Lord Lee of Trafford
To ask Her Majesty’s Government what plans they have to maximise tourism potential in the United Kingdom.
Lord Lee of Trafford
My Lords, I am delighted to lead today’s debate on maximising tourism’s potential. I think I am right in saying that it is just over two years since we had a debate on tourism in the House of Lords. It is a particular pleasure for me to see that the debate will be replied to by my noble friend Lord Gardiner of Kimble. I know from private discussions I have had with him just how committed he is to the tourism industry. We wish him well in climbing the greasy pole so that he is able to influence policy to an even greater extent in the future. I also welcome so many colleagues who have a particular interest in tourism.
First, I declare an interest as the chairman of the Association of Leading Visitor Attractions. The association comprises 50 members, all of whom attract more than 1 million visitors a year, and we now have seven members in Scotland. Globally, tourism is probably the world’s largest growth industry, with a huge potential. At present, something like 20% of the residents of the United States, 34% of French residents and 13% of Japanese residents take holidays abroad. In China the comparative figure is only 4.3%, while in Brazil it is 2.7%, and India 1.2%. One can see the huge potential that is to come. In the United Kingdom, tourism is our sixth-largest industry, with a turnover of £134 billion, providing 2.7 million jobs, which represents 9.1% of the workforce. Over a third of all the new jobs created in the past year—180,000—were actually created in tourism. The beauty of the tourism industry in terms of employment is that it is capable of taking in both unskilled and very highly skilled workers.
However, against this international and national backdrop, successive Governments and politicians have repeatedly failed to take tourism seriously. I believe that it is the number one industry in more parliamentary constituencies than any other individual industry. Yet, in the 2010 election, not one word was said about tourism in any of the three major parties’ manifestos. We have the occasional speech supporting tourism by the Prime Minister of the day, and there it ends, with little follow-through. Until the Prime Minister and the Chancellor of the Exchequer really get the message on tourism and drive policy forward as a priority, little is likely to change. We also need much greater co-ordination across government. Too many messages and actions are negative and there are too many restrictive barriers.
Specifically, tourism is not mentioned in the title of the Department for Culture, Media and Sport. Funding for VisitBritain and VisitEngland has been steadily reduced, and there is a threat to reduce it even further. Today, I gather that in a speech made at the British Museum, the Secretary of State queried the economic benefits of the arts. The chairmanship of VisitBritain is seen as a job that takes six days a month. That is quite ridiculous, given the size and scale of our industry. On value added tax, out of 27 EU countries, the United Kingdom is one of only four—and the only major tourism destination—to charge full-rate VAT on accommodation. Independent studies have shown that reducing VAT to 5% would create 80,000 new jobs and generate an additional £2.6 billion for the Treasury.
Ireland has successfully boosted its tourism industry by reducing VAT and abolishing air passenger duty. We had a separate debate on this a few weeks ago. Since 2007, air passenger duty has been increased by 360%, which means that for a Chinese family of four wanting to visit the United Kingdom, the duty would be something like £368. On visas, although there has been a modest improvement, the procedures are still expensive and burdensome, particularly for Chinese visitors. It is hardly surprising that France has been attracting something like six times as many visitors as we have. Moreover, there were the recent comments by the Home Secretary on possible changes with regard to visas for Brazil, which have not been seen to be helpful. I believe that we will have an Oral Question in the House on this matter tomorrow. With regard to airports, despite the urgent need for new runway capacity in the south-east, the Davies commission’s report has been long-grassed until after the next election. The package travel directive puts onerous requirements on small businesses and needs to be substantially amended.
Despite overwhelming arguments that a move to double summer time, allowing greater daylight activity, would significantly boost tourism and, of course, road safety, no Government seem to have the will to take action. Regionally, the demise of the RDAs has seriously reduced funding for destination management organisations, for tourism skills training and, of course, for catalyst pump-priming support for major tourism initiatives and projects. The allocation from the regional growth fund falls well short of being an adequate replacement.
I ask my party, and others advocating a mansion tax, whether they have really thought through the implications. The owners of historical properties, many of whom are already under severe cash pressure regarding repairs and renewals, could be faced with very severe additional annual burdens; for example, with a £5 million historic property, 1% on the value over £2 million would result in a £30,000 a year extra charge. Where is that cash going to come from?
Our visitor economy in the United Kingdom is made up of a cornucopia of riches: our historical heritage, our industrial heritage, our great museums and galleries with their crowd-drawing exhibitions, our beautiful and varied countryside, our resorts, and our creative industries such as our theatres and our music. We also have a worldwide reputation for staging great ceremonial events such as the Olympics and the Diamond Jubilee last year, the royal wedding and, more recently, the funeral of Lady Thatcher. All these have given a massive boost to London. Specifically, the royal wedding at Westminster Abbey increased visitor numbers there sixfold. It is still benefiting from that exposure, and I would expect St Paul’s also to have a considerable boost to its visitor figures. Yes, we have a successful tourism industry, but we could do so much better.
Baroness Bottomley of Nettlestone
I congratulate the noble Lord on securing this debate, and endorse many of his points. I know the work he did as Minister for Tourism.
I had two specific aims when I was Secretary of State, the first being that I should sign all the letters concerning tourism, which is normally left to a junior Minister. If the Secretary of State signs the letter in interministerial correspondence, all the other Secretaries of State have to sign the letter. I thought that was a wonderful “Yes Minister” device to force Cabinet-level Ministers to understand the importance of tourism and hospitality and to not let them delegate it to a junior Minister. Secondly, my small and simple target was to speak at the CBI conference on the importance of tourism, hospitality and leisure, because it is a genuine sunrise industry and a great job creator. I decided that being on the CBI agenda would get tourism and hospitality where they needed to be. I am delighted to say that I secured that small target as well.
My small specific target today—I declare my interest as chancellor of the University of Hull and as the about to be appointed sheriff for the City of Kingston upon Hull—is to secure for that wonderful, creative and vibrant city the award of City of Culture 2017.
I warmly congratulate the Secretary of State on her speech today, which I think the noble Lord did not entirely understand. She spoke about understanding the economic potential which the arts and culture offer, both directly and indirectly. They are not an add-on, they are fundamental to our success as a nation. Culture does not simply have a role to play in bringing about a return to growth, it should be central to these efforts. Culture, as part of tourism and hospitality, is evidently critical. I was delighted she made the speech at the British Museum, which was founded by a lottery and jeered at by someone from my former constituency in Farnham, William Cobbett, who asked, “What manner of interest is that to the common man?”. All these centuries later, we see that the BM has survived extremely well.
Hull has always been a hugely creative city. It is the birthplace of Andrew Marvell and William Wilberforce. More recently, Andrew Motion and Philip Larkin taught at the university. Roger McGough, Anthony Minghella and Jenni Murray were all at the university. Tom Courtenay and Maureen Lipman were brought up there. There are wonderful local centres such as the Hull Truck Theatre; the dynamic, creative and modern Ferens Art Gallery; The Deep, which, I am pleased to say, was lottery-funded during my time on the Millennium Commission, and is a wonderful environmental and conservation charity; the Guildhall; and Trinity House, which houses the largest and most splendid silver collection across Europe.
All in all, it is a vibrant city that faces on to the rest of the world. It has always welcomed people from around the world, and harnessed its creativity and excellence as a spur to tourism. I only hope it becomes, like Liverpool and Londonderry, the next City of Culture in 2017.
Baroness Liddell of Coatdyke
My Lords, I, too, congratulate the noble Lord, Lord Lee, on securing this debate. We all know of his considerable expertise in tourism and he never misses an opportunity to raise the issue. I am delighted to support him and I agreed with almost everything he said; I will reserve my judgement on double summer time, given where I come from.
I also welcome the noble Lord, Lord Gardiner, because of his background in rural affairs. The key thing to remember about tourism is that it is the economic instrument that can reach parts of the country that other instruments do not. That is where my interest in tourism comes from; it is the regeneration of remote communities. I declare an interest as a non-executive director of VisitBritain.
I, too, have been listening to what the Secretary of State had to say today about the economic impact of the arts. She said one thing that almost had me cheering: she wants “participants not bystanders”. If ever there was a compliment to tourism, it is that. I do not make any partisan point in this because, frankly, I am as critical of the Government that I was a member of as I am of this and previous Governments for their failure to put tourism at the heart of the economic debate.
British tourism has been a partner in economic development, and £24 million of partnership funding from VisitBritain has gone to the commercial sector. As a result of the activities of VisitBritain over a four-year period, £100 million has gone into a marketing programme and that has directly contributed £900 million to the UK tourism industry. That is a stunning return on investment.
If we look at the impact of tourism on jobs and growth in the economy, it contributes £115 billion to the UK’s GDP and employs 2.6 million people. Internationally, tourism employment outstrips car and chemical manufacturing in terms of the number of people employed. It is seen in other countries as a major instrument of growth, but we consign it to the cuddly fringes of government. This is an industry that can bring serious economic growth; 9% of the UK economy comes from tourism. One job in every three created between 2009 and 2011 was in tourism. Another key figure is that 44% of those employed in tourism are under the age of 30.
We all want economic growth in this country; we want it outside the south-east of England; we want it in Cornwall, Devon, the north of Scotland, the Welsh valleys and everywhere else. Tourism can bring that, but it will never have the full impact that it could have if it is consigned to the outer edges of government policy. We laud UKTI in our economic debates; we should be lauding VisitBritain, British tourism and the many hundreds of thousands of people who make it one of our great success stories.
Baroness Valentine
I could not agree more. First, I declare that I am chief executive of London First, a not-for-profit business membership organisation. I, too, am grateful to the noble Lord, Lord Lee, for calling this debate. If I may, I would like to turn his Motion on its head and suggest some things that the Government could stop doing. I will focus on three disincentives for tourists: first, barriers to entry; secondly, the quality of the welcome; and thirdly, the cost of departure.
Taking entry first, the World Economic Forum’s latest competitiveness rankings show that the UK has fallen from 22nd to 46th in terms of its visa requirements. China’s burgeoning middle class spends around three times as much as other tourists. However, the requirement to apply for two European visas—one for the 26 Schengen countries and one for Britain—is a turn-off. Four out of five do not come to the UK, representing an opportunity cost of more than £1 billion annually. The Government are working hard to improve the process, including investigating partnering with other European countries to provide a one-stop shop for visas, whereby, even though the screening processes are different, documents and information can be provided just once. Whatever the solution, we need to be an integral part of any European tour rather than an optional add-on.
Turning to the welcome that tourists receive, in the past we have seen long queues clogging up border control. Here, too, I have been encouraged by progress at the UK Border Force. The UKBF should be given the necessary resource, including the ability to get more and better data quickly, combined with a flexible operating culture to hit tough queue targets, at the same time as keeping out undesirables.
Finally, on tax, in the rankings to which I referred earlier, the UK comes last for airport charges, largely due to air passenger duty. If our goal is to attract visitors, it seems strange to charge them so heavily for leaving.
I return to the official topic of this debate. There are things that the Government can do or continue to do. The GREAT campaign was a good first step, but we must regard marketing the UK as a positive investment rather than an unwelcome expense. Are we really spending enough to maximise the Olympic legacy? Tourism is not a “nice to have”. It is the UK’s third largest export earner. More than that, tourist activity is often the first step to future economic activity. Today’s visitors bearing cameras may well be tomorrow’s investors, and we should therefore do all we can to ensure that they go home with plenty of pictures of red carpets.
The Earl of Arran
My Lords, I declare an interest, in that the garden at our home in north Devon is open to the public for most of the year.
As we all know, tourism is one of the fastest growing industries in the world. At the beginning of the year, the Prime Minister launched a major initiative through the VisitBritain partnership: a new four-year £100 million marketing budget to deliver 4 million new visitors, generate an extra £2 billion in visitor spending and create 50,000 vitally needed jobs. It is a start. The south-west smiled; at last there was some recognition of the need to invest in one of its most important wealth-generating sectors—70,000 jobs in Devon and Somerset and more than 25% of Cornwall’s total GDP.
South-west tourism has moved a very long way from the traditional bucket-and-spade image of the 1970s and 1980s. On a wet day, to match a genuine world-class environment, many of the covered attractions are also world class, including the Eden Project, the National Marine Aquarium and dedicated local family businesses such as those in my area of north Devon. These include the Milky Way and the BIG Sheep, both of which were created through diversification from long-standing traditional livestock farms.
Far from relying upon tourists arriving between Easter and the beginning of September, the south-west has been moving towards an all-year season. This has been based upon widening the scope of the offering, coupled with investment in quality and skills. Marketing has been adapted to cater for “just in time” bookings, and branding has been based on traditional values such as loyalty. Repeat visitors are easier to attract than new.
Examples of how this strategy has worked can be seen in two sectors. The first is food and drink. The vital link between tourism and locally sourced, safe products has proved a dynamic area for growth. The south-west is now every foodie’s dream, with the UK’s most innovative cuisine, which is locally sourced, ethically produced and, importantly, prepared by fantastic home-grown talent. A clutch of Michelin-starred chefs have recognised this powerful market, with Jamie Oliver, Gary Rhodes, Rick Stein, Michael Caines, Hugh Fearnley-Whittingstall and many others enjoying successful recent openings.
Perhaps the most exciting story, however, is in the growth of speciality tourism. There is no better example of this than what can now be seen in the great spring gardens throughout our region. These already attract more than 30% of all our visitors and this figure is not only rising but can ensure repeat visits both during the year, and year after year. There are in Devon and Cornwall some of the greatest spring gardens in the world. I say “in the world” for their only rivals are in the Himalayas. But we need not go that far; it is a very long way and expensive to get there. Go instead to Devon, to the Royal Horticultural Society garden at Rosemoor. Go to, besides many others, Caerhays on the southern Cornish coast, where there abound acre upon acre of camellias, rhododendrons and magnolias 70ft high. Its splendour, magnificence and the beautiful setting, once seen, are never forgotten. See Naples and die, but perhaps also see Caerhays and die. All these points underpin the fact that it will take more than the recession or bad weather to dampen the spirit of south-west tourism.
Lord Faulkner of Worcester
My Lords, I join others in congratulating the noble Lord, Lord Lee of Trafford, on initiating this debate, and I remind the Committee of my unpaid interests as president of the Heritage Railway Association and as a trustee of the Science Museum Group. Britain’s tourist potential depends on many factors, but principally on attractive destinations, such as those in the south-west that we have just heard about, enjoyable experiences in terms of where to stay and what to do, and ease of access. With more time, I would describe the huge contribution that our museums—the five museums in the Science Museum Group now attract 5 million visitors a year—make to tourism, but I shall concentrate on the part that Britain’s heritage railways play in attracting visitors to Britain.
Railways were Britain’s contribution to the development of the modern world. Their history is rooted in the work of British engineers and entrepreneurs who financed and built railways in so many countries whose citizens are now visiting Britain as tourists. We were not only good at building and exporting railways but we are, today, very good at running heritage railways. There are well over 100 around the United Kingdom, and they are increasingly popular. They do their best to offer an attractive face to their customers and an enjoyable travelling experience. Many provide excellent dining cars on the trains, often offering local produce as a feature. There are even a few boutique hotels around the country where the guests sleep in historic railway carriages, even though the carriages never leave the sidings on which they are permanently stabled.
Heritage railways are still growing. Painstakingly, mile by mile and mainly using volunteer labour, lines are being extended over track beds abandoned long ago by British Railways. Last month, trains on the pioneer standard gauge preserved railway, the Bluebell line, triumphantly steamed back into East Grinstead station some 55 years after the previous train had approached the station from the south for the last time.
Lord Faulkner of Worcester
My Lords, I was just describing to the Committee how heritage railways are being restored in various parts of the country. I mentioned the Bluebell line and pointed out that the North Yorkshire Moors Railway is now bringing thousands of people into the town of Whitby, with the effect of keeping cars out of the North York Moors National Park and providing a new journey experience for people. Plans are also in hand with grant funding to extend the Swanage Railway to connect with the South West Main Line to London at Wareham. Increasingly, heritage railways are being used by tourists for access as well as for an enjoyable day out. These developments are the subject of an inquiry being held by the All-Party Parliamentary Group on Heritage Rail, of which I am vice-chairman, into the social and economic value of heritage railways. I look forward to sending the Minister the group’s report later this year, which will give an indication of how important heritage railways are to the tourist economy.
In conclusion, I would just remind the Minister that these railways are run largely by volunteers and operate commercially, without recourse to government for subsidy. They work with the local community and are themselves major tourist attractions. They ask for little more than to be able to continue to invest and develop, and make the plea of most small and medium-sized enterprises, to be relieved of as much of their administrative and regulatory burden as possible. A little moral encouragement and support would be welcome too, to demonstrate how much this huge voluntary effort is appreciated by those responsible for tourism development.
Lord Roberts of Llandudno
My Lords, at a meeting last week, I was introduced as one of Llandudno’s two “Peers” or “piers”. Either I am all at sea or out to sea, but it is good to be the only speaker here, I think, from an area that has a pier—a seaside resort. I will also say how proud I am to bear the name of this seaside resort, as Roberts of Llandudno.
Certain things have happened, especially in the past few months. The Lauriston Court Hotel on Llandudno’s promenade has been named by thousands of guest reviews on the TripAdvisor site to offer the best service in the world. You have to go to the Galaxy hotels if you wish to contest that standing. The Lauriston Court is rated the sixth-best bargain hotel. I am therefore delighted to have that confirmation of our status, and Llandudno is a wonderful seaside resort. Many other hotels and guesthouses can be recommended highly, and they are attractive both inside and out, but not all of them are. Some things could be so easily remedied. I was in Marble Arch recently and saw the state of the flags flown there. It is better to have no flag at all than one that is dirty and flea-bitten. It reduces the appeal not only of the building but of the country which the flag represents. Please provide a good outward appearance.
Finally, we have an opportunity at a time of youth unemployment through which we could somehow support more jobs for young people. They could gain qualifications, not second-class qualifications, but ones that would give them hope for a career that would be well worth while. This is an opportunity at a time when we have young people eager to take these sorts of jobs.
Lord Bilimoria
My Lords, Britain is a tourism paradise, in spite of our weather. As we have heard, tourism contributes more than £115 billion to the economy, represents 9% of our economy, and supports nearly 3 million jobs. I thank the noble Lord, Lord Lee, for proposing this debate and for making the important point that we do not take tourism seriously enough. It does not get the credit that it is due or the priority that it deserves. We have dropped from sixth to 11th place in the latest WEF travel and tourism report in terms of tourism competitiveness. We are the sixth most visited destination in the world, but we are losing market share.
Yet we have everything. As we have heard from the noble Lord, Lord Lee, we have the Royal Family, museums, music, theatre, London, the countryside, the arts and sport—you name it. However, the Eiffel Tower in Paris is the most photographed building in the world, while the second most photographed is right here—the Houses of Parliament. Why is that? I agree that we need to do something about infrastructure. Can the Minister say when we are going to do something about our airports, perhaps by providing a third runway at Heathrow and probably the estuary airport as well? It is not a question of either/or; we desperately need both.
However, the main reason that Paris gets more visitors than London is visas, as every survey states. The main reason for that is that Europe has the European Union’s Schengen visa and we do not belong to Schengen. Why is that? It is because we want to maintain our own border controls. Is that not a joke? We are incapable of maintaining our border controls. We do not even know how many illegal immigrants there are. The UK Border Agency has just been disbanded because it was not fit for purpose. We still do not have exit checks for people leaving this country. Can the Minister say when we are going to institute exit checks to keep control of our borders? With Schengen, one visa covers 25 countries, while here there is one visa for only the UK and Ireland. The single visa for 25 countries covers 85% of Europe’s population and GDP. We are worried about security and asylum seekers, but illegal immigrants do not hold Schengen visas. They do not have any visas. The Centre for European Policy Studies has written an excellent report on the issue.
We are losing out in this area. Figures on the number of UK visas issued over the past five years have remained stagnant at 2 million, while Schengen visas over the five-year period to 2010 have increased from 8 million to 12 million, an increase of 50%. I do not understand this. The cost of a Schengen visa for 25 countries is cheaper than the price of one of our short-term visas for the UK and Ireland. We are part of the Schengen co-operation on matters of criminality, so why do we not bite the bullet and join the Schengen scheme before it is too late? The iron structure in Paris will then not be the number one most photographed structure in the world; this building will be.
Lord Gordon of Strathblane
My Lords, I join noble Lords in congratulating the noble Lord, Lord Lee, on securing this debate, and I endorse the broad theme that we all feel that tourism should be given a higher priority. Let us take as read the figures which have been given; I want simply to add a gloss or two. First of all, on priority, let us take the example given by the noble Baroness, Lady Bottomley, when she was Secretary of State. It would be useful if every Bill being brought forward by any Government passed a “tourism test” before it could be agreed. Every Government should look at the effect on tourism, our most important industry, before they implement anything, whether that be visa controls or whatever.
The next point I would like to make is about jobs. People tend to forget that jobs in tourism are increasingly becoming high-quality jobs. Chefs are becoming celebrities, while further down the food chain, if that is not too horrible a pun, people in the tourism industry are at least learning to behave well towards others, which surely is a very beneficial outcome. They are also jobs which cannot be replaced abroad or digitised or computerised out of existence. The service industries will always require human beings, so these are jobs for the long term.
Another benefit of tourism which I think is underrated is the benefit to the indigenous population. Let me take a rather extreme example. When I was chairman of the Scottish Tourist Board, I chaired a conference under the auspices of UNESCO in Scotland called “Peace Through Tourism”. One of the speakers was the then David Trimble, who claimed—I am sure that he was exaggerating—that Northern Ireland and Scotland were broadly similar. However, let us give him the benefit of the doubt. He went on to say that the income per capita from tourism in Northern Ireland was one quarter of that of Scotland, and that Northern Ireland’s target of doubling tourism income was not an unreasonable one. Funnily enough, I bumped into him when we were in the Chamber for the vote, and he told me that with the coming of peace, Northern Ireland is well on the way to reaching that target.
Let us look at the effect of the Olympics on Londoners; as a result, they must feel a lot more proud of living in London. It should be hoped that things like the riots that erupted only the previous year are less likely if people feel better about the place they are living in. That is certainly true of my native city of Glasgow. The great thing about promoting Glasgow as a tourist destination is not so much that we have four times the number of four-star beds than we had 15 years ago, but that Glaswegians themselves have started to believe in their own city again. You cannot tell other people that somewhere is a wonderful place without starting to believe it yourself.
I would cite the effect of infrastructure on tourism as well. West End theatres would go bankrupt if we did not have tourism, so Londoners benefit from the fact that the tourist industry subsidises, if you like, their own enjoyment. My son, his wife and my two grandchildren live on the island of Iona, with a total population of around 90 people. However, there is a very good ferry service. Why is that? It is because the island is a tourist destination. The benefits of tourism to indigenous populations are huge.
In conclusion, and bearing in mind that the noble Lord, Lord Tanlaw, is to follow me in a few minutes, I would say this by way of compromise on British Summer Time. The current chairman of VisitScotland has advanced the notion that we should adopt British Summer Time on March 1. I know that there are apprehensions in Scotland about the effect of that, but I feel that if we moved BST forward to that date and saw the universal benefit that would deliver, it would pave the way for the adoption of double summer time throughout the country.
The Earl of Glasgow
My Lords, I would like to make the Committee more aware of how important historic buildings and gardens are to the British tourist industry. It can be shown that Britain’s heritage, specifically its stately homes, castles and designed landscape, is the single most quoted reason for foreign visitors coming to Britain. According to VisitBritain, in 2011, some 9 million foreigners visited one or more of Britain’s historic houses, contributing £6,500 million to the economy. Here I must declare an interest in that I own a grade 1 listed castle and country park in Scotland that attracts 60,000 visitors a year. I am also a member of the Historic Houses Association, whose members are those who still own and live in their historic piles. Although I am transparently an interested party on this subject, I do have practical experience of what I am talking about.
For many years now, the Historic Houses Association has been trying to convince successive Governments of the importance of historic houses and castles to the British economy, how many foreign tourists we attract and how much our presence benefits local hotels, shops and pubs. According to its figures, the total expenditure generated by inbound tourist visits to privately owned historic houses is £1.6 billion per annum. The appropriate Minister for Tourism invariably listens to the HHA’s arguments with great sympathy but ultimately is never prepared to help us.
The Earl of Glasgow
There are no votes in making concessions to people living in grand houses; rather the opposite, we are targeted as people to be milked. Contrary to popular belief, the majority of those living in grand houses are not particularly rich—because they are living in grand houses. HHA members collectively spend £139 million a year to maintain their historic buildings and grounds, and these sums are barely enough to contain the dry rot and stop the wet coming in.
The late Nicholas Ridley, a Minister in the Thatcher Government, grew impatient with historic house owners bellyaching about the cost of maintaining their houses. “If they can’t afford to keep them, why don’t they sell them to people who can?” was the argument.
Baroness Bottomley of Nettlestone
He said the nouveaux riches rather than the anciens pauvres. I was his junior Minister.
The Earl of Glasgow
Oh, did he? I did not know that. I think his sympathy was the same. On the surface, this seems perfectly rational but it ignores the reasons why so many of us carry on, year after year, struggling to hold on to the buildings we have probably inherited and in most cases learnt to love, while continuing to lose money every year. To own such a place is a privilege as well as a burden. Perhaps we feel we owe the struggle to ancestors who were struggling before us.
I think I am right in saying that no stately home in Britain that is open to the public actually makes a trading profit. The ones that are surviving do so only because the owner has other sources of income or can resort to selling a Titian or a Van Dyck every other year to fill the gap. Nearly all the historic buildings in private ownership are now open to the public but the income derived from them only helps defray the cost of keeping the house wind and watertight. On top of that, we must pay VAT on all structural improvements we make to the building, while our rich neighbour can build himself a brand new, comfortable, warm house completely VAT-free.
Now we hear that the Government intend to cap sideways loss relief, which was one of the few forms of tax relief to the beleaguered owners of historic houses. Then, as my noble friend Lord Lee has already said, we have the prospect of a mansion tax some time in the future. In this time of recession, many owners of historic houses are holding on to their homes only by a thread. Already some are having to face reality, forced on them by their banks.
The Earl of Glasgow
I am so sorry, do you want me to finish? In that case, I really have only one more thing to say. They will have to sell up and may have enough money to live a comfortable and worry-free life for ever after, but every time this happens, Britain is a poorer place and its attraction as a tourist destination is diminished. I ask the Government to take the concerns of historic house owners more seriously and consider concessions that will help to ensure their survival. Otherwise, someday soon even the rich ones will run out of Rembrandts to sell.
Lord Tanlaw
My Lords, we all thank the noble Lord, Lord Lee, for giving us the opportunity to speak on this subject. Foreign tourists and UK citizens alike are generally in agreement that it is vital that the pound sterling remains throughout the UK as it is and that the timescales throughout remain synchronised as they are, even though they are the wrong ones. However, the threat of Scottish independence has created some doubts on both these matters. I am often asked which way I will vote on independence. I say to Scottish residents that if you believe in a Scottish pound that is not underwritten by the Bank of England—I do not believe in that—the answer is to vote yes and emigrate with your savings in pounds sterling.
The noble Lord, Lord Lee, mentioned the benefit to the tourist industry in Scotland and England of switching over to single/double summer time, something which some of us have advocated for years. However, if Scotland should gain independence via the referendum and/or further devolution of other aspects of government, may I suggest that the timescale remains an excluded subject, as it is today? At first glance, it may seem quite harmless to have a different timescale in Scotland to that which applies south of the border. It would be similar, some would say, to altering one’s watch when travelling on the Eurostar to Paris. The same could be said of trains travelling from London to Edinburgh with a one hour difference. The Westminster Government are intending to spend very large sums of taxpayers’ money to build a high-speed rail link eventually linking London and Edinburgh, resulting in a much reduced travelling time. However, if an independent Scotland switched to, say, single/double summer time and Westminster stubbornly stuck to the status quo, the trains going north across the border would still take nearly as long as they do today, thus obviating the need for an expensive upgrade of the line.
Conversely, if an independent Scotland chose to remain with the status quo and Westminster went over to single/double summer time, the trains travelling north would appear to have their time reduced by an hour, thus again obviating the need for an expensive upgrade of the line. I have not chosen trains as a facetious example but one in which time change, if it is not carefully adjusted, has an effect on major capital expenditure, which affects all taxpayers. If the Scots, in their enthusiasm for independence, decide to change the timescale—they may be entitled to do that if we adjust the constitution accordingly—there will be secondary effects that will have very severe effects on our economy. Therefore, I ask for that to be taken into consideration.
Lord Stevenson of Balmacara
My Lords, I thank the noble Lord, Lord Lee, for keeping this important issue in our minds and for giving us the chance to repeat the debate that marked my first appearance on the Front Bench. I think that my opposite number also spoke on this subject on probably one of the first occasions that he spoke since he joined the Chamber; so it has memories for us.
This was rather a mixed debate in that we heard lusty praise for local attractions from all a round the Committee, but many of those attractions are outside London. That is a good thing. This is one of the rare times when we have had a debate that has focused on non-metropolitan issues. I am afraid that we did not come up with any policy options, which I think was the purpose of having this debate. Nevertheless, I think we are all agreed that it is important that there is a policy initiative. I have to disagree with my former Minister—the noble Baroness, Lady Bottomley—who I see in her place, as I felt that she rather overstated her praise for her successor but four, I think. When I was researching this subject I was struck by the fact that when the Secretary of State before the current one left office, his parting shot was to call for new county boundary signs, saying that the current signs greeting visitors as they travel round are dull, often boring and do little to entice tourists. Surely we can do better than that. I hope that the noble Lord will give us some idea of the policy options available to him and his colleagues when he replies to the debate.
I do not have time to go through all the various issues that were raised, and a number of them are very important but they are all around the importance of tourism to the UK economy. It is our sixth largest industry, third largest export earner and accounts for about 9.1% of employment. Surely something can be done about it. The fact that it is so joined-up suggests that it is not in its right place in the DCMS. Something more needs to be added on top of that. I am attracted to the idea that came up in another place that, as with architecture, one should have tourism experts or champions in each of the policy departments within which it operates. That is something I would like to see.
Many of the comments today have been about policy issues to do with air passenger duty, visas and their problems, brilliantly exposed by the noble Lord, Lord Bilimoria, and about what the Government might do to try to resolve that. When the noble Lord replies, can he respond to the question of whether his department has raised with the relevant departments in transport and the Home Office the issues that are causing such problems in the tourism area? This is important and, as somebody said, it always gets left to the last. The current Government and the previous Labour Government did not do enough to try to resolve the issues and get the benefits that would come from tourism if they were to be resolved.
Regulation in the industry is said to be difficult and overburdensome. It is possible that that could be picked up on and put further up the agenda. There is, of course, the question of taxation. I was attracted to the figures that were presented, particularly around the reduction of VAT. I know from my recent experience in Ireland, which we visit, that the reduction there in their rate of VAT, particularly in the hospitality industry, has had a huge impact in terms of the activity going on in that area. It must, in some ways, be at least self-financing there—something that we would recommend to the Government, even though I know that the response will be that these are matters for the Chancellor of the Exchequer.
Lord Gardiner of Kimble
My Lords, I congratulate my noble friend Lord Lee of Trafford on securing this debate and acknowledge the wide-ranging and, I may say, formidable expertise. It is very good to see my noble friend Lord Montagu in his place today as a very distinguished former chairman of English Heritage.
The Government recognise that tourism is vitally important for the future of the UK’s economy. The noble Lord, Lord Stevenson of Balmacara, referred to it as the sixth largest industry, but I think it might be the fifth largest, and the third largest export earner. I say to the noble Baroness, Lady Liddell, that it really is central to the Government’s strategy for growth for all the reasons that I hope I can unfold.
Tourism drives investment and, along with the hospitality industry, directly supports over 1.4 million full-time and more than 1 million part-time jobs. The tourism sector provides opportunities for employment, develops valuable skills and offers a real career in the private sector across all the regions. I was pleased that my noble friend Lord Roberts of Llandudno and the noble Lord, Lord Gordon of Strathblane, referred to this. Indeed, tourism may well become our fastest growing sector over the next decade.
The Government’s tourism strategy published in 2011 focuses on delivering a first-class welcome for visitors and providing a high-quality product. The Government want to create the right conditions for tourism to be an engine of growth by removing unnecessary barriers. I was particularly mindful of the comments of the noble Lords, Lord Stevenson of Balmacara and Lord Faulkner of Worcester, on regulation. We are grateful to the Tourism Regulation Taskforce for preparing its recommendations, and DCMS continues to work across Whitehall to deliver changes wherever possible.
Noble Lords have referred to changes in daylight hours, and I am mindful that the noble Lord, Lord Tanlaw, has expressed a certain view. I am also mindful that the noble Baroness, Lady Liddell, referred to Scotland. The point has very much been put to me that we need to try to develop consensus on this matter so that the whole of the United Kingdom feels comfortable about it.
My noble friend Lord Lee and the noble Baroness, Lady Valentine, mentioned air passenger duty. This is a matter, as has already been suggested, for the Treasury. However, we cannot look at this in isolation because we must remember that other countries levy a variety of tourist taxes that this country does not. Furthermore, air passenger duty provided £2.6 billion to the Treasury in 2011-12. We need to very careful and cautious as it would be difficult to forgo this revenue without making cuts in other areas. The matter of VAT, which was also raised, has been examined by the Treasury. I refer to the significant VAT release for cultural attractions and public transport which are not available in different countries.
We have a world-class tourism product. Our towns, villages, cities, coastline and countryside, alongside our heritage, culture and shops, are exceptional. Being a gardener by name and by nature, I was of course delighted that my noble friends Lord Arran and Lord Glasgow referred to the glorious gardens of the west and more generally. We have some wonderful heritage in our historic houses and many other places, as well as our industrial heritage. I was delighted that the noble Lord, Lord Faulkner of Worcester, referred in particular to our railway heritage. I was also mindful of my noble friend Lady Bottomley speaking so powerfully and passionately about the interests of Hull, and I wish that great city well in its quest for the status of City of Culture 2017.
The number of people crossing international borders passed the 1 billion mark for the first time late last year. The tourism market is growing. The US and Europe remain our biggest source of visitors, but we must capitalise on the increasing number of people travelling from new markets. My noble friend Lord Lee and, indeed, the noble Baroness, Lady Valentine, referred to this. I specifically mention China. While we are already seeing a significant increase in the number of visitors from China—an increase of 20% in 2012— we must not underestimate the opportunity. By 2030, China will have 1.4 billion affluent consumers, which is a number greater than America and western Europe combined. Tourism must continue to adapt to attract and retain these important markets, and we must recognise that the Government will play their part. I am very mindful also of the point referred to by the noble Lord, Lord Bilimoria. We have introduced specific improvements for Chinese and Indian visas, which came into effect at the beginning of this month. It has been reported on Chinese television that 94% of Chinese visitors who apply for a visa are now successful, while 96% of applicants say that they are satisfied with the service they receive. We are also improving our aviation connectivity with China. For example, the UK has a new route to Chengdu. Improvements to our visa regime mean that targets to deliver 90% of applications online by December were exceeded, and at present over 90% of applications are online. We are also looking at Brazil, Russia, India and other emerging markets.
Through VisitBritain, the Government are investing £50 million in a £100 million four-year marketing campaign. I want particularly to acknowledge the work of VisitBritain and I am delighted also—
Lord Bilimoria
The noble Lord mentioned that 90% of visa applications from China and India are now being processed, but what about all those who do not even apply because we are not in the Schengen system? We are missing out on all of them. That is the point I was making.
Lord Gardiner of Kimble
I understand, but I am very short of time and I do not think I dare take any more interventions or I will not complete what I need to say.
I want to refer to the work of the noble Baroness, Lady Liddell, as a non-executive board member of VisitBritain. In addition, tourism also benefits from the GREAT campaign, which was given a £30 million boost for 2013-14. It targets not only our highest value inward investment destinations such as the USA and Brazil, but in 2013 it will focus on China. By 2015, all these investments aim to deliver an additional 4.6 million visitors and an additional £2.3 billion visitor spend, along with the creation of almost 60,000 new job opportunities. Recent figures show that we are on track to meet these targets. To date, direct government investment in tourism campaigns has totalled just over £70 million. In the first year alone, VisitBritain’s campaign has delivered £503 million in incremental spend for the financial year 2011-12 against a target of £373 million.
While London is an important gateway to the country, we market all the wonderful destinations across the UK. England, Scotland, Wales and Northern Ireland are all represented on the VisitBritain board, and the GREAT campaign provides the overarching framework for the promotion of the whole of the UK. I am mindful of the views expressed by the noble Lord, Lord Gordon of Strathblane, on Scotland’s continuing potential.
Last year, we used the Olympic Games to generate worldwide coverage of Britain’s attractions. This strategy resulted in 14,000 positive print and broadcast stories in the world’s media during the first six months of 2012, the equivalent of over £1.5 billion in advertising. We believe that these measures will offer real benefits to the sector. VisitBritain projects that the industry will achieve 33% growth in the number of international visits by 2020, up from 30 million to 40 million a year.
Domestic tourism is also a hugely important market, worth some 80% of tourism receipts. It has seen a significant increase, with 5.8% more being spent on domestic holidays in Britain last year. VisitEngland’s £25 million marketing campaign is expected to deliver an additional £500 million in consumer spending between 2011 and 2015. Recent figures show that this is working: in the eight-month period from early March to the end of October last year, VisitEngland activity generated incremental spend of almost £300 million. Furthermore, 56% of Britons plan to take a holiday or break at home over the next year.
VisitEngland has also received nearly £20 million from BIS and the skills regional growth fund for its Growing Tourism Locally programme. This will lead to the creation of about 9,100 indirect job opportunities. VisitEngland is also working with local tourism bodies and businesses to develop strong private sector leadership and better links with local enterprise partnerships; 150 destination management organisations have been created so far. The Government are also working with People 1st, the tourism sector skills council, to give people looking for work the skills to find it and to improve capacity and productivity.
Tourism is central to our plans for growth. The Government and the industry are working together and this is bearing fruit. February 2013 saw a 14% increase in the number of visits over the previous year, the highest increase since 2008. Recent findings from the Anholt-GfK Roper Nation Brands Index saw us move three places from 12th to ninth in terms of international perceptions of the UK welcome, which I particularly hope will be welcome to the noble Baroness, Lady Valentine. However, we must do more. The tourism industry is highly competitive and we cannot afford to be complacent.
Tourism is a top priority for the Government. We have a great country with world-class tourism to offer and we must continue to market it effectively. The Culture Secretary and the Minister of State for Sport and Tourism are working with colleagues in the Home Office, BIS, the FCO and across government, as well as with committed private sector partners, to ensure that we capitalise on our potential, about which my noble friend Lord Lee spoke powerfully. We may not be able to fix the weather but we do have the opportunity to create a positive environment for tourism to prosper.