Lord Harrison
Main Page: Lord Harrison (Labour - Life peer)Tourism and Hospitality
Lord Harrison Excerpts
Lord Harrison
To move that this House takes note of the contribution of the tourism and hospitality industries to economic growth in the United Kingdom and the European Union.
Lord Harrison (Lab)
My Lords, tourism means jobs. That was the title of a pamphlet I wrote as an MEP 20 years ago. Its driving thesis has changed little. If anything, its central point has intensified as unemployment, especially youth unemployment, now stalks a new generation of jobseekers in Britain and across the European Union.
I suggested then that, in the PM’s current favourite expression, politicians “don’t get” tourism. There is a complacent belief that as tourism is a successful industry it does not need help when, instead, we should have bold ambition to increase the UK’s market share, currently standing globally at 3.5%. Tourism is a diffuse industry, scattered over many venues, enterprises and activities, and it is assumed that it will look after itself. By contrast, the car industry for instance, which my noble friend Lord Mandelson helped a few years ago, has a higher profile than tourism although it supports many fewer jobs. The view that tourism is a low-skill industry with uninteresting, poorly paid jobs is misguided. The indolent attitude that no one goes to university to study tourism—and that if they do it is to Oxford Brookes rather than Oxford University—is the kind of a cultural snobbism that ill behoves us in the 21st century.
I have elsewhere debated the very real contribution that the UK’s arts and culture make to tourism but why, oh why, do we leave the tourism and hospitality industries to recline, repine and decline in DCMS, which does not even have the grace to reflect tourism’s concerns in its name? My first question to the Minister is: did his brief come solely from DCMS or did he consult widely with BIS, the Treasury and the numerous other departments which have a fat finger in the ever-growing pie of the tourism and hospitality industries? Will the department finally consider including tourism, its biggest industry, in its title? Many of these cobwebbed myths need to be blown away. I hope that this afternoon’s debate will provide an exhalation and an exhortation, because tourism indeed means jobs.
The UK tourism industry employs 3.1 million people. The sector is Britain’s third-largest employer, sustaining one in 10 jobs. It is Britain’s fastest-growing sector. One in three of all new jobs comes from tourism. It supports a quarter of a million businesses. Most are small businesses—indeed, many are microbusinesses. Seven out of 10 of them employ fewer than 10 employees. Disappointingly, the Government’s otherwise welcome Bill on small businesses fails to acknowledge the particular potential of tourism’s small firms. The Government might have had the wit and imagination to introduce a tourism Bill instead of sending us in this House on ever-extended holidays.
It is no surprise to learn that it was the 1964 Labour Government who pioneered the first tourism Act. Will the Government do anything specifically to help tourism in the small businesses Bill? Will the Minister be so bold as to introduce, 50 years on, a new tourism Bill to help the industry? The tourism and hospitality industries employ one in two part-timers, mainly women, 50% more young people under 30 than other industries, and significantly more employees from minority communities—all groups suffering from this Government’s careless decision to contract the economy.
What should be in any new tourism and hospitality Bill? First, VAT. The 2013 study by the World Economic Forum on international competitiveness shows that the United Kingdom now ranks 138th out of 140 countries on price competitiveness. The chief culprits are air passenger duty and VAT. We charge the full 20% VAT on accommodation, where the average charge of our competitors throughout the European Union is half that. We apply a full rate on restaurant meals and on admissions to cultural attractions and amusement parks. I am not amused—especially given that research done by Deloitte has shown that reducing VAT on those items to 5% would boost GDP by £4 billion per annum, create 80,000 new jobs over three years and deliver an extra £2.6 billion to the Exchequer over the next decade.
Why are Her Majesty's Government so deaf to the cost of living of tourists in the United Kingdom when a change in VAT would bring the returns that I have outlined using the Treasury’s computable general equilibrium model? Do the Government “get” that inward tourism should be understood as part of our export drive? Our faltering export drive badly needs help from the tourism industry. Why do the Government hesitate to pluck the low-hanging fruit of tourism and its offer of jobs?
The self-inflicted folly of air passenger duty means that a visiting family of four from China or India, flying economy class, are supercharged coming into this country by £340 as of April this year. Research by PwC has shown that abolishing APD would boost the UK’s GDP by 0.5% in the first year alone, create 60,000 jobs and generate a further £500 million of revenue from other consequential and related taxation. The recent decision to eliminate bands C and D of APD is a welcome but small relief to the industry. If the Government refuse to cancel air passenger duty, would they at least look at removing it for children under 16—the effect of which would be to encourage family travel into the UK? I repeat: why are this Government so reluctant to help inbound tourists and families with their cost of living?
Others will doubtless comment today on the Prime Minister’s lack of concern over the availability of UK passports for holidaymakers leaving these shores. However, this brings me to the vexed question that I wanted to ask about visas. A UK short-stay visa costs £83 compared to £50 for a Schengen visa, which permits visitors access to some 25 European Union or EEA countries—to their tourism industries’ complete and distinct competitive advantage. Visitors from visa-requiring nations account for some 10% of all the 3.2 million visitors to the UK annually and generate some £4 billion in revenue, due to their visitor spend being double the average. To give a positive example, since the 2009 decision to give Taiwanese visitors visa-free entry into the United Kingdom, their spend has grown by 62% from a 43% growth in their numbers. By contrast, visa requirements imposed on South African nationals have cut their numbers by 23%.
Most astonishing of all, the number of Chinese visitors to the United Kingdom has grown by a slender 36,000 out of 42 million outbound Chinese tourists as a whole. Why so few? The Government have made some cautious steps to deal with the difficulties of encouraging Chinese visitors, who are currently required to fill in two visas to visit Europe—one for the UK and the other for Schengen. However, can the Government confirm whether the Home Office will renew the trial of using approved tour operators based in China, which has helped reduce red tape? Can the Minister also address the discrepancy between the international passenger survey figures, which show a 13% increase in Chinese visitors to the UK, and those offered by the Home Office for the same period, which show an increase of some 40% in processed visa applications from China?
Can the Minister also assure us that Home Office figures will be released without the current nine-month delay that is, frustratingly, being experienced? We urgently need real-time border admissions data to help the tourism industry prepare and plan. Moreover, what is going wrong in Russia, where a change of service provider for visas has led to poor service, delays and cancelled trips? Can he also elaborate on the welcome decision to set up a tourism council, as announced at the BHA’s recent hospitality summit? What will that do and will it have any funds?
Many years ago, I was the first tourism chair for Cheshire County Council and a deputy chair of the North West Tourist Board. However, in recent years, the ability of local authorities to help their local tourism and hospitality industries has been ruthlessly cut, and the abolition of the RDAs has removed a further £60 million from the agents of regional tourism development. Can the Minister give any idea of how the LEPs are meant to fill this role and how they might develop local marketing campaigns with ever-reducing resources? What are HMG doing to spread the benefits of tourism throughout the nation and regions? As Hull, the capital of culture, has proved—as Liverpool did before it in 2008—tourism can spread its proven benefits of jobs and growth to the regions, thus complementing London.
Given the multifaceted nature of tourism, I would like to hear from the Government about how they plan to nurture changing forms of tourism such as agritourism and ecotourism, or hands-on tourism associated with, say, archaeological digs. As I learnt from the Tourism Society, the tourism trend is that one in 10 of us as grandparents will have responsibility for our grandchildren on holiday. This change needs to be reflected.
Had I but world enough, and time, I would also ask for updates on education and training for the many rewarding jobs and apprenticeships for our young people. I am also interested in the Government’s plans to reinforce minimum wage rates in these industries, and ask whether they will move to the living wage as standard.
I will say a few words about Britain’s engagement with the European Union and about Europe’s challenge to maintain its position as the world’s top visitor destination. Does the Minister accept that tourism and travel are the quintessential single-market industries? The ambition to sweep away the tiresome red tape of 28 countries is worthy ground on which we should participate to make ourselves much more competitive. Does the Minister agree that loose talk of leaving the European Union costs jobs? Given that we already stand outside Schengen and the euro, we simply cannot afford to absent ourselves from the fray of maintaining and sharpening our competitive edge, especially at a time when Lithuania is joining the euro and Lech Walesa in Poland has called for Poland to do the same.
It is partly our attitude to the European Union that will guide our future and the future of the tourism industries, but we will need to make an effort in that regard. It will be a folly beyond words if we try to have a referendum on the subject in the year 2017 when we will be assuming the British presidency of the European Union. With that, I conclude.
Lord Harrison
My Lords, I note the Minister’s ambition to give fuller and more complete answers than he has given hitherto. In response to my noble friend Lady Billingham, I shall also make an effort to speak up. In response to the noble Lord, Lord Lee, who suggested that I might consider the profession of toastmaster, I would like to toast all those who contributed so interestingly and helpfully to this debate on tourism and hospitality.
I shall make two final points. I was asked by my noble friend Lady Billingham to think about sport. Yesterday I was contacted by the other Lord’s to ask whether I would note in this debate that the first test match is taking place. Lord’s then gave me the figures of the jobs associated with inward tourism because of cricket and the cricket matches we hold in this country.
My final point is to advertise a debate I hope to hold under a Question for Short Debate on the vitality of markets—not just in market towns but elsewhere throughout the country. Every year my wife and I every year plot a course not only to the art galleries we like to see around the country, but to the markets—last year it was Beverley and Leeds—that we visit on our way home. I hope that that debate will be later in the winter.
In conclusion, I thank all who contributed today. There is so much more to be said and I believe that this is the right place to say it.