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Nigel Huddleston (Mid Worcestershire) (Con)
I beg to move,
That this House has considered the potential effect of the UK leaving the EU on tourism.
It is a pleasure to serve under your chairmanship, Mr Howarth, and I am grateful for the opportunity to introduce this debate today. I thank all those individuals and bodies who have sent information relating to the debate to me and others.
Tourism is the UK’s fourth largest industry and our fifth biggest export earner. It contributes £127 billion to the UK economy and sustains more than 3 million jobs—about 10% of the workforce. It is growing fast. The industry incorporates more than 200,000 small and medium-sized enterprises and more than a quarter of all new jobs created since 2010 have been in the hospitality and tourism space. Yet the contribution of the tourism industry is not always reflected in the attention it receives in this place.
It is important to differentiate three key sectors when discussing the industry: domestic, which is Brits holidaying in Britain; inbound, which is overseas visitors coming to Britain; and outbound, which is Brits travelling overseas. There is also aviation, which traverses all three sectors. The three sectors are impacted by Brexit in different ways by labour market implications, regulations and, in particular, the recent weakness of the pound. It may be argued that, overall, the implications of Brexit for the domestic and inbound tourism market are generally good, while they are generally bad for the outbound and aviation sectors—but it is not quite as simple as that.
I turn first to the good news, on the inbound sector. Last year, a record 36.1 million overseas visitors came to the UK. They spent a record £22.1 billion. The 2016 figures show a continuation of that trend, with 21.1 million overseas visitors between January and July, which is 2% up on last year. Visitors from Europe play a key role in our inbound travel industry. More than 60% of overseas holiday visitors and more than 70% of business visitors to the UK were from the EU, including 0.9 million from Italy, 1.4 million from Germany and 1.9 million from France. Clearly, any additional burdens or restrictions on travel to the UK from Europe will have an immediate and negative impact on visitor numbers. Visa-free access from Europe for short leisure and business trips is certainly the desired long-term aim from a tourism perspective. One of the plus points of Brexit and the weak pound is that it makes visits to the UK comparatively more affordable, yet even with the weaker pound the UK remains a very expensive place to visit by global standards and we continue to lose market share of the global tourism market.
Caroline Lucas (Brighton, Pavilion) (Green)
I congratulate the hon. Gentleman on securing this important debate. In the tourism industry in Brighton, people are deeply concerned about leaving the EU. In terms of their businesses, does he agree that it makes even more sense now for the Government to commit to cutting VAT on tourism services in order to create more of a level playing field? So many of our European competitors have much lower VAT on their tourism businesses. Now is the time for the UK to commit to the same.
Nigel Huddleston
I agree that that is definitely worthy of consideration, as are alternatives such as looking at the VAT threshold. There are various campaigns along those lines and I will come on to that subject later.
Our decision to leave the EU was a shock to many of our friends in Europe and it could be misinterpreted as meaning we are less welcoming of foreigners. Nothing could be further from the truth and we must continue to show that we are a welcoming country. Research from VisitBritain has shown that we can be very effective at marketing our country overseas and the recent, highly successful GREAT campaign had an incredible return on investment.
Mr Alan Mak (Havant) (Con)
I congratulate my hon. Friend on securing the debate. He is a strong voice for tourism in his own constituency and in this House. During the summer, I visited Hong Kong to promote Havant-based businesses. I met the British consul general, who is charged with deploying the GREAT campaign in that region. Will my hon. Friend join me in urging the Minister to continue the deployment of that campaign to promote Britain as a visitor attraction?
Nigel Huddleston
I could not agree more. The return on investment for the campaign was £23 for every £1 spent, which is compelling. There is a good argument for increasing spending on VisitBritain, the GREAT campaign and also on VisitEngland. The Government’s introduction last year of the Discover England fund—a £40 million, three-year programme that successfully attracted a large number of high-quality bids—was also welcome, and we should consider expanding that.
The UK tourism sector is highly dependent on overseas workers, not least in London, where 70% of those working in the hospitality sector are EU migrants. Those employees actively contribute to the UK economy and provide a high-quality experience to our visitors. The Government need to provide reassurances to those people that they are welcome and valued, and that it is the Government’s intention that their right to stay will be unaffected by the referendum decision.
On the domestic tourism market, in 2015, domestic visitors spent more in Britain than ever before. Some £19.6 billion was spent by British residents on overnight trips in England alone, and more was spent in Scotland, Wales and Northern Ireland—I must make sure I get them all in. The number of domestic trips exceeded 100 million, which is 11% higher than in 2014. I am proud to say that my own region, the west midlands, saw the biggest growth, with overnight trips up 22% and spending up 26%. A weak pound will make a UK staycation an even more attractive proposition, but that may be temporary. As the hon. Member for Brighton, Pavilion (Caroline Lucas) suggested, cutting VAT on tourism and other options should be carefully considered to sustain that growth in the long term.
I am sure many colleagues will extol the virtues of their own patches in their speeches. I will turn my attention to the outbound and aviation sectors, where the outlook is perhaps a little more challenging.
Outbound tourism is an often overlooked part of our tourism economy, but it employs more than 215,000 people in businesses, including tour operators such as Thomas Cook and TUI, travel agents and airlines such as Easyjet and Monarch. UK residents made an astonishing 65.7 million visits abroad in 2015, 9.5% more than in 2014. Again, our links with the European Union are very strong. Some 76% of holidays abroad and 68% of business trips were to the EU. In 2015, 3.5 million Brits visited Italy, 8.8 million visited France and an incredible 13 million visited Spain. The weakness of the pound means that holidays overseas are inevitably going to cost more next year than this year and last year, and Brexit brings some additional uncertainties for the outbound sector. Some of the concerns for consumers include what will happen to roaming fees and the European health insurance card, passenger rights, as well as the issue of the EU package travel directive, which offers consumers protection in case of insolvency or where there is a failure to provide contracted services. I would welcome the Minister’s comments on how the Government intend to deal with those matters as we exit the EU. The unfortunate collapse of Low Cost Holidays this summer has made clearer than ever the importance of protections such as the Civil Aviation Authority’s air travel organisers’ licence protection scheme.
The UK has the largest aviation market in Europe and the third largest network of routes in the world, behind only the United States and China. It is vital that the UK aviation sector retains its place as a global leader and that we maintain the lower prices, better service and greater choice that aviation liberalisation has provided to British consumers. We need to aim for new aviation agreements as quickly as possible and to maintain the current market access that gives our airlines the right to operate air services both within and beyond Europe. We should be aiming to convince the 27 remaining members of the EU that it is in their interests, as much as ours, to maintain the aviation links that play such a key role in the prosperity of all our nations.
There is no getting away from the fact that the access the UK currently enjoys comes from our membership of the EU. That includes access not only to the EU market, but to that outside Europe, as the UK benefits from being part of the EU’s aviation agreements with other countries, including, crucially, the EU-US open skies agreement. Unless the Government reach new agreements on maintaining market access, our airlines will have no legal right to operate services, and there are no World Trade Organisation minimal alternatives to fall back on in this sector. The UK might also be able to review air passenger duty on flights. Our APD is already one of the highest in the world, and it significantly adds to the cost of flights.
Clearly, there are both challenges and opportunities for the tourism industry as the UK exits the European Union. Given the overall economic contribution of the tourism sector, it is vital that the Government pull what levers they can to protect jobs and to take advantage of the window of opportunity that the weak pound brings to attract even more visitors to the UK.
The Minister will be familiar with many of my policy asks. I believe that we must make a decision about airport expansion in the south-east quickly and start negotiations on aviation deals, access and landing slots as a matter of urgency. We should carefully review air passenger duty and the cost and processing of multiple-entry visas. We should review all EU regulations, such as the package travel directive. We should revisit and reconsider reducing VAT on tourism, and we should consider increasing the budgets of VisitEngland, VisitBritain and the Discover England fund. We must continue to find ways to attract visitors outside London, where 50% of all inbound tourism money is spent, and get more tourists into our beautiful countryside and the regions.
Those are lots of asks. To be fair, the Government are taking tourism seriously. I was very pleased indeed that one of the first publications of the new Government under the new Prime Minister was the “Tourism Action Plan”, which updated the five-point plan that David Cameron announced within weeks of the 2015 election. I also welcome the fact that cross-departmental efforts are being made to grow tourism. I hope that, through this debate and further such discussions in this place and with industry, we will be able to formulate a positive future for tourism outside the EU, but remain very much open to Europe and, indeed, the world.
Several hon. Members rose—
Mr George Howarth (in the Chair)
Order. The brevity of the hon. Gentleman’s speech is very helpful because it means that at least one or two more colleagues will be able to get in, so I congratulate him on that. To get in everybody who has expressed an interest in speaking, I am reluctantly going to have to impose a time limit of three minutes per speech. If Members take interventions—they are perfectly at liberty to do so—I may, during the course of the debate, have to consider reducing that time limit still further.
Ms Margaret Ritchie (South Down) (SDLP)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing the debate. He and I co-chair the all-party parliamentary group for the visitor economy, and I know that he has a background in tourism and an abiding interest in it. He raised various issues. The all-party group has already undertaken an inquiry into apprenticeships—in particular, the apprenticeship levy—and we have noted the deficit in training for chefs in the hospitality industry, which needs to be pursued in this post-Brexit negotiation phase. We will also look at the issue of coastal economies.
The hon. Gentleman mentioned the issue of air passenger duty. As a representative of a constituency in Northern Ireland, I would very much like us to compete with the Republic of Ireland, where air passenger duty is at 0%. I want an equivalent level in Northern Ireland to attract more visitors to sample our historical sites. Heritage tourism is of particular importance to us. We also want a reduction of VAT on tourism because, again, we are competing with the Republic of Ireland. VAT on tourism in the Republic of Ireland is levied at 9%, whereas ours is 20%.
In the post-Brexit situation, there is the possibility—although I hope not—of an EU border on the island. I do not want to see that happening, because that could have further detrimental consequences for our tourism industry. In my constituency, tourism is a catalyst for economic development, sustaining jobs and creating new ones, because manufacturing does not exist to the same extent as it does elsewhere.
I fear that the priority for the Northern Ireland tourist sector after the referendum will be damage limitation, rather than seizing new opportunities. Contrary to the negative characterisation of our tourism industry by some Brexiteers—I am simply stating a fact—the tourism sector in Northern Ireland was already creating new opportunities and opening itself up to a wider audience before the referendum took place. We benefited considerably from the European funding mechanisms that were in place on a cross-border basis. Some areas were marketed through those mechanisms. In fact, the island of Ireland, north and south, is marketed through Tourism Ireland. Therefore, we want all forms of mitigation to be pursued, we want to retain the Interreg funding mechanisms that were dedicated to tourism development and tourism projects, and we want to develop our existing tourism products, including our Christian heritage, our general heritage tourism and our special landscape quality. In the negotiations, we want the Government to take into account our unique situation, in terms of tourism development, and we do not want to see a hard border.
James Heappey (Wells) (Con)
I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate. In the main Chamber of the House of Commons this afternoon the referendum campaign is being rerun, so it is nice that in Westminster Hall we are looking at what the threats and opportunities of Brexit are for this important industry. It is also great to see the south-west so well represented. It just goes to show how important tourism is to our region, and that we are indeed the best region to visit in the United Kingdom, if not the world. It is a pleasure to serve under your chairmanship, of course, Mr Howarth.
I rise to speak in two capacities: first, as an MP for a constituency that has some fantastic tourism opportunities and for which the visitor economy is hugely important; and, secondly, as the chair of the all-party parliamentary group for the UK events industry. Both roles have effectively the same demands. The challenge of Brexit for the hospitality industry and the events industry is that they have increasingly relied on a migrant workforce. The potential that the workforce will be less available is challenging to many businesses in our sector.
Another challenge, particularly for the events industry, pertains to business travel, and meetings and conferences that are hosted in the United Kingdom. If we make it less easy for our European neighbours to visit us, we must balance that by putting in place a more permissive visa regime for business travellers from the emerging markets, which we are hoping to open up with our free trade agreements with the rest of the world. It is hugely important that we get that right so this incredible place for hosting business travel and tourism alike is somewhere that people can come to easily. When they arrive, there must be a quick and easy immigration process so that their first experience of the United Kingdom is not one of hassle.
In addition, the tourism and events industries in the UK must be able to access European-wide supply chains. Those industries are interconnected across the European Union, and there is a real danger that, if we were to leave the free market, those supply chains would no longer be available to us. It is important that, as an industry, we say that that needs to be addressed. Where supply chains exist in the EU and UK companies organise events or send tours into the European Union, they should be given all the advantages of the free market, even if the Government’s choice is that we do not remain in it.
I have set out several key threats, but there are, of course, opportunities. More than anything else, we must ensure that the UK continues to be a world-class destination for leisure or business, so that, whatever the impact of Brexit may be, we counter that by being a brilliant place to come. In closing, there are a couple of things that I think the Government should seek to do—
Corri Wilson (Ayr, Carrick and Cumnock) (SNP)
Almost 1.5 million visitors arrived in Scotland from the European Union last year, and spending by tourists in Scotland contributes about £6 billion to Scottish GDP. We have in the region of 15,000 tourism-related enterprises, accounting for almost 8% of employment in Scotland. What we do not have is certainty. Despite years of bickering between the factions in the Conservative party, despite promises on the sides of buses from leave campaigners, and despite almost four months of pondering by the Government since the referendum in June, we still have no idea what Brexit means.
The Prime Minister is keen to emphasise that “Brexit means Brexit,” as if that statement carried any meaning. It does not. It seems that every day there is another Tory statement that contradicts the last. Will it be soft Brexit or hard Brexit? Will we retain membership of the single market or just access to it, and on what terms? Will there be hard borders? Will European tourists need visas? Will European nationals living, working and paying taxes here in the UK be told to leave? We still do not know what form of Brexit the United Kingdom Government seek to pursue, what they hope to achieve in their Brexit negotiations or what the rest of Europe will be inclined to offer us.
The tourism industry in Scotland and across the UK is facing unprecedented uncertainty, not just because of the Brexit vote but because those who campaigned for it and those who have since jumped on the bandwagon have no coherent plan. I suspect that they never had one.
Mr Alistair Carmichael (Orkney and Shetland) (LD)
Tourism industries, wherever they are, do not exist in a vacuum but depend on other industries. For example, the food and drink industry is supremely important to tourism in my constituency, and that industry has long had protection from the EU under product designation orders. Does the hon. Lady agree that that is the sort of detail that we need to hear about from the Government?
Corri Wilson
Yes, absolutely. That proves what a complex situation we are in, and we need some answers.
Office for National Statistics figures suggest that Brexit could create a huge financial barrier to businesses and tourism if visa charges are levied on travel to Scotland. If EU visitors to the UK have to start shelling out £87 a pop for a standard short-stay visitor visa, how many will decide to stay on the other side of the channel? Although Scotland has much to offer, long, hot, sunny days are not our biggest draw, so we need to make it easy for holidaymakers to choose us, not put obstacles in their way. If the Tories decide that we do not get to keep the benefits of free travel for our European neighbours, the resulting financial barrier could have dire economic consequences for the Scottish tourism industry.
Scrapping the free movement of people will have an adverse impact on the workforce of our tourism industry—an industry that employs in excess of 25,000 EU nationals in Scotland. Such migrants make a valuable contribution to Scotland and are an important part of our future; they both contribute to sustainable economic growth and mitigate the effects of demographic change. Scotland’s rural economy in particular benefits from migrant workers from other EU countries. The new Prime Minister’s first commitment should have been that EU citizens would have the right to remain in the UK, but it seems that she is content to use them as a bargaining chip. It is crucial for businesses and communities across rural Scotland and the tourism sector that the UK Government provide guarantees on the residency status of EU nationals living in Scotland.
In these uncertain times, we in Scotland are working hard to support and promote economic stability and reassure EU nationals who have chosen to make Scotland their home that they remain welcome. The Scottish Government have been engaging with the tourism sector about what Brexit may mean for both EU visitors and the many EU citizens who are employed in the sector. We are committed to supporting the tourism industry by delivering a 50% reduction in air passenger duty. Tourism is worth billions of pounds to Scotland’s economy and is hugely important to local communities such as mine in Ayrshire, the home of Burns, which depends on the jobs and investment that tourism brings. It is shameful that the UK Government’s lack of clarity and direction is creating such uncertainty and instability and placing barriers in the path of that vital industry. They need to act now to reassure the tourism sector.
Steve Double (St Austell and Newquay) (Con)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate.
I believe it was no coincidence that in July 2015, the former Prime Minister, David Cameron, chose to come to the Lost Gardens of Heligan in my constituency in mid-Cornwall to launch the Government’s tourism strategy. Tourism is clearly vital to Cornwall and its economy; it represents around 15% of our local economy—31,000 jobs and 3,000 businesses—and many more businesses in the supply chain support the industry. It would be difficult to overemphasise the importance of tourism to the Cornish economy. It is therefore vital that we consider the effect of Brexit on tourism and Cornwall’s future.
The initials signs have been positive. Virtually every tourism-related business that I have spoken to this year—whether in Newquay or places such as Mevagissey or Fowey—has reported that it is having a positive year, and some have actually said that they are having a record year. That is probably to some extent down to the “Poldark” effect, and we are grateful to the BBC for its weekly primetime advert for Cornwall on Sunday evening television, but I suspect that a lot of it is more to do with the value of the pound, which has encouraged UK tourists to take staycations. Cornwall is clearly one of the destinations of choice for holidays in the UK, but it also attracts visitors from overseas.
As we consider our position on leaving the EU, it is vital that tourism is put at the heart of our renegotiation, and we need to do more to consider inbound tourism to the UK as part of our international trade. It is an export, and we need to support it. Now is the time to invest more in promoting the UK as a tourist destination for overseas visitors.
I add my voice to some of the points that my hon. Friend made about the importance of aviation in our negotiations on leaving the EU. The current situation makes it even more vital than ever to make a decision on airport expansion in the south-east and to get international and domestic connections. We must ensure that we negotiate aviation agreements before we leave, because it is vital that we have continuity; we cannot afford not to have aviation agreements in place for just one day.
There are clearly both challenges and opportunities for the tourism industry as we leave the EU. In conclusion, I would like to invite all hon. Members to stay in the UK and come on holiday to Cornwall next year.
Deidre Brock (Edinburgh North and Leith) (SNP)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate.
I am surprised that no thinking or planning appears to have been done in Whitehall about the effects of leaving the European Union on tourism. Mind you, there does not seem to have been any Whitehall planning for the effects of Brexit on anything. Apart from the possibility of visas being introduced to stop those pesky Europeans sneaking in here without telling us, having holidays and spending money, we are only now starting to see the outcomes of the leave vote.
I assume that we all got a briefing from the Performers’ Alliance—I declare an interest as a member of the Performers’ Alliance all-party parliamentary group—that laid out its fears about performers not being able to move freely and tour after Brexit. The same thing will happen in reverse; a closed border will mean that cultural tourism will be damaged and fewer performers, artists and musicians will come here. The restrictions being imposed by UK Visas and Immigration on performers from around the world are already having an adverse impact on my constituency. Edinburgh, of course, plays host to the largest arts festival in the world every year, and performers are now regularly being refused visas for the festival. If that gets worse because EU visitors are forced down the same route, our international reputation for high-quality artistic endeavour will be affected.
In 2010, the European Tour Operators Association did some research about the effects of the UK not being in the Schengen visa scheme and concluded that UK tour operators were losing substantial business and turnover. Tourists from furth of Europe were happy to pay for one visa for the 26 Schengen countries but reluctant to pay out more cash for a visa for the UK than they had for those 26 countries. I thought at the time that the same must apply to business travellers. If they are looking for investment opportunities and can travel to the biggest chunk of Europe on one visa, some must wonder why they should pay extra for the UK. The lesson of Schengen is, of course, that free movement of people is advantageous to the economy, and especially to industries such as tourism and culture, which require people physically to move from one place to another. If we cut ourselves off from the 500 million people in the EU, how much damage will have been caused to those industries by Brexiteers?
As the walls go up to build fortress Brexit and we are told to duck and cover while the assembled intellectual might of the leave campaign protects us from foreigners, let us take a moment to think this through. Is it really to our advantage to cut ourselves off from tourists, customers, trade and exchange? Hotels need their doors open to welcome customers, and we need our borders open to welcome tourists. Brexit is doing us a lot of damage already, and the Government have to start looking at ways to mitigate that.
Mr George Howarth (in the Chair)
There are two Back-Bench speakers left, and I will then call the Scottish National party Front-Bench spokesman at 5.05 pm, so will the next two speakers try to share what time is left between them?
Mrs Sheryll Murray (South East Cornwall) (Con)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) on securing time for Members to discuss this important matter. As he and the Minister will be aware, I campaigned wholeheartedly for the UK to leave the European Union. Tourism is close to my heart as my constituency is, in my opinion, the most beautiful in the UK, attracting thousands of visitors each year. I know, however, that my hon. Friend the Member for Newton Abbot (Anne Marie Morris) would intervene if she could to contest that and say the same about her constituency.
Brexit offers the opportunity to further invigorate our thriving tourism industry by reducing red tape, enabling more diversification and demonstrating that the UK remains open for business and welcomes visitors from around the world. The tourism industry contributed £56 billion in economic output in 2013, and tourism-related industries employ 2.8 million people, which is 9% of all employment. There were 36.1 million inbound visits to the UK in 2015, with London being the most popular destination, attracting 51% of all visits. However, Cornwall remains one of Britain’s most popular tourist destinations outside the capital.
Visit Cornwall’s vital work is underpinned by the Government’s five point plan, as my hon. Friend the Member for St Austell and Newquay (Steve Double) mentioned. I recently spoke to Chinese business leaders and was pleased to learn that enhanced visa services are making a positive impact, particularly as Chinese visitors spend an average of £2,500 each when visiting the UK.
It would be wrong not to acknowledge that some tourism organisations and businesses have concerns about the long-term impacts of Brexit. I understand those concerns, particularly around immigration, taxation and regulation. I will pay close attention to those issues on behalf of my constituents and raise them with Ministers if necessary. I was encouraged, however, when the Secretary of State for Exiting the European Union said that he would protect the rights of EU citizens here provided that Britons in Europe are treated in the same way.
If we all work together, Brexit will enable our wonderful tourism industry to thrive further still. I was encouraged to read in a House of Commons Library briefing paper:
“The attractions management firm, Continuum…although it disagreed with the decision”—
to leave the European Union—
“believed the UK was ‘resilient enough to survive and thrive’”
outside the European Union. I share that confidence.
Rebecca Pow (Taunton Deane) (Con)
I rise to support my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), particularly on his good points about visa-free travel, airport expansion and VAT on tourism. If we can address those issues and take advantage of the weak pound, there are huge opportunities to build on tourism in this country, and it is crucial that we do so. Public relations and promotion will form a big part of what we need to do to up our game.
Tourism is really important in the south-west, bringing in £10.7 billion. In Somerset alone, where my constituency is, it brings in £1.2 billion. It also employs 10% of the workforce. When the whole of Somerset was recently shut because of flooding, the consequences were dire for rural tourism: we lost something like £250 million as a result. We do not ever want to see that happen again, so we do not want an impact of leaving the EU to be that we see no tourists coming. We do not want a knock-on effect as significant as that. We must therefore make tourism, which is already important, even more significant.
I will look at one area that is a great selling point for the UK, and the south-west in particular—garden tourism, which brings £1.4 billion a year into the UK. Just in my constituency we have Cothay Manor and Hestercombe gardens. Hestercombe attracts 100,000 visitors a year, many of whom are from Germany, France, the Netherlands and Belgium. I have worked at that garden, promoting it for tourism, and there are great opportunities to build on that strength, but we must ensure that those visitors can still get here easily.
I stress in particular the importance of the Government building on all their commitments on connectivity. Our visitors have to be able to get from A to B, and I stress to the Minister that we want the injection of funds to continue.
John Nicolson (East Dunbartonshire) (SNP)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing the debate. Whether it is walkers setting off from my beautiful constituency towards the foot of Ben Nevis on the West Highland Way, or those who learn of their ancestors, discover our historic castles, enjoy our renowned food and drink or sample Scotland’s art and museums, Scotland caters for all, the length and breadth of the country.
Tourism is arguably Scotland’s most important industry, as we showcase ourselves to the world. There is significant danger that leaving the European Union will result in unnecessary barriers, which will deter visitors and investment in our country and harm this important industry.
Quite needlessly, the Scottish tourism industry now faces the real possibility of Brexit inflicting long-term damage on a sector that is so vital for Scotland’s economy and sense of self. More than three months on from the referendum, no decision has been made on the single market or the status of EU nationals living in and traveling to the country, while the value of the pound continues to plummet.
European funds are vital to the tourism sector in Scotland. VisitScotland currently draws down £11.7 million in European regional development funds. European funding support for tourism development activities is especially important in rural areas, creating jobs and boosting wealth in peripheral, relatively poor regions. Of course, projects that improve the infrastructure and tourism appeal of locations such as the highlands and islands of Scotland have received assistance from Brussels, not least the new tourist route in northern Scotland, the north coast 500, which is dubbed Scotland’s route 66. Such projects show ways of showcasing Scotland, using the natural and human resources we have to their full potential.
Unlike the United Kingdom Government, the Scottish Government have made it clear that we want EU nationals to live in the country and stay in the country. The tourism and hospitality industry in Scotland employs in excess of 25,000 European Union workers, and having access to a skilled and motivated labour market remains a priority for the industry. We do not want the free movement of people to end.
All the young dynamic people from throughout the European Union who work here could lose their jobs, and the hotel owners and managers would find them difficult to replace. Furthermore, figures from the Office for National Statistics show that Brexit could create a £270 million barrier to business and tourism from charges levied on travel to and from Scotland.
A third of Italians and Spaniards, 30% of Germans and a quarter of French holidaymakers said that a leave vote would make them less inclined to travel to the United Kingdom. Part of the reason why people come to Scotland is the warmth of the welcome, and it is vital that that continues.
Perhaps most worrying of all is the feeling that the United Kingdom leaving the European Union has generated. Increasingly, it feels to many of us that the UK is becoming more insular and less open to outsiders. When the Prime Minister said last week:
“If you believe you’re a citizen of the world, you’re a citizen of nowhere”,
that sent out a strong message to people living here and to potential visitors throughout the world. We on the Scottish National party Benches feel very different, and our message could not be more different: “If you are citizens anywhere in the world, you are welcome in Scotland.”
Kevin Brennan (Cardiff West) (Lab)
It is a pleasure to serve under your chairmanship, Mr Howarth. I congratulate the hon. Member for Mid Worcestershire (Nigel Huddleston) on securing this important debate, and I thank every hon. Member who has contributed. Some excellent points have been made by the hon. Members for South Down (Ms Ritchie), for Wells (James Heappey), for Ayr, Carrick and Cumnock (Corri Wilson), for St Austell and Newquay (Steve Double), for Edinburgh North and Leith (Deidre Brock), for South East Cornwall (Mrs Murray) and for Taunton Deane (Rebecca Pow), and by the SNP spokesman, the hon. Member for East Dunbartonshire (John Nicolson).
It says something about the significant ramifications of Brexit that we are debating its impact on tourism. One would not normally think a constitutional referendum would lead to us debating the future of the UK tourism industry, so it is quite a surprise that it has come to this, but it shows how important the Brexit vote is to the future of the industry.
As has been pointed out, there has actually been a short-term boost to the tourism industry since the Brexit referendum. Despite the weather over the past few months, tourism in the UK has gone up; visitor numbers from outside the UK have risen since June 23. This July saw a 1% increase compared with the same period last year, while the number of staycations—visitors from inside the UK—has also risen since June. That is important. As hon. Members have said, tourism is an important industry that accounts for 9% of the UK’s employment.
The principal reason for that increase in tourist numbers in recent months is the weakness of the pound, which has been caused by both the impact of the Brexit vote itself and, I am afraid, by the Government’s mishandling of the aftermath of the vote. With each faltering step in their handling of Brexit, the pound has devalued further. Yesterday, its value against the US dollar dropped to below $1.23. On UK visitors who are going to Europe on holiday, one of our colleagues was in Venice recently taking a hard-earned short break away from his constituency, and he told me he was getting parity when exchanging the pound for the euro while he was there.
Kevin Brennan
I will in a moment. What is not clear—perhaps the hon. Gentleman can clear this up for me—is whether the Government want a weaker pound.
Kevin Foster
If we want to talk about how things went over the summer, I must say it was a real spectacle to observe the hon. Gentleman’s own party.
I was actually going to be slightly more positive and constructive and say that one reason why people see places such as Torbay as great places to come to is that we are a safe and welcoming country and do not have some of the issues that exist in other nations.
Kevin Brennan
I will come on to that, but I say to the hon. Gentleman that changing the subject because he has a weak argument is not always the most powerful way to make his point. We are talking about tourism and the tourism industry. I praise Torbay—I spent many happy weeks enjoying holidays there as a child and a young man, and it is a wonderful destination.
My question is this: is the new weak pound—trading at parity with the euro in recent days, as I said—now the Government’s economic policy? Following Brexit, are the Conservatives now the party of devaluation? Surely not, because I thought stable, sound money and a strong, stable pound, with the discipline that brings to productivity, was one of the central principles of a Conservative Government. Apparently not. Hon. Members will have heard at Scotland Office questions today—I am sure they were all there—the Secretary of State for Scotland bragging about record numbers of people coming to this year’s Edinburgh Festival as a result of being attracted by the weak pound. Perhaps the Minister will confirm at the end of the debate that a weak pound is Government policy.
The effect on the pound is not the only impact of Brexit. Until the Government decide how freedom of movement is going to be reformed when we leave the EU, and how and whether those measures—[Interruption.] The hon. Member for Torbay (Kevin Foster) is free to intervene again if he wants to, rather than chuntering on from a sedentary position. Until the Government decide how and whether those measures will affect tourist entry into the UK, Britain’s accessibility as a tourist destination carries a lingering question mark, given that 73% of foreign visitors to the UK in 2015 were from Europe. Any uncertainty of that kind left unaddressed is extremely unhelpful. That point has been made by Conservative Members, though perhaps not in the way I would have made it.
Another concerning issue that has been mentioned is the importance of EU workers to the tourism sector. As has been said, tourism-related industries account for 9% of UK employment, and quite a high proportion of those workers are non-UK citizens, particularly in London. The Association of British Travel Agents and Deloitte published a report prior to the referendum outlining the potential consequences of Brexit on tourism, which stated that limits to the sector’s ability to employ people from outside the UK could lead to real difficulties in filling roles. It also found:
“Restrictions on employing EU nationals might thus exacerbate existing skills shortages. Ultimately this could have a detrimental effect on the sectors’ ability to serve consumers at the standard they expect.”
James Heappey
I agree with the shadow Minister. One of the advantages of the EU migrant workforce has been to provide a range of linguistic skills in a lot of our hotels and conference venues. If we are going to lose that, we could really do with some better language training in schools to replace it.
Kevin Brennan
I hope we are not going to lose it. I think we can have both, and that ought to be our aim going forward. I do not think the hon. Gentleman intended to say in any way that those people should be sent home and that we should, over a period of time, train their replacements. Of course we should improve language skills in our schools, and of course we should get more UK citizens to fill jobs in the tourism industry, but it is equally important that we do not suggest that we do not welcome diversity in our tourism industry in this country.
One problem is that some of the Government’s post-Brexit messaging is potentially damaging to Britain’s blue chip brand. At the Conservative party conference we saw the Home Secretary seriously announce, at least in the headlines, a misguided policy of publicly listing foreign workers. The Government have subsequently clumsily withdrawn that, but we have seen all this before. I have seen this movie many times over: at the Conservative party conference, Ministers announce right-wing policies that deliver plenty of tabloid headlines and claps in the conference hall, but then inevitably row back from that extreme position in subsequent days. The problem is that their message is heard, not just in Britain but overseas.
I am afraid that xenophobic sentiment, at the service of inflamed rhetoric to generate a lurid headline, keep the tabloid editors happy and send out a dog whistle to the right, is an ugly thing. Shame on the Home Secretary for risking Britain’s reputation abroad for hospitality and tolerance for a few moments of glory on the front pages of the redtops. That sort of behaviour not only damages Britain’s brand abroad but ultimately short-changes the British public. In the long run, British tourism will thrive not on the attractiveness of our weather but on the attractiveness of our welcome. It will thrive not because Britain is cheap because of the weak pound, but because Britain is rich in culture, heritage and hospitality. British tourism will flourish not by shrinking to little England slogans but by confidently projecting a greater Britain with a warm and open welcome to visitors to all of its parts—to Wales, to Northern Ireland, to Scotland and to England—often through the gateway of one of the world’s most diverse cities, London.
Coming from Cardiff, I should mention before I finish that the Champions League final will take place there next year, and we hope that the road to Cardiff will lead to many visitors coming from overseas. UK tourism needs greater clarity from the Government on Brexit and clearer messaging that we are open and welcoming to the world, and that we want people from across the world to come here to enjoy our heritage, our countryside, our modern cities and sometimes even our weather, but most of all to feel that they are welcome. Devaluing the pound may work to the tourism sector’s advantage for now, but devaluing our brand as a country will do the opposite. If that continues, it will cause lasting damage to our reputation and to our vital tourism industry.
Mr George Howarth (in the Chair)
Before the Minister starts, she may be minded to leave a little bit of time for the mover of the motion to have the last word.
The Parliamentary Under-Secretary of State for Culture, Media and Sport (Tracey Crouch)
It is a pleasure to serve under your chairmanship, Mr Howarth. May I offer my congratulations to the hon. Member for Cardiff West (Kevin Brennan) on his appointment to his new role? I look forward to discussing this incredibly important issue with him on many occasions. I am grateful to my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston) for raising this issue and giving me the opportunity to update the House on the position of the tourism sector following the momentous European Union referendum result in June this year.
It is fantastic to see so many colleagues here to talk about the amazing UK tourism sector. The industry’s diversity has been demonstrated by the number of different points raised by Members, in terms of both threats and opportunities. I do not have time to respond to each point in detail, but I hope that my speech will, at a higher level, reassure them that their specific issues have all been discussed.
I want to make a quick point for our colleagues from Scotland and Northern Ireland. They will be aware that tourism is a devolved issue. However, VisitBritain works to promote the whole of the UK, and what a wealth of attractions and visitor experiences it has to market. I recommend that Scottish colleagues in particular look up the Nessie hunting campaign, which was designed especially for the Scandinavian market and is excellent. While I am on this issue, colleagues who said that the budgets of VisitBritain and the “Great” campaign should be increased should feel free to write to the Chancellor and make their cases much more loudly.
As we know, the British people voted to leave the European Union, and the Prime Minister has been very clear that their will must be respected and delivered. The task is now to establish what that means for the UK and its people, which includes the challenges and opportunities currently faced by the British tourism and hospitality industries.
As others have done, I will quickly run through how important tourism is to the UK. The industry contributes more than £60 billion to our economy. In 2015, we saw the greatest number of overseas visits to the UK on record, bringing £22.1 billion into the economy. Domestic overnight spend also hit a record high of £19.6 billion in England, and the industry provides 1.6 million jobs across the country. In short, the sector has been going from strength to strength, and Britain’s tourism industry is likely to see further benefits as travel to the UK becomes more affordable and attractive to EU countries and international markets such as the USA, which is our highest value market. Moreover, domestic tourism and hospitality has seen a boost this summer, with more people deciding to holiday at home. We need to continue capitalising on such opportunities.
Figures released last month show that July was the highest month ever for inbound tourism to the UK, and overseas visitors to the UK spent £2.5 billion in July, which is 4% up on the same month last year. ONS figures also show that it was a record July for inbound visits from EU countries. Furthermore, there was strong growth from North America, including the US—which, as I said, is the UK’s most valuable visitor market—with visits up 5%. Visits from the rest of the world were also up 6%.
Overall international visitor figures from January to July were up 3% from 2015, and Chinese visits showed massive growth of 40% between April 2015 and March 2016 compared with the year before. Just under half of accommodation businesses surveyed after the Easter holidays to July stated that advance bookings were very good, which is a record for the VisitEngland tourism business confidence survey. I think we can all agree that those are encouraging signs.
We should not forget why tourism is so successful in this country. To put it simply, we have a great deal to offer. We have extraordinary heritage, beautiful landscapes, great sporting events and some of the finest museums in the world. That will not change in a post-Brexit world. That is proved by the news that has broken during this debate that we have won the bid to host the 2019 UCI road world championships in Yorkshire. That great sporting event will bring a huge boost to local tourism.
As my hon. Friend the Member for Mid Worcestershire mentioned, we published the Prime Minister’s tourism action plan just before the August bank holiday. The document highlights our stunning scenery, monuments and cultural traditions, which will continue to draw visitors from both home and abroad. Furthermore, it reaffirms our commitment by setting out a series of new initiatives and measures to help Britain out-compete other major tourism destinations, to welcome more international visitors than ever before and to encourage more British people to holiday at home. It is vital to remember that our destinations, attractions and services across the UK will continue to deliver the same high-quality visitor experience to both domestic and international visitors as they always do. No matter what, the UK remains open for business, and we will always offer a warm welcome to our visitors.
Ronnie Cowan (Inverclyde) (SNP)
I hear those wonderful figures on tourism across the UK, and I welcome them all, but my concern in Inverclyde is that we welcome more than 100,000 passengers off cruise ships every year. I wrote to the Minister for Immigration to clarify how we will handle visas. His response was, “The Prime Minister has been clear that Brexit means Brexit.” I am afraid that that does not wash with me. Will the Minister shine some more light on this very difficult area? We have the product, but we cannot stop people at the borders and turn them away.
Tracey Crouch
I am sure the hon. Gentleman appreciates that visas are a matter for the Home Office, but I can tell him that we work closely on that key issue with our Home Office colleagues. My hon. Friend the Member for South East Cornwall (Mrs Murray) mentioned the new visa scheme between China and Britain, which is working very well, and I am sure we will look at that as a template for the future.
Dr Philippa Whitford (Central Ayrshire) (SNP)
I want to raise the issue of people actually getting here. At the moment, we are part of the open skies initiative, which allows our airlines—particularly our budget airlines—to fly backwards and forwards to Europe and between countries within Europe. If we are outside, is ensuring that we keep that advantage on the agenda?
Tracey Crouch
I am delighted that the hon. Lady raised that point, because my very next paragraph answers her question. For the time being, there will be no immediate difference in the way people travel. Travellers are as free to move between the UK and the EU as they were before the referendum. European health insurance cards will remain valid, and the single aviation area remains in place. However, I can reassure her that these issues are all being discussed. If Members will allow me, I will hopefully give them the reassurance they need.
The sector is strong and resilient and has overcome enormous challenges in the past such as incredible flooding in particular areas. The UK will continue to face growing competition from overseas destinations. That has always been the case, but now is the time to think about how we can tackle this even better as we reshape our engagement.
I would like to explain what we are doing within the Department to engage with this important sector. The Secretary of State for Culture, Media and Sport held a roundtable with the tourism sector at the beginning of August to give experts a more prominent voice in policy making and to listen and learn more about the new opportunities and challenges being faced. I followed that up with a Tourism Industry Council meeting last month. That has continued the honest and useful two-way conversations between the sector and Government.
Through the Tourism Alliance we have a long and thorough list of issues affecting the industry, some of which indicate a challenge but many of which highlight an opportunity. I mean this with the greatest respect to Members, but not one of them raised a new issue in the Chamber today. These are all issues we are well aware of and are working on with people within the sector. In fact, the list is much longer than those raised by Members today.
Our consultations have told us a great deal. For example, one important issue for the tourism and hospitality industries is the Government’s priority to exercise more control on the numbers of people coming to the UK, the free movement of people from Europe and crucially, as Members have mentioned, how that will impact on employment. The tourism industry employs 1.6 million people, 9% of whom—that is 144,000 people—are EU nationals, and 6% of whom are migrants but not EU nationals. We have talent within the UK that we need to continue to promote and to retain. We must ensure we upskill the workforce, so that we can rely on our home-grown employment.
I am conscious of the time. All the issues raised today have been on the agenda and will continue to be. We take this incredibly seriously. It is an important sector for the future of the United Kingdom.
Nigel Huddleston
I thank the Minister for her response and am somewhat reassured by her comments. I look forward, along with all colleagues in the room—who are from all corners of the UK, which is very reassuring—to continuing the dialogue. This is a complicated issue. The fragmented nature of the industry means it is challenging to engage with, and I appreciate all the efforts being made. I look forward to continuing the dialogue through the APPG, the Culture, Media and Sport Committee and all sorts of other vehicles. I appreciate the Minister’s response.
Mr George Howarth (in the Chair)
May I thank those who have taken part in the debate for their co-operation? We managed to get everybody in who had applied to speak, although I am mildly disappointed that nobody thought to mention Knowsley safari park.
Question put and agreed to.
Resolved,
That this House has considered the potential effect of the UK leaving the EU on tourism.