Business, Energy and Industrial Strategy: Departmental Spending

Liz Saville Roberts Excerpts

Tuesday 7th July 2020 Commons Chamber

[Liz Saville Roberts (Dwyfor Meirionnydd) (PC)]

Diolch yn fawr Madam Ddirprwy Lefarydd. It is undeniable that the covid-19 pandemic has slammed the brakes on economic activity across the board, but few sectors have taken so severe a shock as tourism. Why? At least half of the income-generating season is now irretrievably lost. In Wales, around 144,000 people are employed in the tourism sector. Coming out of lockdown is essential for many, many communities. While the level of Government support has been so far unprecedented, the impact on the Welsh tourism industry looks set to be long lasting.

The Welsh Government tourism barometer carried out a survey of firms between 22 April and 1 May indicating that the tourism sector experienced an average drop in revenue of 20%. The same survey revealed that 70% of Welsh firms have put at least one worker on furlough— 70% of Welsh firms. In the north, the figure was 80%, probably reflecting the higher reliance on tourism and hospitality in our region. Without additional support, I fear that the clock is ticking on an unprecedented unemployment crisis in regions that have become increasingly reliant on tourism and hospitality.

The first signs of the crisis can already be seen in universal credit and jobseeker’s allowance numbers. Office for National Statistics figures from this spring show an increase of 24% in people claiming unemployment benefits in my constituency of Dwyfor Meirionnydd. For the tourism sector to flourish long term, we need sustained Government intervention and a new approach to ensure that tourism can contribute to reinvigorating our rural and coastal communities.

I urged the Government this week to commit to paying tourism and hospitality employers’ national insurance contributions, as well as increasing the threshold at which national insurance contributions are paid. We also need a temporary VAT cut for both hospitality and tourism, allowing for targeted stimulus for the sectors that most need support. Many in this House have used EU rules on VAT to argue the case for Brexit, but this is one area where flexibility already exists. There is a dispensation for a lower rate—say between 5% and 15%—and frankly it is shocking that the UK has not already reduced VAT for tourism activities when every other country in the EU except Denmark has done so.

My constituency is the proud home of a total of six heritage railways. Across the UK, heritage railways employ 4,000 paid staff alongside 22,000 volunteers, and they attract 13 million visitors. Social distancing requirements make it difficult to run cost-effective timetables, and heritage railways are calling primarily for an extension of the furlough scheme for key staff until spring 2021 in order to cope with the three-winter scenario. Anybody who is talking to anyone in the tourism sector will have talked about the three-winter scenario, and about how we can get businesses through when they are facing the prospect of no income whatsoever. That is particularly true for the heritage railway industry, and I am sure that the Government will be looking to ensure that those jewels in many areas of tourism are maintained into the future.

With our vast mountains and hills and our 870 miles of coastline path, Wales is ideally placed for socially distant tourism, but attracting tourists at any cost should not be our priority. Post covid, sustainable tourism can be a vehicle for supporting our cultural heritage as well as combating the multiple crises of our age: the climate emergency, loss of biodiversity, pollution, and social and economic inequalities. Out of this crisis, we have an opportunity to assess our tourism industry and its role within our economy, and I urge the Government to grasp this opportunity to create a future-proof model of tourism with sustainability at its heart.

[Several hon. Members rose—]