Domestic Tourism

Jim Shannon Excerpts

Tuesday 12th January 2021 Westminster Hall

[Steve Double (St Austell and Newquay) (Con)]

I beg to move,

That this House has considered domestic tourism.

I am delighted to serve under your chairmanship, Mr Robertson. I rise to speak as the chairman of the all-party parliamentary group for hospitality and tourism and the MP for St Austell and Newquay, which is the constituency that many recognise as being the most reliant on tourism and hospitality in the country. It is estimated that more than 50% of jobs in the town of Newquay are directly reliant on the tourism industry. In 2018, St Austell and Newquay had more overnight stays than any other constituency in the country, at just under 5 million.

Across Cornwall as a whole, tourism represents almost 25% of our economy. It is said that one in three households relies on tourism for at least part of its income. There is no doubt that nationally—domestic tourism contributes almost £20 billion to our economy—and in Cornwall, we are very much reliant on the tourism industry for a large part of our economy.

There is no doubt that the tourism sector has been one of the most adversely impacted over the past year as a result of the global pandemic that we are all grappling with. I thank all businesses in the sector that have worked incredibly hard over the past year to adapt, innovate, deal with the challenges they have been facing, and respond positively. Many have helped to support their communities in any number of ways, whether by providing housing for those who are homeless or by providing food for those who have needed it. Some hotels have provided accommodation for people being discharged from hospital. In any number of ways, the sector has helped our country get through the pandemic over the past 10 months or so. It is right that we recognise that and thank it for all it has done. The positive way that those businesses have responded is a great credit to them.

[Jim Shannon (Strangford) (DUP)]

In my constituency of Strangford, and particularly in my council area of Ards and North Down, domestic tourism is the key to the council’s economic growth for the future and the jobs that can be created. It spins off to bed and breakfasts, wedding venues, and the tourist attractions at Strangford lough. I am very fortunate to live at the very edge of Strangford lough, so I know the beauty of it. I challenge the hon. Gentleman to say whose constituency is the most beautiful. I will just say this: domestic tourism is so important to my area, and to the whole United Kingdom. I support his debate, and I am looking for a really good answer from the Minister.

[Steve Double]

I thank the hon. Gentleman for his intervention. No one could ever doubt his enthusiasm for representing his constituency in many ways. He makes some great points about the reliance of his part of the world on tourism; Cornwall has that same reliance. One of the key things about our tourism industry is that it supports many of the poorest and most deprived parts of our country. Many of our coastal areas, which struggle economically in many ways, rely heavily on tourism. I will come back to that later in the debate.

I place on the record my thanks to the Minister. I am delighted that he is here to respond, because he has been incredibly accessible and responsive over the last year in his role as Minister with responsibility for tourism. He came to Cornwall in the summer; it was great to see him. Businesses there were very grateful, and spoke about how highly he is regarded in the sector for the way that he has engaged with and been accessible to businesses up and down the country.

The Government have provided unprecedented support to businesses in the tourism and hospitality sectors through grants, the furlough scheme, the VAT cut, which was hugely welcome for the sector, the eat out to help out scheme and Government-backed loans. Those schemes have all been absolutely essential in helping businesses to get through the pandemic, and have been warmly welcomed by businesses. We should acknowledge the recent announcement of a further round of Treasury grants. That is absolutely crucial to ensure that businesses get through the current lockdown.

The Minister will be aware that many businesses still face huge challenges despite all the support that the Government have provided. They face what is now commonly called the “three-winter scenario”: businesses that rely on seasonal tourism did not make as much money as usual in last year’s summer season, and now face another very difficult winter. It is absolutely essential that the Government do everything that they can to ensure that all viable businesses survive this period. After we have put so much support into those businesses, it would be a tragedy to see them fail, just as we are hoping that our country can return to some sort of normality and that the tourism sector can reopen.

It is absolutely essential that we do all that we can to ensure that businesses get through this period. I know that many of these things are not the Minister’s responsibility, but I urge him to work with the Treasury to look at what further support we can provide.

[Steve Double]

I am grateful to my hon. Friend for his intervention. I was about to make that point: despite all the support that the Government have provided, parts of the sector, such as self-catering, events and weddings, have fallen through the gaps, and it is important that we look at what we can do for them.

The wedding industry is absolutely crucial to many hotels and other attractions in the tourism sector, because it provides good income outside the peak season—they have lost all that income in the last year. We also need to bear in mind that a wedding cannot normally be planned in just a few days. Once we are able to reopen the sector, it will still be weeks and months before those businesses’ incomes are built back up, as people are not booking weddings at the moment because of the uncertainty; they will be booking them in many months’ time. Businesses will not open their doors and suddenly see the revenue flow back in overnight. It is important that we look at what we can do for some of those sectors.

I also place on the record the impact that some of the very sudden changes have had on the sector. In Cornwall, we went from tier 2 to tier 3 on 30 December. Although I absolutely understand and support the need to take that decision to protect public health, it had a huge impact for many hotels—which were expecting to be booked up for new year’s eve and had stocked their fridges and bars for that—to suddenly find, with just a few hours’ notice, that they would have to shut. The impact was not just in terms of the lost revenue, but the wasted stock they had already purchased and were then unable to sell on. I am not sure that the impact of those sudden changes has always been reflected in the support that the Government have made available.

If grants are provided to retailers which perhaps sell clothes, then in six or eight weeks’ time, when they may be able to reopen, those clothes will still be there to sell. Restaurants or hotels that have stocked their fridges and must then dispose of all that stock are in a very different position from that of a retail outlet, but the grants that are given are pretty much the same; that difference has not always been reflected.

[Jim Shannon]

The hon. Gentleman is right about the impact on the hospitality sector, particularly on the restaurants and cafés that were preparing for the new year. Does he accept that there is not only a financial loss for all the preparations they have done, but a psychological disadvantage? Sometimes the ups and downs—the topsy-turvy way that things are happening—have an effect upon them mentally.

[Steve Double]

The hon. Gentleman is right that the impact of this for businesses is not just financial—although how important that is—but emotional and mental. However, hope is on the horizon with the rollout of the vaccine. I place on record my thanks to all those who are working so hard to get this vaccine into the arms of people up and down the country. We can now see light at the end of the tunnel. We know that this pandemic will come to an end in the coming months.

It is vital that we ensure that all those businesses in the tourism sector can not only reopen, but be in a position to make the most of the coming months, because there is huge pent-up demand for holidays and for days and nights out. It is not just about the economic recovery; it is about the social, emotional and mental recovery of our country as well—being able to do all those things that we have missed for the last year.

The tourism sector will be vital in helping our country achieve that because, as much as we want to see the travel industry also recovering, and people taking overseas holidays, the reality is that it will probably be some time before that happens. UK residents may be nervous of booking overseas trips. I also think it will take a while for that part of the industry to recover, so the opportunity for staycation holidays next summer will be huge. It is very important that our businesses can make the most of that.

The challenge that many of those businesses are facing is working capital. Although they may be able to open, unless they have the working capital to invest, buy stock, take on staff and make themselves ready to take advantage of the coming months, they will not be able to lead our recovery in the way we would like. There are a few things that it will be very important for us to look at doing to ensure that those businesses can open their doors and be in a place to make the most of the coming months.

First, we should look to extend the business rates holiday, which has been hugely welcome. If we expect those businesses to start to pay full business rates in April, just as they will possibly be able to start to reopen, it will put a huge strain on their cash flow and their working capital. There is a very good case to be made for extending the business rates holiday for the next year, or at least another six months, to enable those businesses to build up some working capital.

The VAT cut has also been hugely welcomed by the sector. Again, if we expect businesses to start paying VAT just as they are looking to reopen, it will limit their ability to make the most of the months ahead. I would like to see VAT on tourism and hospitality cut permanently, but at the very least there is a case for extending the VAT cut for another six months to enable those businesses to build up the working capital they will need to make the most of the opportunities this year.

Thirdly, we should looking at extending the repayment terms for the loans that the Government have backed. Many business people took them out months ago, in May or June, and they will have to start repaying them just when they need that cash to invest in enabling their businesses to reopen.

We need to look at extending those three things to ensure that businesses do not just survive through the coming weeks, but are then able to make the very most of the opportunity that the coming months will present to them. As we do so, there is an opportunity to use this moment; I use the term advisedly, because one of the Labour Front Bench team used it in a slightly different way, but we should not waste this crisis.

This crisis has brought the tourism and hospitality industry more into focus. People are much more aware of its importance in our country, and that cannot be a bad thing. We need to look at what we can do to make the most of the recovery from this crisis, so that we have a thriving tourism industry—particularly domestic tourism—for many years to come.

There are a few things we should look at doing. First, I would like to see us make the very most of the tourism sector deal; it is very welcome, but it can be beefed up. There is more that can be done, and maybe as part of that deal we need to look at some sort of tourism recovery fund to invest in the sector. We need to come forward with the tourism zones, and I would like to make the case to the Minister that Cornwall, or at least the south-west, should be one of the first areas to get that recognition and the support that goes with it.

Secondly, we need to better market UK tourism, both internationally and within the UK market. There is a case for more support to invest in destination marketing organisations; they have had a really tough time, but they will be absolutely crucial to the future of the sector.

Thirdly, we must ensure that the sector has the workforce it needs; with our ending of the free movement of people, which I absolutely agree with and accept, we need to promote jobs within the sector as good career opportunities. I would make the case for bringing forward the T-level in catering and hospitality as soon as possible, to ensure that the sector has staff with the skills that they will need.

To sum up, there is no doubt that our domestic tourism industry has had a tough time and been hugely affected over the past year, but it is in a good position, with Government support, to recover quickly and to play a crucial role in helping our nation recover from this pandemic. I also believe it will be absolutely essential to the Government’s achieving their ambitions for their levelling-up agenda that our tourism sector recovers as quickly as possible. I ask the Government, through the Minister, to look again at what we can do to continue to support the sector through the coming months, to ensure that it is in the best possible place to lead our recovery.