Tourism

Lord Lee of Trafford Excerpts

Wednesday 24th April 2013 Grand Committee

Asked By

[Lord Lee of Trafford]

To ask Her Majesty’s Government what plans they have to maximise tourism potential in the United Kingdom.

[Lord Lee of Trafford]

My Lords, I am delighted to lead today’s debate on maximising tourism’s potential. I think I am right in saying that it is just over two years since we had a debate on tourism in the House of Lords. It is a particular pleasure for me to see that the debate will be replied to by my noble friend Lord Gardiner of Kimble. I know from private discussions I have had with him just how committed he is to the tourism industry. We wish him well in climbing the greasy pole so that he is able to influence policy to an even greater extent in the future. I also welcome so many colleagues who have a particular interest in tourism.

First, I declare an interest as the chairman of the Association of Leading Visitor Attractions. The association comprises 50 members, all of whom attract more than 1 million visitors a year, and we now have seven members in Scotland. Globally, tourism is probably the world’s largest growth industry, with a huge potential. At present, something like 20% of the residents of the United States, 34% of French residents and 13% of Japanese residents take holidays abroad. In China the comparative figure is only 4.3%, while in Brazil it is 2.7%, and India 1.2%. One can see the huge potential that is to come. In the United Kingdom, tourism is our sixth-largest industry, with a turnover of £134 billion, providing 2.7 million jobs, which represents 9.1% of the workforce. Over a third of all the new jobs created in the past year—180,000—were actually created in tourism. The beauty of the tourism industry in terms of employment is that it is capable of taking in both unskilled and very highly skilled workers.

However, against this international and national backdrop, successive Governments and politicians have repeatedly failed to take tourism seriously. I believe that it is the number one industry in more parliamentary constituencies than any other individual industry. Yet, in the 2010 election, not one word was said about tourism in any of the three major parties’ manifestos. We have the occasional speech supporting tourism by the Prime Minister of the day, and there it ends, with little follow-through. Until the Prime Minister and the Chancellor of the Exchequer really get the message on tourism and drive policy forward as a priority, little is likely to change. We also need much greater co-ordination across government. Too many messages and actions are negative and there are too many restrictive barriers.

Specifically, tourism is not mentioned in the title of the Department for Culture, Media and Sport. Funding for VisitBritain and VisitEngland has been steadily reduced, and there is a threat to reduce it even further. Today, I gather that in a speech made at the British Museum, the Secretary of State queried the economic benefits of the arts. The chairmanship of VisitBritain is seen as a job that takes six days a month. That is quite ridiculous, given the size and scale of our industry. On value added tax, out of 27 EU countries, the United Kingdom is one of only four—and the only major tourism destination—to charge full-rate VAT on accommodation. Independent studies have shown that reducing VAT to 5% would create 80,000 new jobs and generate an additional £2.6 billion for the Treasury.

Ireland has successfully boosted its tourism industry by reducing VAT and abolishing air passenger duty. We had a separate debate on this a few weeks ago. Since 2007, air passenger duty has been increased by 360%, which means that for a Chinese family of four wanting to visit the United Kingdom, the duty would be something like £368. On visas, although there has been a modest improvement, the procedures are still expensive and burdensome, particularly for Chinese visitors. It is hardly surprising that France has been attracting something like six times as many visitors as we have. Moreover, there were the recent comments by the Home Secretary on possible changes with regard to visas for Brazil, which have not been seen to be helpful. I believe that we will have an Oral Question in the House on this matter tomorrow. With regard to airports, despite the urgent need for new runway capacity in the south-east, the Davies commission’s report has been long-grassed until after the next election. The package travel directive puts onerous requirements on small businesses and needs to be substantially amended.

Despite overwhelming arguments that a move to double summer time, allowing greater daylight activity, would significantly boost tourism and, of course, road safety, no Government seem to have the will to take action. Regionally, the demise of the RDAs has seriously reduced funding for destination management organisations, for tourism skills training and, of course, for catalyst pump-priming support for major tourism initiatives and projects. The allocation from the regional growth fund falls well short of being an adequate replacement.

I ask my party, and others advocating a mansion tax, whether they have really thought through the implications. The owners of historical properties, many of whom are already under severe cash pressure regarding repairs and renewals, could be faced with very severe additional annual burdens; for example, with a £5 million historic property, 1% on the value over £2 million would result in a £30,000 a year extra charge. Where is that cash going to come from?

Our visitor economy in the United Kingdom is made up of a cornucopia of riches: our historical heritage, our industrial heritage, our great museums and galleries with their crowd-drawing exhibitions, our beautiful and varied countryside, our resorts, and our creative industries such as our theatres and our music. We also have a worldwide reputation for staging great ceremonial events such as the Olympics and the Diamond Jubilee last year, the royal wedding and, more recently, the funeral of Lady Thatcher. All these have given a massive boost to London. Specifically, the royal wedding at Westminster Abbey increased visitor numbers there sixfold. It is still benefiting from that exposure, and I would expect St Paul’s also to have a considerable boost to its visitor figures. Yes, we have a successful tourism industry, but we could do so much better.