Tourism Industry and VAT

Debate between Lord McCrea of Magherafelt and Cookstown and Mark Williams

Tuesday 17th March 2015 Westminster Hall

[Mr Williams]

The hon. Lady is right that it is about developing for a social perspective and building a skills base for the future. Many parts of the tourism sector are ideal way for doing just that.

I will proceed and not take any more interventions. The Cut Tourism VAT campaign commissioned a report by Nevin Associates Ltd, which suggests that a change in VAT would give the UK a £4 billion economic boost, with £166.5 million coming to Wales. There would be 6,000 more jobs in Wales and 120,000 across the UK. In my constituency, with its vibrant local tourism sector, that could amount to a £5 million injection into our economy.

My hon. Friend the Member for Torbay (Mr Sanders) talked about a £10.5 million impact in his constituency, but £5 million would be very important to Ceredigion’s economy. That could create 166 jobs directly and many more indirectly.

Let us look at the arguments borne out of the research a little more closely. First, we need to talk about the increased tax revenue for HM Treasury. Research indicates that, yes, there would be a net revenue loss to the Treasury for the first two years, but after five years such a move would generate a positive net value of £668 million and over 10 years that value could reach £4 billion. Those are significant figures.

Where does that money come from? The research indicates six key areas. First, there will be lower prices, which will create greater demand and much higher turnover in the sector. Secondly, the Treasury will receive increased income tax and national insurance payments generated by the new jobs that we have talked about and, critically, by higher wages in the sector. Thirdly, there will be savings in social security payments as a consequence of lower unemployment, with some of the new jobs created in the sector taken up by those who were previously unemployed. Fourthly, there will be increased corporation tax payments as a result of the higher turnover and growth in those businesses that we all aspire to. Fifthly, there will be an increase in income taxes paid on dividends to shareholders, which would be generated by the accommodation and attraction sectors. Sixthly, there will be the multiplier effect of the additional taxes generated down the supply chain from the accommodation and attraction industries.

I think back to debates and the petitions presented at the time of the VAT measure on static caravans, which stemmed from an unfortunate Budget. I am sure that tomorrow’s Budget will be vastly more successful than that. I remember talking to operatives in my constituency about that very narrow thing, the sale of static caravans in west Wales, and the knock-on effect of the reduction on VAT was immense. The highly integrated nature of the tourist economy was clear in that debate, so the knock-on effects of this change could be hugely significant for the rest of the economy. As I said to my hon. Friend the Member for Newton Abbot (Anne Marie Morris), it would be a real boost for regional economies and tourism-dependent areas such as mine. In my local economy, if we take out the big employers, such as the national health service, the local authority and two universities, a cross-section of small businesses is left, largely involved in farming and tourism, and we need to grow those businesses.

I move on to the impact that this change would have on the UK’s balance of trade. New research published in this area has provided information that was not considered before; the research shows that a significant boost would be provided to the UK’s exports. That is important, given the internationally competitive nature of the sector and concerns about the UK balance of trade deficit. In 2013, tourism expenditure by overseas visitors to the UK was £21 billion, which accounted for 3.8% of the UK’s total exports of £550 billion. Over a 10-year period, the research by Nevin Associates Ltd indicates that the total improvement in the UK’s balance of trade in response to a VAT cut would be £20 billion, which is a huge potential contribution.

The other area of growth is the number of businesses paying VAT. We all know that the UK tourism industry is populated by a very large number of very small firms that may or may not choose to expand or invest in order to keep below the VAT threshold. If my hon. Friend the Member for Aberconwy (Guto Bebb) is called to speak, he may want to talk specifically about the issue of VAT thresholds. Lower VAT would encourage these companies to register for VAT and develop their businesses.

[Dr William McCrea (South Antrim) (DUP)]

Will the hon. Gentleman give way?

[Mr Williams]

I will take one last intervention.

[Dr McCrea]

I congratulate the hon. Gentleman on securing the debate. He has been emphasising all the pluses and why we should be acting to reduce VAT, but has he made an assessment of the likely effects on the economy from failing to act on reducing the rate of VAT to accommodation, restaurants and visitor attractions?

[Mr Williams]

Well, I am specifically talking about visitor attractions and accommodation. In this House we are all united by one thing: we want to see our economy growing and thriving. My contention is—I think it is the contention of most people in the Chamber today—that reducing VAT is a strong way of boosting our economy. Lower VAT would encourage these companies to register for VAT and develop their businesses. In France, the amount of businesses falling outside the tax regime has been cut by an estimated €720 million a year, following hospitality VAT reductions.

As the Minister is aware—this is the root of this debate—differential rates of VAT can be introduced due to EU legislation, and all but three countries in the EU have a reduced rate of VAT on the tourism sector. Only the UK, Denmark—which has no reduced rates for goods or services—and Slovakia have not reduced rates. Lithuania used to have no reduced rate, but in January, they lowered their rate of VAT on hotel accommodation to 9%.

Looking at the Irish experience—perhaps pre-empting comments from friends from Northern Ireland today—according to the review of the policy in Eire by the Irish Government, who cut tourism VAT in 2011, they have seen employment increase by 20,000 people directly in the tourism sector. Operators have passed VAT reductions down to customers and as a result, we have seen a sustained growth in tourists and earnings, meaning that what was a temporary measure is now to become a permanent one.

The Minister will also be aware of the work of Professor Blake and the evidence session of the Select Committee on Culture, Media and Sport in which he spoke in January. He concluded—he is a former Treasury adviser—that reducing tourism VAT was a very efficient tax reduction for two reasons. First, he said that VAT on tourism was not an efficient way of creating revenue, as tourism was an elastic product, meaning that demand would go up as well as down. Secondly, he said that tourism VAT was a tax on domestic goods while foreign goods were being left untaxed. Therefore, that made the VAT highly inefficient, as customers will buy foreign goods over domestic ones. Those of us who are trying to promote growth in the domestic sector want people to have holiday weekends in Aberystwyth and Aberaeron, not over in Barcelona and Torremolinos. That is the nature of the competition that we face.

As part of the recent Select Committee on Welsh Affairs report, it was agreed to look at this issue. The Select Committee agreed and included in its recommendations to the UK Government that

“the UK Government review its policy on the VAT rate for…tourism…with the ultimate aim of reducing the current 20% rate.”

The Government rejected that. I am not expecting a miraculous change overnight on the basis of this debate, although that is what I wish for. However, I hope that at the very least, this debate will promote continued reflection on the matter by the Treasury. There is a message there for the Labour party as well, because sadly, to date, the messages we have had on this issue from Labour have not been particularly robust either. However, what I can say is that the Cut Tourism VAT campaign will continue to push the case as robustly as we can.

Finally, the global recession may well have been the main reason, between 2006 and 2012, for falling numbers of visitors to these islands. However, since 2013, we have experienced—Wales included—an upward trajectory, which we all celebrate. The Government, through VisitBritain, have put funds into promoting tourism to good effect, as have our Assembly Government in Cardiff. However, our contention is that there is a vast potential for growth. As the economy continues to grow, as deficit reduction yields results and as public finances are managed, the Government—whatever their political complexion—need to address this issue.

I detect a huge enthusiasm in large parts of this country for developing the tourism sector. There is a great deal of innovation and some really impressive personalities out there developing their businesses. Reducing VAT in this selective way—on accommodation and on visitor attractions—would be the biggest boost imaginable for our very important tourism sector.

Autism

Debate between Lord McCrea of Magherafelt and Cookstown and Mark Williams

Tuesday 20th November 2012 Commons Chamber

[Mr Williams]

The hon. Gentleman is right and I suspect that our mutual friends in Autism Cymru, which is based my constituency, and Autism Northern Ireland have given us a similar brief about the collaboration between those two groups. Sometimes devolution can be helpful to our colleagues in England if it involves sharing good practice. We do not always get it right, but in this instance we have good examples to share with the Minister today and, in that spirit, I will explain some of those experiences. Like the hon. Member for Strangford, I can speak for my friends in Autism Cymru who would be more than happy to share some of their experiences with the Minister.

The Celtic nations partnership, which is made up of colleagues from Scotland, Wales and Northern Ireland who work together on these matters, has said:

“Developing national autism strategies supported by ring-fenced Government funding for autism is proving vital to improve the lives of people with ASD, and their families.”

Wales has had an all-age strategy for autism for four years. Since it started in 2008 some £12 million has been committed by the Welsh Assembly Government to the implementation of that strategy and, critically, to research into autism. Wales is the only nation with a national autism research centre, and it is based in Cardiff.

All 22 Welsh local authorities have an autism spectrum disorder local lead, and some have specific leads for children as well as adults. A national co-ordinator sits in the Welsh Local Government Association, and a national ASD practice website gives examples and shares practice throughout Wales. In my part of Wales, services and information are provided in both English and Welsh. As part of that process, each local authority has a local stakeholder group, and we should not understate the significance of that. This is about service delivery, people’s experiences and parents talking about their children. As the hon. Member for South Swindon said at the start of this debate, this is not about ticking boxes. Meetings and engagement with stakeholders are important. Every one of those authorities has had a local action plan in place since 2009. They are being reviewed and renewed depending on local need.

I hesitate to quote myself by saying that Wales is streets ahead, but I say that in the spirit of generosity to which I alluded at the beginning of my speech. The challenge is as great in Wales as it is in England, but we have the frameworks and structures in place to assist.

[Dr McCrea]

Does the hon. Gentleman take the point made by the hon. Member for Hornchurch and Upminster (Angela Watkinson) on the necessity of taking respite into consideration as part of an overall package of care?

[Mr Williams]

The hon. Gentleman is absolutely right. The hon. Member for Strangford mentioned the people he has met in his surgeries, and, as I have said, I have attended stakeholder meetings in Ceredigion. We have both heard from parents about the need for respite provision, so that they can recoup their energy and strength to be the parents they want to be.

I have two concerns about the UK situation. I am pleased that my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan), the former Secretary of State for Wales, and the hon. Member for Hayes and Harlington (John McDonnell), have referred to Atos. That is an emerging situation. I should like to emphasise the difficulties encountered by many claimants with autism when dealing with the Department for Work and Pensions and other Departments. There are concerns that work capability assessments, which determine eligibility for employment and support allowance, fail at their core to recognise the difficulties that people with autism face when looking for work and accessing benefits.

Communication difficulties can make face-to-face assessments very hard. People with autism can misunderstand questions and fail to pick up on inference and assumption—they might answer questions only in their most literal sense. Furthermore, interaction is a key problem with autism, so the condition does not lend itself well to a call centre culture. One constituent went without the benefits to which he was entitled for a long time because he simply could not face direct, blunt questions on the telephone without support. I was pleased that the initial work undertaken by Autism Cymru, which is based in Aberystwyth in my constituency, included going independently to Jobcentre Plus in the town to offer support and advice to the DWP staff who give advice to address some of the problems—I appreciate the complexity of doing so.

I commend Autism Cymru for its work with police forces in Wales. Four or five years ago, it developed the ASD emergency card scheme. As we have heard, many individuals with autism have become involved in the criminal justice system as a consequence of their vulnerability or their social and communication difficulties. The idea, which was pioneered in north Wales and Dyfed-Powys and rolled out across Wales, is that somebody with autism produces a card when they come into contact with the emergency services. The card not only informs the emergency service that the person functions on the autistic spectrum, but offers pointers on how communication with them can be advanced.

There are approximately 88,000 schoolchildren in England and 6,000 in Wales with autism. The majority are in mainstream schools. Therefore, every teacher—I used to be a teacher—should expect to teach a child who is on the autistic spectrum. They should also be ready to teach with, or have access to, the appropriate level of expertise. However, the National Autistic Society in Wales tells me that only 47% of parents were satisfied with the level of understanding of secondary school subject teachers. As we have heard, early diagnosis, assessment and intervention are critical. As a former primary schoolteacher—admittedly, it was some time ago now—I remain concerned, like the hon. Member for Stalybridge and Hyde, about the training available to class teachers.

I have not been involved in the all-party group on autism, but I very much endorse its call for a lead teacher in every school with specific responsibility for ensuring equality of access for children with autism. That goes beyond the requirements of a special educational needs co-ordinator. The demands on SENCOs are immense enough without the complexities and range of challenges faced by working with autistic children.

We need to give our teachers the support they need, and I am not convinced that we have done that. Anecdotally, I remember being summoned to the head teacher’s office to be told that a new girl would be joining my class and that she was autistic. I can in all honesty say that, having been a class teacher for three or four years, I had not experienced that in any other classroom. In my years of postgraduate training, I had never come across the term autistic. In fact, special needs education training in those times amounted to four or five hours in one afternoon. Teachers are often aware that they can be failing the children in their care. It is not necessarily their fault—the training needs to be available to support them.

If the debate is characterised by anything, it is the need to raise awareness: awareness not only in Government agencies and education, and—I am pleased to report, as did my friends in Northern Ireland—awareness of the progress in our countries as well. What I am sure we all agree on is that the lives of children and adults may only improve if society has a better understanding of the condition that, as we have heard, affects one in 100 children. Recent figures from the NHS Information Centre have confirmed a similar incidence in adults.

Children with Special Educational Needs

Debate between Lord McCrea of Magherafelt and Cookstown and Mark Williams

Wednesday 30th March 2011 Westminster Hall

[Dr McCrea]

Yes. I thank the hon. Gentleman for his intervention. The statements by Ministers that I read out contain fundamental principles that the Government are setting down. There is a review of this area, and the Government intend to make progress. All those fundamental statements by Ministers are important. All I am saying is that we will judge them by the actions thereafter, because the statements by Ministers will amount to nothing but air if they are not followed through and action is not taken to give the best possible educational opportunity to children with special needs.

Like my hon. Friend the Member for Upper Bann, I have special needs schools in my constituency and I know that many parents are battling for their children. When it comes to the statementing of children, my experience as a Member of Parliament is that my constituents have great difficulty in getting help when they really need it. Let us be honest: there are parents who do not have a great interest in the educational attainment of their children. Every parent should have a great interest in that, but not every parent does. Not every parent has the capacity to understand the great need for education for their children and how to get the best possible education for their children with special needs.

There are other parents, who have a real concern, yet they come up against walls, barriers and obstacles, which in the past they were not able to get over. We must ensure that we give the best possible advice and help to parents at what is a critical time, because many of the children whom we are talking about are losing years of their lives educationally that they will never be able to get back. It is vital that parents get the best advice at the right time and that therefore the child gets the best possible education, because that sets the stage not only for their educational attainment, but for their job prospects and everything else. It is vital that parents get help at the appropriate time. If that is what the Minister is setting her mind to, that will be of great help.

The Government also propose to ensure that assessment and plans run from birth to the age of 25. If I may, I will relate some of the experiences that I have had. In Northern Ireland, when children in special schools turn 18, they go outside the education system. They may have a mental capacity of seven, but they have a birth certificate that says that they are 18, and they leave their special school and go outside the education system. I am passionately angry about that, because what other child stops their educational attainment and advancement at seven years of age? No other child is allowed to stop at seven. Because the person has a birth certificate and a body that say that they are 18, they are moved aside. They have very special educational needs, but those needs are not being met after a particular age. That is a disgrace and an indictment of any society that allows it. I have in the past begged Ministers to intervene in this matter; I believe that they must tackle the issue. I trust that we will get answers on that.

Many parents are frustrated when it comes to getting statements for their children. Many do not have a sufficient understanding of what they need to do to get their child statemented and they come up against an education system that fights against that. There is a constant battle and, to be honest, many parents give up. The only person who loses is the child. We are talking about children and young people who need our help. That is where we as politicians come in. We set the guidelines.

[Mr Mark Williams]

Coming from one of the devolved nations as well, I fully agree with the hon. Gentleman. There are lessons to learn from those of us in Wales. I am glad that the Minister is to have a meeting with my colleagues in Autism Cymru to talk about some of the issues; we have managed to fix up a meeting. The hon. Gentleman is right to highlight the corrosive effect on young people. There has been a lot of talk in this debate about the rights of parents, and I absolutely concur with that, but we are also talking about the rights of children. That is why early diagnosis and follow-through are so important. We are stacking up huge problems for children from key stage 1 right the way through the education system and into young adulthood, as the hon. Gentleman said, if we do not address these issues at the earliest opportunity.

[Dr McCrea]

I thank the hon. Gentleman for his intervention. I wholeheartedly agree with what he said. May I draw attention to this issue? We have talked about parents battling, but why should parents alone have to battle on this issue? Many do not even know how to battle, and parents should not have to know how to battle. We are putting the responsibility on the parent, and if the parent does not battle, the child loses out.