for a long weekend in the Yorkshire Dales at the Traddock Country House Hotel in Austwick near Settle, which gave an absolutely outstanding level of comfort, food and service. In Scotland, during a salmon-fishing week, I stayed at the Ednam House Hotel in Kelso, a magnificent location on the River Tweed and a very friendly, traditional, sporting hotel. Finally, over Easter, in Wales, I stayed at the St Brides Spa Hotel at Saundersfoot, which overlooks the harbour and has had £6 million of investment go into it. There was an outstanding welcome from the staff and an opportunity to walk the wonderful Pembrokeshire coastal paths.
It should be a very good year for domestic tourism in 2009, with the weaker pound and our economic situation. A great summer could put icing on the cake or, perhaps, sausages on the barbecue. Last week, I was reading an article that talked about the resurgence of the great British picnic. Yesterday, ALVA, the Association of Leading Visitor Attractions, had its council meeting. We had a reception at the Tower of London, a Thames boat trip down to the Olympic site and a dinner at Waterman’s Hall, hosted by two of our members, the Historic Royal Palaces and British Waterways.
Many members reported welcome growth in visitors this year. English Heritage was up 12 per cent. The National Gallery was up 23 per cent. The Portsmouth Historic Dockyard was up 20 per cent and the National Maritime Museum up 16 per cent. Many reported an excellent Easter but that there was a negative on the corporate entertaining front, which is very difficult at the present time. Interestingly, the Natural History Museum found, in a recent survey, that 50 per cent of the public did not appreciate that admission was actually free. There is much to do here. The Olympic site was a hive of activity. There is considerable optimism that it will be completed something like a year before 2012. We hope that this does come to pass. It is obviously a great pity that the Government are not seizing the opportunity and putting more marketing spend behind the Olympics.
What would the industry like to see from Government? We would like to see greater funding for VisitBritain. I am pleased to say that we have a Lib Dem commitment to increase funding for VisitBritain. I should like to congratulate Sandie Dawe on becoming chief executive of VisitBritain. I wish her every success. We need greater co-ordination of public expenditure on tourism by our national tourist boards, by the RDAs and local authorities. VisitEngland—which I welcome—has a role to play here. I very much support what my friend and colleague Lord Glasgow said a little bit earlier about the tourist information centres.
We need to review the increase in air passenger duty, which presents a barrier to travel within the United Kingdom. We should review the phased withdrawal of the hotel buildings allowance that was referred to by the noble Viscount, Lord Montgomery, a little earlier. The Government should also tackle the expense and inconvenience of visas by introducing, on a trial basis, a Schengen plus scheme, or a bolt-on visa, in our core overseas markets so that visitors from these countries, who have already obtained a Schengen visa, can then apply for a UK visa at a reduced price.
A reduction in VAT should be considered as well. The UK is one of only five EU members that levy VAT at the standard rate on visitor accommodations. With regard to visitor attractions, the standard rate applied in the UK is significantly above the EU average. I also very much support the plea by the noble Baroness, Lady Valentine, for a major convention centre in London. We sadly miss this.
Finally, with 81 per cent of people who are likely to visit the United Kingdom saying that they are likely to visit an historic house or castle, the Government should acknowledge the work of the HHA. I pay tribute to the noble Earl, Lord Sandwich, for his work with it. There is something like a £1 billion backlog of outstanding repairs at listed places of worship. Charitable and privately owned heritage could play a major role if it had the resource. The Government should restore English Heritage’s grant in aid to 1997 levels and introduce fiscal incentives for maintenance.
I conclude with the words of the Tourism Alliance:
“The Government can either continue to make spurious claims that it is supporting tourism and squander this current opportunity, or it can take tourism seriously by developing and implementing a strategy that reduces the regulatory burdens, removes barriers to overseas visitors and provides the funding required for the national tourist boards to successfully compete in this global market”.
Dialogue with the industry is not enough; we want action.
Lord Howard of Rising: My Lords, I, too, thank the noble Lord, Lord Pendry, for introducing this debate. As a number of your Lordships have pointed out, tourism is one of the major industries in this country, so it is appropriate that such an important subject is debated in this House. I must declare an interest as the owner of a tourist attraction which has between 30,000 and 40,000 visitors a year.
Predictably, there have been calls during this debate for more support to be given to tourism, with attention being drawn to its decline. I have some sympathy with the argument put forward by Her Majesty’s Government on a previous occasion that one of the causes of the decline is the market becoming more competitive, as other countries increase efforts to attract visitors. Cheap airline travel induces more Britons to choose to take holidays abroad, making further inroads into our tourist industry.
While recognising that that there are certain things that for practical purposes may best be done by Government—for example, advertising and marketing the attractions of this country overseas to promote inward tourism, the success of which has been commented on today—I believe that there would be enormous benefits for the industry in removing some or all of the government-created impediments to tourism. Her Majesty's Government should look at what can be done to further this.
For example, as has been mentioned today, the cost of a visa to visit the United Kingdom is £80. For £20, you can visit 12 European countries. I am told that in Russia, China and India applications for visas must be in English. Given the number of languages available when one applies for state benefits, it would surely be an easy exercise to provide visa forms in local languages. A simple action such as this does not cost anything but can make a big difference to potential visitors’ perception of the welcome that they will receive in this country.
When tourists, both from abroad and within this country, make their holiday plans, the first thing that they look at, and the deciding factor in the great majority of cases, is the cost of travel and accommodation. Her Majesty's Government should look at whether steps can be taken to influence people at this crucial stage of the decision-making process to plan their holidays in Great Britain.
Another matter that Her Majesty’s Government might consider is taking a better and longer look at promoting more consultation and co-ordination between different government departments. Little consideration seems to be given to the knock-on effect on our fifth largest industry—I heard it stated earlier today that it is our third largest industry, but I have also read that it is our sixth largest industry: whichever it may be, it is big—of the continuing stream of regulations that this Government are so fond of imposing. For small, and even large, providers of facilities for tourists the full focus should be on ensuring their visitors’ enjoyment. Several noble Lords, including the noble Earls, Lord Glasgow and Lord Sandwich, and the noble Viscount, Lord Montgomery of Alamein, alluded to this. Those providers should be looking after their visitors, rather than filling in forms to assist in promoting politically correct agendas.
For all the fuss made about cool Britannia and being modem, the anchor for our tourism, the main attraction, is, as my noble friend Lord Caithness pointed out, our superb and unrivalled heritage which gives Great Britain a huge advantage over other destinations. Any Government wishing to assist tourism should surely do their best to maintain to the highest standards that great lure for visitors to come to this country. It is regrettable that government support for English Heritage over the past 10 years has been reduced in real terms by £110 million at a time when the costs that English Heritage incurs, because of its extensive use of highly skilled labour, have increased way above the rate of inflation.
Sporting tourism is another important aspect of the industry but the tax treatment of overseas sportsmen performing in this country is a serious deterrent to top-class athletes coming here. It is the sporting stars who bring the crowds and generate the resulting revenues. In spite of the tax disadvantage, major sporting events such as Wimbledon continue to attract the great players; but for how long will they manage to do this when, even if the players win substantial prize money, they can still be out of pocket after Her Majesty’s Revenue and Customs has stuck its hands in their pockets?
The big names avoid the smaller events, which are the ones which need the star attractions to bring in the crowds. If Tiger Woods plays in a golf tournament the attendance multiplies, but the stars will not wish to come here if the penalty is ending up with a tax bill in excess of any prize money or winnings. A significant impediment to England attracting major football competitions is the reluctance of those organising the events to push players into being sucked into a tax net which can then attack their world-wide earnings.
With the present rate of exchange for sterling there is, as has already been pointed out by noble Lords, a superb opportunity for British tourism; but it may not always be thus. While we all enjoy contemplating the enormous advantage that has been given to Great Britain of not being in the single currency, I urge the Minister to use what, in spite of the reductions, still remains a substantial budget to maintain the competitive edge which the exchange rate has provided by addressing some of the impediments to the initial decision to take a holiday in Great Britain.
The Parliamentary Under-Secretary of State for Communications, Technology and Broadcasting (Lord Carter of Barnes): My Lords, since I became a Minister I have had the pleasure of taking part in two House of Lords debates on tourism, and the significance of the sector has been made very clear to me. The contributions made today and back in January have all been eloquent and absorbing. As I think we all know, the world continues to change at a sometimes rather alarming and challenging pace. I would like to join other noble Lords in congratulating my noble friend Lord Pendry on securing this important debate. I know from my day job as a sectoral Minister how challenging it can be to ensure that a sector’s perspective is heard across government. Debates such as this one help to air the issues in a very constructive fashion.
Britain, like many countries, continues to battle the effects of the economic downturn, but the outbreak of swine flu and the associated media coverage reminds us all that the economy is not the only factor influencing the prospects for tourism in 2009 and beyond. 2009 is a very important year as the effects of the downturn become fully evident and today’s debate is a timely reminder that tourism—whether it is the third, fourth, fifth or sixth largest industry—is integral to the British economy and its recovery.
My noble friend highlighted that this year marks the 40th anniversary of the Development of Tourism Act 1969, and he rightly took the opportunity to underscore Anthony Crosland’s contribution in that legislation. This debate therefore presents an ideal opportunity to take stock of the developments in tourism over the past four decades and to see what lessons we have learnt and what more we need to do.
I confess to being slightly chastised by the noble Lord, Lord Lee, on my flippancy in responding to the previous debate. But in listening to some of the contributions today I was reminded of Bill Bryson’s description of national character. He certainly knows more about travel and tourism than I do. When asked what the difference was between the United States and the United Kingdom, he said: “When you wander round the United States and ask people how they’re doing, they say, ‘Pretty good, thanks’. When you wander round the United Kingdom and ask people how they’re doing, they say, ‘Mustn’t grumble’”. The consensus view in today’s contributions has been that the Government have done little or nothing for this industry; that it is in a woeful position; that there is a crisis of marketing investment; and that something must be done to avoid a clear and present crisis. There were some exceptions to that consensus, such as the speech of my noble friend Lord Rosser. I was also reassured by the knowledgeable contribution from the noble Baroness, Lady Valentine, about the resilience of the tourism industry and the commitment and performance from London.
A number of noble Lords have outlined the contribution that tourism and hospitality make to the national economy: around 8 to 9 per cent of our GDP and 2.7 million direct and indirect jobs, some 8.2 per cent of the workforce. Those are remarkable figures. We have a world-class tourism product and that quality is now available, as many noble Lords have highlighted, for significantly less given the value—or competitiveness, depending on your perspective—of the pound abroad. As a number of noble Lords have highlighted, that product includes breathtaking scenery; our dramatic coastline; increasingly outstanding food and drink; our incomparable history and heritage; our museums; and our hosting of major sporting events, both currently and over the forthcoming decade, such as the Olympics and the Champions League.
It is right to say, as the noble Lord opposite did, that the tourism customer is growing ever more sophisticated and has ever more choices. The competition from overseas—notwithstanding the current position of sterling—and cheaper travel have developed a demand for a higher quality product and greater value for money. VisitBritain is responsible for promoting Britain as a world-class tourist destination. It has representatives in over 36 countries around the world and has recently expanded into India and China and throughout eastern Europe and south-east Asia.
Provisional figures for 2008 indicate that overseas residents made 32 million visits to the United Kingdom, down by just 2 per cent on 2007. But they spent £16.5 billion, which, before adjusting for inflation, is 3 per cent up on 2007. As a number of noble Lords have commented, when times are good, tourism is easy to ignore, and we sometimes take our successes in tourism for granted. Times are now immensely challenging for the industry, and despite the weakness of the pound, the latest figures that I have seen, from March this year, show that the number of visitors from the United States, the euro zone countries and the rest of world was decreasing comparatively, therefore increasing the importance of the domestic market.
However, as my noble friend Lord Davies has highlighted, there are encouraging signs for the summer of 2009 that people will choose to holiday at home. Anecdotal evidence suggests that, for example, the holiday park sector is going to do well this year following indications of good visitor numbers in the attractions sector over the Easter period. So, all is not doom and gloom. The standard of our hotels and bed-and-breakfasts continues to improve apace, and the wealth of attractions that the British brand offers is second to none, but there are challenges. I know that many tourism businesses across the United Kingdom are doing outstanding work trying to compete in and combat the economic downturn. The Government understand that that is not easy, particularly as we face up to what will be a difficult fiscal period.
How should we combat those challenges and what is the role of the Government? In the first instance, effective management of Britain's tourism industry resources will help us emerge from the downturn in good shape, ready to take advantage of the recovery when it comes. As discussed during our previous debate and again today—I was pleased to hear the noble Earl, Lord Glasgow, endorse this—following the Comprehensive Spending Review, the DCMS asked VisitBritain to carry out a strategic review of British tourism. Strategic reviews often come in for a bad name, but I share the noble Earl’s view that that was a quality piece of work to ensure better co-ordination of funding, strategy and implementation of our approach to tourism as a sectoral industry and to try to identify ways of improving efficiency and effectiveness where the public sector touches the private sector for tourism.
That was published by VisitBritain on 11 February and set out recommendations aimed at better co-ordination of the significant public investments made centrally, regionally and locally. The review proposals also involve the fundamental restructuring of VisitBritain and developing the role of Visit England, which will market England in a more focused partnership at national, local and regional levels. In welcoming the review's findings, the Government emphasise their determination to forge a closer partnership with the tourism industry to minimise the impact of the downturn and to try to ensure that we are better positioned to exploit the opportunities offered by the recovery, when it comes. I am glad that the review proposed many things that the Government are already doing, and a number of things that we have subsequently implemented.
If I am allowed two observations, there seems to be an excessive, if understandable, focus on the unwillingness to move on the financing of marketing. As I said, in my day job, I am the sectoral Minister for broadcasting and the media. This will not come as a surprise to any noble Lord, but I can tell the House that for much of the past year, I have spent my life in meetings with media companies who tell me that today, advertising and marketing prices are cheaper than they were in 1992, and that the advertising and media market is currently suffering between a 30 per cent and a 45 per cent reduction, depending on which form of media you are buying. The value that you can extract from the marketing pound has never been more attractive, if you are a buyer, and less attractive, if you are a seller.
On the specific question asked by the noble Earl about the digital divide—a subject about which he is right to observe that I have some knowledge and feel passionate—the Government have already committed to delivering a universal broadband service for the entire country, have already identified a universal service fund, and seek to deliver that by 2012, making us the leading country in the world in delivery of universal access to broadband at average-speed rates of 2 megabytes and above, which are attractive both to the domestic user and to the small to medium-sized enterprise looking to offer home or domestic-based connectivity and promotional opportunities.
To turn to the things that we are doing, the Tourism Advisory Council has recently been formed as part of the Government's commitment to support the UK's fifth largest industry. The noble Lord, Lord Lee, was right to say that the tourism summit in Liverpool was dripping with Ministers—although, I must confess, not me. The Prime Minister made it clear at the summit that he was extremely keen for a strengthened partnership between the Government and the tourism industry. That is why we set that group up. It will meet three to four times a year. I will be delighted to provide the noble Lord in writing with details of the forthcoming dates of those meetings.
The remit and purpose of the advisory council is to ensure that, during these times, we can receive timely and accurate information directly from leading tourism businesses so that we can identify areas that need action and highlight ways to move forward. As the noble Lord and others will know, the council is deliberately formed of a group of high-level industry executives, including members of organisations such as Virgin Atlantic, Eurostar, Travelodge and Center Parcs. The group is designed to provide direct and regular input into government and to identify how Ministers can support the sector.
The Tourism Advisory Council is only one of a number of regular groups giving the industry access to government. Other regular meetings include meeting the Tourism Alliance, the Tourism 2012 ministerial advisory group, the skills implementation group and the tourism leads at each of the RDAs.
Another recommendation from the tourism summit was the creation of an interdepartmental group of Ministers. I defer to the noble Lord’s comments on the challenges of interdepartmental ministerial groups being delivery vehicles rather than merely discussion events. This group first met at the beginning of May—so, relatively recently—and will meet four times a year. He is correct to identify that this group will be chaired by the Minister for Tourism in another place. I hope that my honourable friend will not be offended if I describe her as a forceful presence in the chair. So, notwithstanding her Whitehall ministerial status, I do not believe that her occupancy of the chair is a limit on that interdepartmental group’s ability to deliver. As a number of noble Lords have highlighted, tourism is often dependent on a range of government departments not making negative decisions as well as making positive ones.
The future success of Visit England will largely depend on its capability to form and maintain partnerships with regional development agencies and local authorities.
The evolution of Partners for England is vital to that end. The Government welcome the group’s progress so far and its future aims. We are confident that these arrangements will make for strengthened leadership and better representation of private and public sector stakeholders and provide a more robust and more responsive vehicle to grow and sustain the industry in the long term.
The noble Viscount, Lord Montgomery, made a point about marketing England domestically. Despite a tough Comprehensive Spending Review round, the Government are committed to providing £130 million between 2008 and 2012 for marketing Britain overseas and England to the British. In addition, between £3.3 million and £3.5 million is provided annually to the regional development agencies for tourism support.
Again, as my noble friend Lord Davies highlighted, this industry has a vertical contribution to make to jobs. For that reason, the Government have also made a significant investment in skills in relation to the tourism industry. Last year, we announced that we would focus an additional £210 million on the sector through the Train to Gain scheme and through learners who will be going through programmes approved by the National Skills Academy for Hospitality. In addition to this, the Government have committed £350 million to help small businesses to get the training that they need to get through the economic downturn. This is an investment across the country.
London, as the noble Baroness highlighted, is central to the visitor economy as a destination in its own right and, indeed, as a gateway route to the rest of the country. I recognise that there has been concern about the DCMS’s decision to discontinue its bilateral funding agreement with the GLA. This is, for the record, no reflection on the work of Visit London or the LDA, which we respect and value greatly. It is a matter of simple financial constraint and the requirement to make difficult choices, which our London partners have also encountered. We informed the then London mayor, Ken Livingstone, of this possibility last March, in order to give the GLA at least a glide path of more than a year to prepare for this eventuality.
We are not disinvesting from tourism. We will be reinvesting this money to support the recommendations of the British tourism framework review and to maximise potential national benefits. Indeed, as I said in the last debate—as I recall, I was asked to clarify the source of these funds—VisitBritain and VisitEngland are currently running a major £6.5 million marketing campaign focusing on England and Britain as high-quality, value-for-money destinations, which will naturally benefit London.
In response to the question asked by the noble Earl, Lord Glasgow, about cuts and whether we would revisit that issue, I have to say no. Following the Comprehensive Spending Review in 2007, the DCMS was required to engage with its sponsored bodies and to seek to achieve value-for-money savings. Our funding decisions are final. The department then commissioned a review of public sector support for tourism, which we have discussed, and we agreed with VisitBritain that, pending the outcome of the strategic review, we would have a one-year provisional funding agreement for 2008-09. As I say, £350 million a year is being invested in tourism at national, regional and local levels. That is a significant commitment.
In line with the Prime Minister’s vision, which was outlined in the summit on improved partnership that was referred to, central government has increased its profile in relation to tourism in recent months. DCMS Ministers and tourism industry representatives attended a number of events during British Tourism Week, which ran from 23 to 29 March, both in London and the regions, to highlight the importance of tourism to the United Kingdom.
The DCMS has continued to pursue its advocacy role across government and it is fair to say that this is producing tangible results for the industry, including some more tourism-friendly strategic planning advice for local authorities—although perhaps not as much as the noble Earl would wish—as a result of intensive DCMS-led discussions with the DCLG, the Tourism Alliance and other organisations over 2004. I have another day job as the Minister for Regulation and will respond in writing to the noble Earl on his question about historic houses and the appropriateness of the religious application of regulation, as I have some sympathy with his view.
The noble Earl, Lord Caithness, asked about sustainability. One issue that is increasingly significant as we look to the future is the importance of a sustainable approach to tourism. Sustainability has never been so important as we face up to the impact of climate change. We all know that we have a clear and present responsibility to make sure that we act in an environmentally friendly way; tourism, given its size, can be no exception. Many tourism businesses across the UK are already doing outstanding work under the green agenda, but more need to do so and soon if we are to protect and value the world of the future. This will not be easy, particularly as we face up to difficult economic times. However, by adopting a more environmentally friendly approach to the management of resources, Britain’s tourism industry will be able to emerge stronger and more globally as well as domestically competitive.
When the Government published the tourism 2012 strategy, we committed to developing a framework in conjunction with the tourism industry, which we published in March. It sets out six key points. First, we must minimise waste. Secondly, we must address the impact of tourism transport. Most holiday trips, as noble Lords know, are by car and plane, so we must address the attractiveness of convenience and cost by advertising special offers and making people aware of alternative forms of transportation. Thirdly, we must ensure quality and making holidays accessible to all. Fourthly, we need to improve the quality of tourism jobs, as the noble Lord, Lord Rosser, said. Fifthly, we need to improve the perceptions of the tourism industry and make it more attractive to new and more diverse, talented and skilled people so that they view careers in the industry as long term rather than just temporary. Sixthly, a healthy and sustainable tourism industry can help to maintain and enhance community prosperity and quality of life, so we must try to reduce the seasonality of demand by increasing occupancy in the shoulder seasons and encouraging off-season activities and experiences. A version of this framework document, Sustainable Tourism in England: A Framework for Action, has been sent to the House Library.
Our national tourism strategy will therefore continue to focus on delivering a first-class welcome for our domestic and international visitors, providing high-quality product and accommodation for people to enjoy and improving the skills of the workforce, particularly in customer service and management. However, we cannot make headway in delivering these aims and a real and meaningful legacy from the 2012 Olympic Games and Paralympic Games without real commitment from the whole country and every region and without increasingly effective co-ordination with the RDAs and local authorities in particular.
There is a real momentum right across central government. These debates are material to improving the importance of tourism in the policy discussions in government and there is an increasing and effective working relationship between the Department of Culture, Media and Sport and the Department for Communities and Local Government. We now have an unprecedented set of conditions and ideas knitting together to show what our sector can deliver to the local economy and to local communities. That is now being made clear in a commercial way as well as in a policy way. The Government intend to maintain a constructive dialogue with the regions, focused, as two of the contributions this afternoon highlighted, on delivery rather than just on discussion.
I sense from the majority of the contributions this afternoon that there is not a unanimous view of the Government’s confidence in and optimism about the future of the visitor economy or about the Government’s programme of commitment. I recognise that, as indeed does my colleague in the other place. I would like to reassure noble Lords that neither in the Department of Culture, Media and Sport nor in government as a whole do we lack either vision or commitment to the importance of powerful industry sectors. The Government recognise that they need to concentrate on positioning the industry for recovery and exploiting future opportunities over the next decade.
There are real issues, some of which have been raised in this afternoon’s debate. There are questions around better co-ordination across government. There are legitimate questions around the application of the planning and regulatory regime to tourism industries. There are undoubtedly questions over how fast we can deploy the improvements in our transportation networks that we know we need to make.
I would say to noble Lords, however, that there has been significant progress. Institutional and organisational co-ordination is better than it has been. I genuinely believe that the overfocus on, verging on obsession with, the marketing budget is out of tune with the times and with the reality of what can be achieved with the money that is on the table and in the budgets of individual organisations. Last but not least, there is the significant capital, operating and marketing investment in the Olympic Games and the associated events. These are real opportunities. As I wander around this country to different centres and significant parts of the countryside, I rarely grumble about the quality of what is on offer.
Lord Pendry: My Lords, this has been a good debate and I would like to thank all those who have made contributions. The noble Earls, Lord Caithness, Lord Glasgow and Lord Sandwich, and the noble Viscount, Lord Montgomery, all made thoughtful speeches. Although I did not agree with everything that they said, they made points that the Government should take up following the summit in Liverpool.
My noble friend Lord Davies of Coity was his usual forceful self, making sure that we all know the benefits of Manchester as a tourism venue. With regard to the comments of my noble friend Lord Rosser, we know that numbers of employees in the industry vary from survey to survey but we cannot ignore the fact that there are a lot of employees. That should be taken very seriously. I enjoyed the contribution of the noble Baroness, Lady Valentine. In her, London has a real champion, as we always hear when she speaks in these debates.
Although I have said that the noble Lord, Lord Lee, was the best Tory Minister that I encountered in my days in the other place, it was a bit rich of him to suggest that, between January and now, the Government should have acted on all those recommendations. I hope that he will reflect on what he said. I thank the noble Lord, Lord Howard, for his contribution and the Minister for his thoughtful response to the debate. I beg leave to withdraw the Motion for Papers.
Motion withdrawn.
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