Tourism

Lord Bilimoria Excerpts

Wednesday 24th April 2013 Grand Committee

[Lord Bilimoria]

My Lords, Britain is a tourism paradise, in spite of our weather. As we have heard, tourism contributes more than £115 billion to the economy, represents 9% of our economy, and supports nearly 3 million jobs. I thank the noble Lord, Lord Lee, for proposing this debate and for making the important point that we do not take tourism seriously enough. It does not get the credit that it is due or the priority that it deserves. We have dropped from sixth to 11th place in the latest WEF travel and tourism report in terms of tourism competitiveness. We are the sixth most visited destination in the world, but we are losing market share.

Yet we have everything. As we have heard from the noble Lord, Lord Lee, we have the Royal Family, museums, music, theatre, London, the countryside, the arts and sport—you name it. However, the Eiffel Tower in Paris is the most photographed building in the world, while the second most photographed is right here—the Houses of Parliament. Why is that? I agree that we need to do something about infrastructure. Can the Minister say when we are going to do something about our airports, perhaps by providing a third runway at Heathrow and probably the estuary airport as well? It is not a question of either/or; we desperately need both.

However, the main reason that Paris gets more visitors than London is visas, as every survey states. The main reason for that is that Europe has the European Union’s Schengen visa and we do not belong to Schengen. Why is that? It is because we want to maintain our own border controls. Is that not a joke? We are incapable of maintaining our border controls. We do not even know how many illegal immigrants there are. The UK Border Agency has just been disbanded because it was not fit for purpose. We still do not have exit checks for people leaving this country. Can the Minister say when we are going to institute exit checks to keep control of our borders? With Schengen, one visa covers 25 countries, while here there is one visa for only the UK and Ireland. The single visa for 25 countries covers 85% of Europe’s population and GDP. We are worried about security and asylum seekers, but illegal immigrants do not hold Schengen visas. They do not have any visas. The Centre for European Policy Studies has written an excellent report on the issue.

We are losing out in this area. Figures on the number of UK visas issued over the past five years have remained stagnant at 2 million, while Schengen visas over the five-year period to 2010 have increased from 8 million to 12 million, an increase of 50%. I do not understand this. The cost of a Schengen visa for 25 countries is cheaper than the price of one of our short-term visas for the UK and Ireland. We are part of the Schengen co-operation on matters of criminality, so why do we not bite the bullet and join the Schengen scheme before it is too late? The iron structure in Paris will then not be the number one most photographed structure in the world; this building will be.

--- Later in debate ---

[Lord Gardiner of Kimble]

My Lords, I congratulate my noble friend Lord Lee of Trafford on securing this debate and acknowledge the wide-ranging and, I may say, formidable expertise. It is very good to see my noble friend Lord Montagu in his place today as a very distinguished former chairman of English Heritage.

The Government recognise that tourism is vitally important for the future of the UK’s economy. The noble Lord, Lord Stevenson of Balmacara, referred to it as the sixth largest industry, but I think it might be the fifth largest, and the third largest export earner. I say to the noble Baroness, Lady Liddell, that it really is central to the Government’s strategy for growth for all the reasons that I hope I can unfold.

Tourism drives investment and, along with the hospitality industry, directly supports over 1.4 million full-time and more than 1 million part-time jobs. The tourism sector provides opportunities for employment, develops valuable skills and offers a real career in the private sector across all the regions. I was pleased that my noble friend Lord Roberts of Llandudno and the noble Lord, Lord Gordon of Strathblane, referred to this. Indeed, tourism may well become our fastest growing sector over the next decade.

The Government’s tourism strategy published in 2011 focuses on delivering a first-class welcome for visitors and providing a high-quality product. The Government want to create the right conditions for tourism to be an engine of growth by removing unnecessary barriers. I was particularly mindful of the comments of the noble Lords, Lord Stevenson of Balmacara and Lord Faulkner of Worcester, on regulation. We are grateful to the Tourism Regulation Taskforce for preparing its recommendations, and DCMS continues to work across Whitehall to deliver changes wherever possible.

Noble Lords have referred to changes in daylight hours, and I am mindful that the noble Lord, Lord Tanlaw, has expressed a certain view. I am also mindful that the noble Baroness, Lady Liddell, referred to Scotland. The point has very much been put to me that we need to try to develop consensus on this matter so that the whole of the United Kingdom feels comfortable about it.

My noble friend Lord Lee and the noble Baroness, Lady Valentine, mentioned air passenger duty. This is a matter, as has already been suggested, for the Treasury. However, we cannot look at this in isolation because we must remember that other countries levy a variety of tourist taxes that this country does not. Furthermore, air passenger duty provided £2.6 billion to the Treasury in 2011-12. We need to very careful and cautious as it would be difficult to forgo this revenue without making cuts in other areas. The matter of VAT, which was also raised, has been examined by the Treasury. I refer to the significant VAT release for cultural attractions and public transport which are not available in different countries.

We have a world-class tourism product. Our towns, villages, cities, coastline and countryside, alongside our heritage, culture and shops, are exceptional. Being a gardener by name and by nature, I was of course delighted that my noble friends Lord Arran and Lord Glasgow referred to the glorious gardens of the west and more generally. We have some wonderful heritage in our historic houses and many other places, as well as our industrial heritage. I was delighted that the noble Lord, Lord Faulkner of Worcester, referred in particular to our railway heritage. I was also mindful of my noble friend Lady Bottomley speaking so powerfully and passionately about the interests of Hull, and I wish that great city well in its quest for the status of City of Culture 2017.

The number of people crossing international borders passed the 1 billion mark for the first time late last year. The tourism market is growing. The US and Europe remain our biggest source of visitors, but we must capitalise on the increasing number of people travelling from new markets. My noble friend Lord Lee and, indeed, the noble Baroness, Lady Valentine, referred to this. I specifically mention China. While we are already seeing a significant increase in the number of visitors from China—an increase of 20% in 2012— we must not underestimate the opportunity. By 2030, China will have 1.4 billion affluent consumers, which is a number greater than America and western Europe combined. Tourism must continue to adapt to attract and retain these important markets, and we must recognise that the Government will play their part. I am very mindful also of the point referred to by the noble Lord, Lord Bilimoria. We have introduced specific improvements for Chinese and Indian visas, which came into effect at the beginning of this month. It has been reported on Chinese television that 94% of Chinese visitors who apply for a visa are now successful, while 96% of applicants say that they are satisfied with the service they receive. We are also improving our aviation connectivity with China. For example, the UK has a new route to Chengdu. Improvements to our visa regime mean that targets to deliver 90% of applications online by December were exceeded, and at present over 90% of applications are online. We are also looking at Brazil, Russia, India and other emerging markets.

Through VisitBritain, the Government are investing £50 million in a £100 million four-year marketing campaign. I want particularly to acknowledge the work of VisitBritain and I am delighted also—

[Lord Bilimoria]

The noble Lord mentioned that 90% of visa applications from China and India are now being processed, but what about all those who do not even apply because we are not in the Schengen system? We are missing out on all of them. That is the point I was making.

[Lord Gardiner of Kimble]

I understand, but I am very short of time and I do not think I dare take any more interventions or I will not complete what I need to say.

I want to refer to the work of the noble Baroness, Lady Liddell, as a non-executive board member of VisitBritain. In addition, tourism also benefits from the GREAT campaign, which was given a £30 million boost for 2013-14. It targets not only our highest value inward investment destinations such as the USA and Brazil, but in 2013 it will focus on China. By 2015, all these investments aim to deliver an additional 4.6 million visitors and an additional £2.3 billion visitor spend, along with the creation of almost 60,000 new job opportunities. Recent figures show that we are on track to meet these targets. To date, direct government investment in tourism campaigns has totalled just over £70 million. In the first year alone, VisitBritain’s campaign has delivered £503 million in incremental spend for the financial year 2011-12 against a target of £373 million.

While London is an important gateway to the country, we market all the wonderful destinations across the UK. England, Scotland, Wales and Northern Ireland are all represented on the VisitBritain board, and the GREAT campaign provides the overarching framework for the promotion of the whole of the UK. I am mindful of the views expressed by the noble Lord, Lord Gordon of Strathblane, on Scotland’s continuing potential.

Last year, we used the Olympic Games to generate worldwide coverage of Britain’s attractions. This strategy resulted in 14,000 positive print and broadcast stories in the world’s media during the first six months of 2012, the equivalent of over £1.5 billion in advertising. We believe that these measures will offer real benefits to the sector. VisitBritain projects that the industry will achieve 33% growth in the number of international visits by 2020, up from 30 million to 40 million a year.

Domestic tourism is also a hugely important market, worth some 80% of tourism receipts. It has seen a significant increase, with 5.8% more being spent on domestic holidays in Britain last year. VisitEngland’s £25 million marketing campaign is expected to deliver an additional £500 million in consumer spending between 2011 and 2015. Recent figures show that this is working: in the eight-month period from early March to the end of October last year, VisitEngland activity generated incremental spend of almost £300 million. Furthermore, 56% of Britons plan to take a holiday or break at home over the next year.

VisitEngland has also received nearly £20 million from BIS and the skills regional growth fund for its Growing Tourism Locally programme. This will lead to the creation of about 9,100 indirect job opportunities. VisitEngland is also working with local tourism bodies and businesses to develop strong private sector leadership and better links with local enterprise partnerships; 150 destination management organisations have been created so far. The Government are also working with People 1st, the tourism sector skills council, to give people looking for work the skills to find it and to improve capacity and productivity.

Tourism is central to our plans for growth. The Government and the industry are working together and this is bearing fruit. February 2013 saw a 14% increase in the number of visits over the previous year, the highest increase since 2008. Recent findings from the Anholt-GfK Roper Nation Brands Index saw us move three places from 12th to ninth in terms of international perceptions of the UK welcome, which I particularly hope will be welcome to the noble Baroness, Lady Valentine. However, we must do more. The tourism industry is highly competitive and we cannot afford to be complacent.

Tourism is a top priority for the Government. We have a great country with world-class tourism to offer and we must continue to market it effectively. The Culture Secretary and the Minister of State for Sport and Tourism are working with colleagues in the Home Office, BIS, the FCO and across government, as well as with committed private sector partners, to ensure that we capitalise on our potential, about which my noble friend Lord Lee spoke powerfully. We may not be able to fix the weather but we do have the opportunity to create a positive environment for tourism to prosper.