UK Economy: Tourism

Lord Lee of Trafford Excerpts

Thursday 20th November 2014 Lords Chamber

Asked by

[Lord Lee of Trafford]

To ask Her Majesty’s Government what assessment they have made of the impact of tourism on the United Kingdom economy.

[Lord Lee of Trafford (LD)]

I beg leave to ask the Question standing in my name on the Order Paper, and in doing so declare an interest as chairman of the Association of Leading Visitor Attractions.

[Lord Gardiner of Kimble (Con)]

My Lords, tourism is a major part of the UK economy. Deloitte estimates that it will contribute £61.1 billion directly to the economy this year, supporting nearly 1.8 million jobs. This rises to £133.6 billion and 3.15 million jobs when indirect impacts on the wider economy are included. Tourism is central to our plans for growth and we are working with the sector to achieve this.

[Lord Lee of Trafford]

My Lords, national tourism policy is to boost tourism in and to the regions. However, the way that air passenger duty is imposed runs counter to this. It is a flat tax, the only differential being between different classes of travel. Thus, if flying a national carrier, business class, London to Moscow return, air passenger duty represents only 2% of the total cost of the fare plus APD, whereas flying a budget carrier, London to Glasgow return, finds APD equating to 87% of the total cost. Is not this a nonsense, and will my noble friend urge his Treasury colleagues to look at the way in which APD is levied if we really want to encourage and boost regional tourism?

[Lord Gardiner of Kimble]

My Lords, obviously the first thing I must say is that matters of taxation are for the Chancellor; the Treasury continually reviews all taxation matters. I understand my noble friend’s point about percentages, but the band A rate is £13 and is going to remain that for four years. I do not think it is a considerable sum but it does, in total, contribute nearly £3 billion to the Treasury.