HC Deb 14 July 1954 vol 530 cc650-8

Motion made, and Question proposed, "That this House do now adjourn."—[Sir C. Drewe.]

12.55 a.m.

Mr. E. M. Cooper-Key (Hastings)

My object tonight is to raise certain points relating to the hotel and tourist industry, and to suggest some ways in which the Board of Trade and other Ministries can assist the solution of their difficulties. The hotel industry of this country, which includes the catering industry, is one of the largest. It employs about 750,000 workers and operates 18,000 high-class hotels suitable for tourists, 4,300 establishments offering medium-priced facilities and 49,000 boarding houses, operating, in all, about 1,250,000 beds.

The main problem today concerns good class hotels. These suffered very much since the war from two causes: the first, during the period of restrictions, and the second due to a decline in the home market because of the reduced spending power of the middle classes. It is true to say that every resort has lost at least one large good class hotel, and throughout the country in general it has been estimated that 10 per cent. of all good licensed accommodation has been lost. In London, although some rehabilitation has taken place, only one brand new hotel has been built since the war. If our tourist trade is to continue to expand at least 5,000 more hotel rooms of good standing will be needed in the main tourist centres within the next two years.

The value of the tourist industry is worthy of note. In 1937, which was the best pre-war period, 500,000 tourists visited this country. In 1953, 820,000 visited this country and this year rather more are expected. They spent in 1953 £126m. and, of this, £36m. came from United States and Canadian visitors alone. I suggest that we should compare this with the £32m. of total receipts from those countries of the dollar area from whisky and cars. The hotel industry provides one of the best dollar exports.

Compare our hotel accommodation with that of Western Europe. In almost every European country since the war a number of good class hotels have been built through the help of the State, or through funds available through Marshall Aid. In Austria, several millions of pounds have been set aside during the period of Marshall aid. In Denmark, by Act of Parliament, low rates of interest have been charged on loans, and in Italy, Norway, Sweden, Western Germany and Ireland loan facilities have been offered and grants made to hoteliers to build or improve hotels. My purpose is not to ask for any subsidies for this industry but that the matter should receive some very active consideration by the Departments concerned, in order that our hotel people' can meet the competition from Europe on equal terms.

The main problem of this industry is the unfavourable treatment which it has received at the hands of Whitehall since the war. I wish to cite two complaints. The first is that the industry pays Purchase Tax on what it calls its tools for the trade, its equipment, whereas manufacturing industries do not. Secondly, the hotel is treated as a domestic establishment from the point of view of taxation, depreciation and rates, and does not enjoy the reliefs from taxation which are granted to other industries.

Hotels and inns should be allowed to charge to revenue the cost of improvements made within the four walls without attracting the penalty of 10s. in the £ taxation. Some of the public rooms in our hotels are extremely dreary places, especially those in our industrial towns. I submit that hotels in this country should be the shop window and showroom for displaying our finest products of furniture, glass, china and carpets.

It is clear to countries in Europe which have had a long experience of this business that some State assistance is necessary if hotels are to maintain a service to overseas visitors. I think that a well thought out system of financial aid by way of low interest loans would profit the hotel industry, and, incidentally, the country, enormously.

While the tourist industry of visitors from overseas is expanding, the home trade is seriously contracting. It is an interesting social fact that only 50 per cent. of the people of this country are taking their holidays away from home. They cannot afford the high cost of a holiday elsewhere. This increase in cost during the last few years is not entirely due to the increased cost of running hotels and boarding-houses, but is chiefly due to the concentration of holiday business in a very short period, and, at the same time, to the very high cost of travel.

The Minister could do a great deal in both cases. Dealing, first, with the need to extend the holiday season, it is obvious that no industry can hope to run on economic lines if it has to recoup its wages bill and overheads for six months within, say, eight weeks. Both hotels and resorts have made very strenuous efforts to extend their peak periods both before July and after August by offering lower terms during those periods and by offering holidays for old people at special rates. But the numbers are still quite inadequate.

Large-scale changes in holiday habits are certainly required. Exhortation is not enough. In Toronto, the Bell Telephone Company give an incentive to their employees to stagger their holidays. Those who do this receive an extra week's holiday. I think that there is an opportunity for the Board of Trade and other Departments of Whitehall to give a lead. Something could be done, possibly with the co-operation of the trade unions and industry generally, to make this gesture to increase the holiday period.

What is certainly a step in the wrong direction is one taken by the Admiralty recently in announcing that it will close down its dockyards during the peak summer period. As the Minister will know, that encourages other industries in the locality who are supplying ancillary articles to the dockyards to do the same, and this accentuates the trouble rather than assists in curing it.

The second factor is the high cost of travelling. We need cheap fare facilities. We might with benefit emulate the custom of some European countries by introducing family travelling arrangements. I must emphasise that holidays away from home will not be possible for the remaining 50 per cent. of holidaymakers unless and until the holiday season is extended.

Certain other things are worrying the hotel industry. The Catering Wages Act is very much to the fore with anyone running such an establishment. I am quite well aware—but I do not think many members of the industry are—that the whole purpose of the Act is to take away from the Ministry the power to intervene in wage awards. Nevertheless, many of us feel that the present system is too general in character and that we need more regional and local boards.

There is much disturbance in the industry about the proposed Food and Drugs Amendment Bill. Nobody in the industry seeks to oppose the suggestions regarding purity and cleanliness in the preparation, presentation and marketing of food. Those in the industry welcome any measure to ensure to the public clean food. What they object to are the complexities introduced by the Bill and the fact that it is not really needed at the present time.

I think I have covered most of the points which are disturbing the industry and I hope that the right hon. Gentleman will be able to satisfy us that he is fully alive to the potential importance of the matters raised and can make some constructive suggestions towards meeting them.

1.7 a.m.

Commander R. Scott-Miller (King's Lynn)

I do not want to keep my hon. Friend from the Minister for more than a minute, but I do wish to endorse what he has said about the importance of this tourist and travel industry. I, too, feel that our hotels, in their general presentation to the public, leave very much to be desired. I recommend to the Minister the suggestion made by my hon. Friend, of some form of Government assistance by way of loans to hotels. By that I do not mean that there should be a subsidy, but I do think that it would be money well invested.

There is no doubt that the more foreign visitors we can attract to this country the more invisible exports we shall enjoy. I should like to see the numbers of foreign visitors greatly increased. I am quite sure that we can offer to holidaymakers from abroad attractions just as great as foreign countries offer to our own people. I think my hon. Friend is pleading in a very good cause and I hope the Minister will be able to meet the points he has made.

1.10 a.m.

The Minister of State, Board of Trade (Mr. Heathcoat Amory)

My hon. Friend the Member for Hastings (Mr. Cooper-Key) has raised a wide subject and I should like to say at once that I appreciate the terms in which he has done so. I should like also to say straight away that I agree entirely with him as to the importance of the tourist industry to our national economy.

The figures for overseas tourists are significant, and are as roughly quoted by him. Of the 819,000 for 1953, it is interesting that 251,000 represent visitors from the dollar area. Also, figures he quoted for the foreign currency earnings are, I think, correct, and include the cost of transport across the sea. Those are considerable figures, but I, too, believe that there is scope for further considerable growth.

It is clear that our present hotel accommodation is inadequate, and the British Travel and Holidays Association have estimated that within five years we might have an increase of about 200,000 in the number of visitors; but that would be conditional, as my hon. Friend said, on about 5,000 additional beds being made available, and half of those, they think, are required in London. While mentioning the Association, I should like to pay tribute to the excellent work that body does, under the energetic chairmanship of Sir Alexander Maxwell.

Perhaps I may mention the scale of support which the Government are giving to that body. Last year the Government grant, largely for overseas publicity, amounted to £720,000—a very considerable sum. I think there is one cause for concern to us, and that is the very limited support indeed that is given to that body by the hotel industry. I think the total subscriptions coming from the hotel industry to the British Travel and Holidays Association are not more than £5,000 to £6,000, and when that is compared with the scale of Government support, the disparity is rather large. I would like to appeal to the hotel industry to back up the good work the Association are doing. It is important for the hotel industry to know that it is estimated that overseas tourists spend about 9s. in the £ of what they spend over here on hotels and catering.

I would now refer to what my hon. Friend said when he compared the amount of assistance that her Majesty's Government gives to the industry with the amount of assistance given by some foreign Governments to their hotel and catering industry. I know that my hon. Friend is conscious of the disadvantage of Government subsidies, but he will see that the kind of assistance for which he is asking really amounts to something of the same kind.

With our very complicated national economy that would be a most dangerous course for us to embark upon. We have many industries of first-rate national importance, and when one starts providing direct assistance like that, on what principle does one estimate the relative importance of the industries, and where does one stop? We are always having impressed on us how important it is to reduce Government expenditure, thereby reducing taxation, and we entirely agree. Such an object is quite incompatible with the adoption of direct Government assistance to industries, however important they are.

There is one point I should like to make on building licences, because here I believe the situation has improved enormously in the last two years. The hotel industry was undoubtedly handicapped a year or two ago, but individual building licences are now no longer a problem. If either of my hon. Friends knows of any case where hotels have building projects held up for lack of building licences, I should be glad to hear of it.

Reference has been made to taxation, and here I would say that the industry feels that there are concessions due to be made to it. The British Hotels and Restaurants Association have submitted a memorandum to my right hon. Friend the Chancellor of the Exchequer and to the Royal Commission on Taxation on this matter, and have pressed for Purchase Tax and other concessions. I have not the time to deal with this aspect tonight and, in any case, that is a matter for the Chancellor; but I would remind the House that there was a scheme a few years ago for the remission of Purchase Tax on equipment for hotels in connection with the Festival of Britain, but that that scheme was not very successful in operation.

One of the main difficulties, it was discovered, was that the kind of things which hotels might need and buy were, in a large range, the same as those required in ordinary homes; and that made administration very complicated. I think that the investment allowances introduced in this year's Budget must be of definite, although perhaps limited, help because they apply, I understand, to machinery and plant installed by hotels. The representations which the industry has made to the Chancellor and to the Royal Commission will be considered very carefully indeed; that assurance I can give.

Then there was reference to the extension of the holiday season, and I assure my hon. Friend that the Government are very anxious indeed to encourage a wider "spread" than exists at present for the holiday season. The British Travel and Holidays Association have conducted each year a campaign with that object in view, but the tradition for taking holidays in July and August seems one which is not easily changed. While the Government do what is possible to encourage people to spread holidays more widely, I believe that it would be wrong to compel them to do so.

My hon. Friend suggested an extra week's holiday for civil servants and that, no doubt, will be an extremely popular suggestion in some quarters; and I have no doubt that the Chancellor will note the suggestion. One could hope that it would be applied to hon. Members of this House, who would like holidays spread a little more, particularly during June and July. Reference was also made to the decision of the Admiralty to close dockyards for two weeks. That, I understand, is a reversion to pre-war practice and has been prompted by considerations of economy and efficiency.

Cheap travel facilities were mentioned, but I cannot fully accept at all the implication that the cost of travel in the United Kingdom is appallingly high. If it is related to pre-war figures, or to other countries, I would say that it most certainly could not be called appallingly high: but it is not a matter with which I could deal this evening. The question of family cheap tickets is a matter for the British Transport Commission which must, of course, be guided by commercial considerations. But the Commission are all the time weighing up what can be done in that direction.

I hope that what I have said indicates that the Government have the interests of this most important industry very much in mind and that we are, by our economic policy, and by the substantial contribution to the British Holidays and Travel Association, showing in a practical way our anxieties to help the industry to meet the requirements of our overseas visitors, for their benefit, and for the benefit of our national economy.

1.20 a.m.

Commander C. E. M. Donaldson (Roxburgh and Selkirk)

Will my right hon. Friend acknowledge the fact that these conditions apply equally to Scotland, if not more so, and that this is an all-encompassing matter of the whole of the United Kingdom? The Scottish Tourist Board are just as interested as the British Holidays and Travel Association and they work together under the able leadership of Mr. Tom Johnston.

Mr. Amory

I gladly give that assurance. From the point of view of overseas tourists I do not know how we would get on without the contribution from Scotland. As my hon. and gallant Friend knows, it attracts a very high proportion indeed of overseas visitors, and rightly so. I should like to make it clear that I have been speaking for the whole of the United Kingdom; and what I have said about Scotland goes for Wales, for there is a tourist board there, also.

Question put, and agreed to.

Adjourned accordingly at Twenty-one Minutes past One o'Clock.