Tourism

Lord Stevenson of Balmacara Excerpts

Thursday 27th January 2011 Lords Chamber

[Lord Stevenson of Balmacara]

My Lords, I add my thanks to the noble Viscount, Lord Younger of Leckie, for securing this debate and for introducing it in such an interesting and informative way. He was able to draw out key points about the importance of tourism to our economy and illustrated them with some detailed factual information. A lot of the points that many other noble Lords picked up in their speeches make it clear that this is a vital part of our economy. He also pointed out the risks if we do not improve our offer. I cannot really agree with him about the clocks, although I know that that is not a very popular view, given that so many people have suggested that we should revisit this issue, because I come from Scotland, I lived through the earlier experiments and I did not like them. I encourage everyone to join the new campaign to bring back high tea, which is clearly the answer to a lot of our problems. The noble Viscount and I are on opposite sides of the debate today although, in truth, we are not really very far apart in what we say. We share other interests in Scotland and in Buckinghamshire and agree about the need to preserve the Chilterns, which I regard as a beautiful area of the country that currently has much to offer foreign and domestic tourists.

It speaks volumes for the topic selected by the noble Viscount for our short debate today that it has attracted a very high number of speakers, including an amazing six maiden speeches, and has prompted the addition of half an hour to the debate, something that I have not seen since I joined the House. I join other noble Lords in congratulating those who have made excellent maiden speeches today. Having only recently given my own maiden speech, I know all too well the heady mixture of exhilaration and sheer terror that accompanies that event. However, as the noble Lord, Lord Wigley, said, it is a necessary part of the process. Indeed, once their maiden speech has been completed, noble Lords have access to all the important activities in the House in which they will play their part.

I enjoyed the use that the noble Baroness, Lady Wheatcroft, made of her journalistic background to inform the debate. Her experience of working in a pub will obviously play on some of the points made about employment and other things. The noble Lord, Lord Palmer of Childs Hill, opened our eyes to urban tourism, of which I had not heard. It is certainly interesting and, as he said, once one begins to dig into areas that might on the surface seem a little unlikely, they reveal riches of which we should all take advantage.

The noble Lord, Lord Stoneham, warned us not to inhale, but he also gave us important information about the new LEPs and their contribution to tourism. The noble Lord, Lord Marks of Henley-on-Thames, drew on his experience in Henley and Cornwall to bring out points about tourism. He made a valuable point about the dangers that will accompany the expenditure and support of the Olympic Games if the site is not maintained and carried forward. Those words were wisely made. The noble Lord, Lord Risby, told us—I think it was tongue in cheek, but we may never know—that as a result of a visit to the Isles of Scilly he might claim credit for starting the coalition, so we know who to blame.

In no sense do I want to diminish the debate for other noble Lords, but there were so many detailed points that I hope that the House will forgive me if I do not go through them one by one, but I will refer to them as I make the remainder of my remarks. The test of whether any debate in the Lords is a success is that, having read it, you feel that you have been informed and are up to date on every point that should bear on the issue in question. Today, we have amply exemplified that.

This has been a high-level debate with practitioners and two former Ministers, many of whom have direct experience of operating visitor attractions. It was good natured, good humoured, informative and competitive. I now have a long list of places that I really have to visit all around the United Kingdom, which have been compellingly argued for by noble Lords who have spoken. The debate was also celebratory of the best of Britain, which is what it should be.

Many noble Lords set out the key facts affecting the current economic contribution of tourism to the UK economy. I will not repeat them, but they are impressive. I should like to make two points about the way in which they have been brought out. First, on direct tourism, it is very interesting to reflect that the proportion of jobs in tourism varies across the United Kingdom. We find a far higher proportion of tourism-related jobs in Scotland, Wales, Northern Ireland and the periphery of England than we do in the centre.

Looking at the wider contribution that tourism makes to our economy, which many people have said is probably 8.9 per cent or 9 per cent of GDP, it is interesting that most of that seems to happen primarily, and has most effect, in rural areas. It employs a large number of part-time staff. Sometimes it is very difficult to find part-time work, which is often female dominated. It is often difficult for females to find jobs outside the city centres. It is also important that we should recognise that it encourages entrepreneurship through some 200,000 SMEs, although most of them have a very small turnover.

It is clearly an important industry with interesting characteristics. It has been described as invisible, which I hope will change now that the department has a Tourism Minister who clearly has the support of the Prime Minister and the Secretary of State. However, as several noble Lords have said, our tourism on offer suffers from the perception that it is not very well co-ordinated, is possibly not good value for money, has a variable quality—and it does not offer enough high teas, and is not responsive to our clients.

Because international tourism is a very competitive business these days, we are not doing so well in overseas markets, particularly in Asia. European competitors seem to do much better, and we must get to the bottom of why that is. However, as I have said before and as many noble Lords have said, we have a great deal to offer. We should not be shy in that and should not pretend that we have any difficulty in what we offer to people when they come.

However, there are barriers and problems. The industry is fragmented and there might be some significant market failures in information flows, marketing spend and co-ordination. There is a honey-pot effect in that 20 per cent of attractions appear to receive about 80 per cent of visits. I think that that might have been one of the points made by the noble Lord, Lord Palmer, whose wonderful house I have visited and who said that he had seen a decline in numbers over time. However, other visitor attractions seem to be doing well. Tourism is an industry with low wages, particularly because of part-time jobs. It certainly has poor training, partly because of short-termism, partly because there are no major players and partly because of poor industrial co-ordination.

As has been mentioned, there have been substantial grant support cuts amounting to 15 per cent over four years in the arts and heritage sectors, which of course drive tourism. There are sharp cuts in funding for VisitBritain and VisitEngland; I think the figure is 34 per cent by 2014-15. As the noble Lord, Lord Lee of Trafford, and the right reverend Prelate the Bishop of Hereford, said, the RDAs are being abolished, although there will be a regional growth fund worth £1.4 billion, which does have space for tourism and which the new local enterprise partnerships have to bid for.

In answer to a Question last year in this House, we were told that the Government estimated that the total spend on marketing in the tourism sector, both public and private, was around £240 million, although I expect it will be a lot less this year. Of course, this is an industry that has what is called the free rider effect. You cannot really expect so many local small businesses to do what is best funded and led by national or regional bodies.

There are opportunities. We have heard about the royal wedding, the Olympics and the Commonwealth Games as part of the decade of sport, and they must offer a ray of hope. As a British tourism study says, all these events provide a global opportunity to invite the world to visit Britain, and the Olympic Games alone have a potential tourism benefit of around £2.1 billion between now and 2017. Clearly, all of us want to ensure that that is realised.

Currently, the Government say that they are formulating their tourism policy. When she responds, perhaps the Minister will give us at least a trailer about what is in store. Let me end by posing her some questions about that in the hope that they might draw her out. Can she share with us when we are likely to see the tourism strategy? I read in the Prime Minister’s speech in August last year that it would be presented in October, but we have not seen it yet. Can she let us know what progress is being made in generating the fund for marketing and PR, a joint fund between the Government and the industry? Can she tell us whether any of the local enterprise partnerships have made significant bids for tourism projects to the regional growth fund? I gather that the closing date was 21 January, so perhaps we will be told about that. Has her department looked at VAT in the tourism sector and whether it will have an impact on the targets that have been set for the industry? Can she let us know a bit about the pressing need for fast internet access, which was referred to in a number of speeches? It is obviously necessary in rural areas if businesses are to get on to the internet and market their wares, but how will they do that without the infrastructure? Lastly, can she confirm that the necessary funding and organisational structures will be in place to ensure that the expected £2.1 billion of tourism benefits actually arise from the Olympic, Paralympic and Commonwealth Games?

To finish, VisitBritain said in its April report that:

“With right support tourism can be a growth industry for Britain”.

It sounds like a good idea, and if they are talking about £188 billion by 2020 and 250,000 new jobs, surely we want a share of that. It occurs to me that if there has to be a plan B for the economy, maybe the Minister and her department should make the case to the Chancellor that a slice of the £3 billion in tax receipts should be returned to her department as an investment fund that could then be deployed to support the tourism sector, something I am sure we would all support.