§ 2.38 p.m.
§ Sir Geoffrey de Freitas (Kettering)
In drawing attention to tourism and the shortage of hotels I would point out to the Minister who will be replying to the debate that, though it is stated on the Paper that I am referring to Great Britain, for I used that as a shorthand, I mean the United Kingdom, because, of course, there is a vast opportunity for tourism in Northern Ireland.
I do not think it is generally appreciated that tourism is our fourth largest export industry, and one which has grown enormously—by 40 per cent., in fact—over the last five years. It is of even greater importance than many of our traditional export industries, because it doth not rely on the import of raw materials for the end product to be exported. I suppose that wine is about the only commodity we have to import to serve to the tourists.
Furthermore, the tourist industry is our largest earner of dollars. Tourism must not only be regarded as of benefit to the country generally—and the few figures which I have quoted will substantiate that—because it has possibilities of helping constituencies which, at first sight, may not be thought to be tourist centres.
My own constituency is in the heart of Northamptonshire, right in the centre of England. At first sight, it does not appear to be one of the great tourist centres. In fact, one guide book emphasises, as if it were an attraction, that Northants is the only English county which has nine other counties bordering on it. But it must not be forgotten that, in this heart of England, there are some of the loveliest pieces of English countryside, with beautiful farmland, parkland and villages. There are 69 villages in my constituency, and nearly every one of them has a fine church. One of them is the oldest Saxon church in the country, dating back to the seventh century. It has two distinctions: it has been described by one authority as the most imposing memorial to the seventh century to be found north of the Alps, and it is the only Saxon church in my constituency round which excavations have been made by the present Deputy Speaker.
1220 If tourists want castles, at the northern end of my constituency, overlooking the Welland Valley there is Rockingham Castle. It was fortified before the Norman Conquest, and the castle was begun by William. In Corby one can see a characteristically modern British achievement in the shape of a New Town planned round a modern efficient steel industry, as well as a truly remarkable old village church dating back to the twelfth century.
We are well equipped with hotels, whether they be modernised coaching inns such as the George at Kettering, or new, modern hotels like the Strathclyde at Corby. In these respects, we are like many places in the provinces and in Scotland, Wales and Northern Ireland. Even at this time of the year, we have accommodation.
It is London which is the problem. The British Travel Association calculates that, if tourism follows the present trend, in only three years' time we shall be short of 40,000 beds, chiefly in the London area. Either we build hotels and accept the 5 million tourists who are forecast to be coming at that time, or we sit back and watch the extra 2 million—we have 3 million tourists a year now—going to those countries in Europe which are building hotels.
I have mentioned that the forecast shows an increase of 2 million tourists in the next few years. However, we should think of tourism not only in terms of numbers but in the pattern of it. The huge new jumbo-jets will revolutionise tourism. We must not forget that air travel becomes relatively cheaper every year, and, as it becomes cheaper, more people of medium income will travel.
Another point to bear in mind is that increasing numbers will travel in large groups. It is much easier for a travel agent in Chicago, for example, to organise a tour and send it to those towns in Europe where he knows that there is hotel accommodation, than it is to spend his energies trying to find hotel rooms in groups of 10 here and 10 there in a city like London.
From May to October, hotel beds in London are 70 per cent. occupied. In July, the figure rises to one which 1221 is almost unbelievable. This month, 86 per cent. of hotel beds in London and the London area are occupied. It is estimated that 40 per cent. of those staying in London between May and October come from overseas.
The problem can be stated simply. Either we build more hotels, especially in London where tourists want to come and where there is the greatest shortage, or we shall lose to our continental neighbours the opportunity of taking a large share in this expanded tourism.
Although traditionally we do not have the reputation of being great hoteliers, foreigners seem to like coming here, as the figures show. Since the war, preparation of food in this country has improved enormously. All of us who have had experience as consumers before the war and today will say that. Although our service is not always as good as it could be, I know at least one foreigner who found it quaint when he asked a maid what time the dining room was open and was told, "At meal times, Sir".
People travel for the differences. There is the language problem as well. I read of an Englishman who was fascinated yet appalled by what appeared to be inefficiency because, at all French hotels, whenever he turned on a bath tap marked with the letter "C", out came hot water. Obviously every tourist has problems, but most of them like to find things a little different. This is very easy in terms of food, but it also comes with different hours for meals. Not everyone wants to dine at 10.30 at night as they do in most parts of Spain. I found it interesting, as a visitor in New York staying in a large hotel, to experience extreme difficulty in persuading the cashier to accept United States dollars in payment of my hotel bill. Her system was geared entirely to dealing with credit cards. However, she fumbled in her handbag and produced some change, accepting my apologies for tendering cash in such a quaint old-fashioned way.
What should the Government do about tourism and the provision of hotels? First, we must get all agencies involved in tourism to suggest to overseas tourists that they should go to places outside the London area. I see hon. Members present in the Chamber who represent characteristically tourist areas, but, although I am sure the Minister would 1222 not claim that Huddersfield is a natural tourist centre, certainly the Kettering area of Northants is. There is accommodation available outside London even in the month of July.
Second, I would make the point to the hon. Gentleman that nothing but more hotels can solve the problem of the shortage in London, and I find no signs that the position is improving.
The British Hotels and Restaurants Association argues for assistance in capital allowances, export incentives, credit guarantees, the Selective Employment Tax and investment incentives. I shall pick out one or two of those, though not all of them, because I hope that other hon. Members will intervene in the debate and make it a widely based one.
Because of the capital allowances provided over the last few years there has been a good deal of modernisation in our hotels, but the hotels complain—and I think that they have every right to do so—that they are not fairly treated in respect of the depreciation of buildings. They complain—and I agree with them —that as there is no building obsolescence allowance, they cannot easily set aside reserves for replacements or extensions. Without asking for the moon, they are saying that they should be recognised as an industry, like any other industry—and in this case it is an export one—and be treated like them and have the same capital allowances. This is not a wild ridiculous cry for enormous subsidies.
I come next to the question of credit guarantees, and what I have to say is no more than a suggestion. Working overseas, I have seen how our exports have been helped by the credit guarantee system. Remarkable help has been given to our export industries, and if the Government recognise that tourism is our fourth greatest export industry, they must be prepared at least to consider a scheme for a form of credit guarantee which will enable hotels to embark on improvement schemes.
My third point concerns the S.E.T. I am not against this tax, and I am not here to argue about it, but it does not seem to make the slightest bit of sense in relation to the hotel industry. This industry starts with a terrible shortage of staff. The best figure that I can 1223 get is that at times it is about 20 per cent. short of staff. Another criticism that I have of the S.E.T. is that it gives an excuse to the lazy, unenterprising hotelier to lie back and groan about the S.E.T., but do nothing. It is so easy to get sympathy when talking about this tax.
When I dug into the Government's hotel loan scheme, I was depressed to find that its terms were regarded by the British Hotels and Restaurants Association as less generous than those offered by most banks. I was very surprised to be told that the Government's scheme had been worked out without consultation with the hotel industry or the trade association. The Government do not have to accept what the industry, or the trade association, wants—to do so would be a denial of government— but consultation and working out what sort of scheme is needed seems to me to be essential, and I hope that the Minister will deal with this point when he replies.
I want in the few minutes remaining to me to draw attention to the last two issues of British Travel News, the admirable publication put out by the British Travel Association. I do not intend to refer in detail to the latest summer issue, although it carries a charming picture of the Minister and Miss Mollie Ang, Miss Singapore, but to refer instead to the spring issue.
On page 31 the association refers to certain basic requirements for the development of tourism. Under the heading, "Reception of Visitors" it says:The recommendation of the United Nations Conference on International Travel and Tourism … should be implemented as far as is practicable. There is a strong case for Customs examinations on a sampling basis, without the personal interview with every traveller.Surely this is so? If hordes of people come through Customs, it is essential to be selective and work on a sampling basis.
Under the heading, "Accommodation and Catering" the association refers to the needboth in London and elsewhere in Britain, of good standard accommodation suitable for the tourist of more moderate means.The Minister will remember that earlier in my speech I referred to the fact that with travel becoming relatively cheaper 1224 we would have to cater for lower income groups who were not looking for the Hilton, but wanted to stay at reasonable, standard accommodation.
Under the heading, "Transport", the association refers to a problem which exists not only in London, but it arises more in this City because nearly everyone who comes to this country passes through here. It is due to the way in which our history and geography have shaped us. I am referring to this nonsense about the taxi service from London Airport to the centre of the City. Because the airport is more than six miles away, there is all this bargaining about fares, and I suppose it is true to say that hundreds of foreign visitors get into a dispute with our taxi drivers. This is quite unnecessary, because our taxi drivers are really reasonable people.
Under the heading, "Extension of the Holiday Season", there is a reference to the fixing of the August Bank Holiday at the end of August. It is probably over ten years since I raised this matter in the House. It is now an experiment, and I hope that we will continue it to spread out the holidays.
The Association also suggests that the Government should encourage the building of a conference centre in London, and it also suggests that more national parks should be provided in the countryside.
If the Government bestir themselves, they have a wonderful opportunity to take advantage of the coming boom in tourism, because people want to come here. It is as simple as that. We have a great deal to offer, and as English becomes more and more a world language, Britain will become more attractive to the new generation of tourists who place language problems high on the list.
I regret the signs are that we are going to fail to capture this growing market. The principal sign is not only that we are failing to interest tourists in the attractions of the provinces, of Scotland, of Wales, and of Northern Ireland, but that we are not building enough hotels in London.
§ Mr. Speaker
I must remind the House that this debate ends at 3.45 p.m. I would like to get in all the hon. Members from holiday resorts, and I can if hon. Members speak briefly.
§ 2.58 p.m.
§ Lord Hamilton (Fermanagh and South Tyrone)
I assure the right hon. Member for Kettering (Sir G. de Freitas) and the Government that there is an acute shortage of hotel accommodation in Northern Ireland. Tourism is our fastest growing industry, with a revenue increase of 88 per cent. since 1960. As a result, demand has outstripped the available accommodation.
In 1966 tourist revenue amounted to £24½ million, with over one million visitors for the first time. This was achieved in spite of seamen's strike which hit the industry in Northern Ireland harder than in any other part of the United Kingdom. But the present position is only a prelude to what lies ahead, since the future potential is tremendous, not only for earning foreign currency, but for bringing much needed revenue to the more remote parts of Northern Ireland, and especially to specific areas in my constituency.
The attractions that we have to offer are an obvious and national magnet to an ever-increasing number of tourists. Again, with the population explosion in the United Kingdom, the advent of jumbo-jets in 1971, and the shorter working week, we have only scratched the surface of this great potential, which we are determined to develop.
At the same time, we are equally determined not to ruin our natural assets. To cater for this increase in the number of tourists we urgently need more hotel accommodation. A recent report by the Northern Ireland Tourist Board stressed the urgent need of providing at least 1,000 more hotel bedrooms if we are to partake of the benefits flowing from this tourist expansion. At the present time the morale of hoteliers, instead of being buoyant at the prospect of increased tourism, is literally at zero, for whereas other countries regard tourism as an industry we have moved in the opposite direction, through the savage imposition of the Selective Employment Tax and the removal of investment allowances.
These developments have had an extremely damaging effect, and is exasperating to the industry, since it is constantly reminded of the increased assistance given by foreign Governments to their respective hotel industries. It must also 1226 be remembered that tourism has literally revolutionised the economy of many European countries.
It is a fundamental mistake that the regional employment premium scheme has not been extended to include tourism, for it is in the regions of the United Kingdom that the future growth of tourism lies. It is a potential which will lie dormant unless the Government take action to remedy the existing position.
There is no excuse for this discrimination against the tourist industry. Its expansion would in no way damage our balance of payments position. On the contrary, it is not only the creator of considerable employment; but it is the earner of much foreign currency. Tourism is our biggest dollar earner.
Where is tourism without proper hotel accommodation? During 1964 Northern Ireland earned £675,000 through attracting overseas visitors. This figure has been considerably increased since that date. Last year there were 75,000 overseas visitors, compared with 45,000 in 1963. Unless we are able to provide the necessary accommodation for more tourists not only shall we lose this increase in the number of tourists; we shall lose those people who would otherwise go abroad for their holidays, thus aggravating the balance of payments problem yet further.
As the hon. Member for Kettering (Sir G. de Freitas) has already said, tourism must be regarded and treated as an industry on a par with manufacturing industry. That is particularly applicable to the regions of the United Kingdom.
§ 3.3 p.m.
§ Mr. Norman Miscampbell (Blackpool, North)
The hon. Member for Kettering (Sir G. de Freitas) has done a service to the House in bringing this matter before us this afternoon. He has made it clear that not only holiday resorts but nearly every constituency to some extent earns its living from tourism or hotels. I want to mention the other side of the coin, namely, the saving that accrues to this country from internal tourism—that which is indulged in by those who do not go abroad. That saves us a considerable sum of money. Typically preeminent in respect of hotels is the town, 1227 part of which I have the honour to represent—Blackpool. The hotels and boarding houses of Blackpool take in millions of people every year. In a society of growing affluence—albeit growing more slowly than we might wish—with a greater desire for holidays, many people might decide to go to the Costa Brava rather than our seaside resorts, so it is important that our hotels and boarding houses have the standard of modern amenities which people demand.
Blackpool, with its fine holiday and conference facilities, has its share of overseas visitors, and more people are staying there in the winter, but it is preeminently for home tourists. Such towns need modernisation, which needs money. Internal changes in hotels should be allowable against tax. If an old-fashioned Victorian hotel wants sufficient bathrooms to give 20th-century visitors a comfortable stay, this should be allowed. Nothing would give older hotels a better boost.
Depreciation, of course, is vital. An hotel, which, in these changing times, can have only a short up-to-date life, should be allowed to put away a certain sum—perhaps 2 per cent. or 3 per cent. a year —as industrial buildings do, for depreciation and refurbishing for future needs. Hotel building is inhibited. Blackpool has had practically no new hotel building since the war and it cannot be right that, when the market exists, hotels cannot be built and an adequate profit made.
I echo what has been said about the Selective Employment Tax. About 30 per cent. of the cost of running an hotel is labour costs, not just during working hours but 24 hours a day, seven days a week. It is estimated that the S.E.T. is adding about 10 per cent. to these major costs. The Government seem to be moving towards selectivity, and if ever there were a case for it, it is the hotel industry, which should be excused the S.E.T.
One of the most important practical steps which the Government could take to help the industry is to fix Easter. It is nonsense that, although the new spring holiday will be all right these next two years because it falls at Whitsun, when the religious holiday and the spring holiday are separate there is nothing but chaos for Blackpool and many other holiday towns. Therefore, I hope that the 1228 Government will have a new look at this industry, which is one of the areas in which they can save a great deal of money.
§ 3.10 p.m.
§ Mr. A. P. Costain (Folkestone and Hythe)
In the tradition of the House, I declare an interest in that I am a director of an hotel company in this country and a director of an hotel company overseas. I am also Vice-Chairman of the all-party Tourist Resorts Committee, and it is in that capacity that I speak today. It is a great temptation to do a commercial for my constituency, but I know that you wish speeches to be short, Mr. Speaker, and in any case my constituency is so well known that it needs no commercials.
When we compare the treatment of hotel companies in this country with the treatment of hotel companies on the Continent and elsewhere, it is not difficult to see why our hotel industry is not meeting the demand. My hon. Friend the Member for Blackpool, North (Mr. Miscampbell) referred to the Selective Employment Tax and other important factors, which I will not repeat. I want to refer to the value of tourism to the country and to what the Government and hon. Members can do to help.
First, I draw the attention of hon. Members who are present and those who read HANSARD to the existence of the Tourist Resorts Committee. I wish that more of them would attend. We have meetings once a month, and those hon. Members who represent tourist constituencies usually attend. I speak on behalf of the Chairman of the Committee, who unfortunately cannot be here, when I urge other hon. Members to attend more frequently. I thank the Minister of State for the interest which he has shown in the Committee. He has always been willing to attend and at least to listen to our complaints—and that applies to Ministers of both parties. But we could help the Minister and the House more if more hon. Members attend to put their point of view.
The organisation inside the Government for the tourist industry is by no means straightforward. Although the Minister of State is responsible for tourism, he has no power over planning permission for caravan sites—which are becoming an important factor in the tourist industry. The Minister of Housing 1229 and Local Government in responsible for giving those planning permissions. The Minister of Public Building and Works is responsible for building licences. The Minister of Transport is responsible for transport to the resorts.
On 15th June the Committee wrote to the Prime Minister on the subject and an acknowledgment was received this morning. The all-party Tourist Resorts Committee suggested to the Prime Minister, among other things, that it was unanimously of the view that a Select Committee would prove to be a most effective instrument to examine the various aspects of tourism. Our suggestion is that the House should set up a Select Committee which could service the Ministry and the tourist industry with the same powers as an Estimates Committee.
One of the problems is to get amenities in the towns. We have been improving immensely the hotel accommodation and the service given by hotels. I do not think that the hon. Member for Kettering (Sir G. de Freitas) did the hotel industry full credit for the improvements which have taken place since the war. One problem is the English weather. We have had three weeks of particularly good weather, but many of us worry as we leave the House today whether the weather will break. Hoteliers need more facilities for visitors during wet weather.
When I read only today that the "Queen Mary" had been bought by a group in sunny California as a holiday attraction, I immediately thought, "Why should not the 'Queen Elizabeth' be put in one of the Scottish Lochs? "Would it be possible for an investment grant to be given to a Scottish burgh or to a private individual if they were prepared to put the "Queen Elizabeth" in a loch? It would be a wet weather facility. The House should be given powers to set up this Select Committee to examine these matters.
§ 3.15 p.m.
§ Sir William Teeling (Brighton, Pavilion)
Some people consider that I am the Member for the Pavilion division of Brighton, but others believe that I am a Member for London-by-the-Sea. The right hon. Gentleman the Member for Kettering (Sir G. de Freitas)—and I thank him for bringing up this subject—referred to the London hotels and their 1230 problems. My town of Brighton is, with the new railway arrangements, only 50 minutes away at the most from London. It is a place where we now have, thanks to the enterprise of a gentleman called Mr. Poster, who has spent over a million pounds, several good hotels, including that in which the hon. Gentleman stayed recently, the Metropole.
We now have smaller hotels which have initiated "gastronomic" fortnights, with tremendous meals to attract people. All these things are done at places a very reasonable distance from London, and in the congested period of the year they are just the sort of places where people who want to go to the Savoy or the Dorchester would be equally happy to go.
The cost of the train fare is always considerable and increasing. When one goes to Switzerland one receives a tourist ticket, and the tourist rate is taken off the ordinary fare. Perhaps the Ministry of Transport and the Railway Boards could be consulted as to the possibility of some similar arrangement here, whereby overseas visitors could travel from these nearby areas to London at a cheaper rate. We have many conferences, international and otherwise, going on now in London and places like Brighton and this suggestion would assist those travelling to them.
The hon. Member for Blackpool, North (Mr. Miscampbell) referred to S.E.T. and the Bank Holidays. There has been a considerable pressure upon us in Brighton to ask the Minister responsible to look into the question of having a fixed Bank Holiday at a period shortly after a religious holiday which varies. I refer to Easter and Whitsun. This year the system has meant that the Whitsun Bank Holiday came about a fortnight later than otherwise. This meant that one had to keep staff employed over too long a period and the small hotel-keepers cannot afford this. I have put down a great many Parliamentary Questions asking whether we could link a fixed religious holiday with the other or, if that were not possible, have the present fixed holiday so many weeks after the religious holiday. It might be possible to do that.
I believe that this is the first tourist debate we have had since the death of a very great man connected with the tourist 1231 world—Sir Arthur Morse, head of the British Travel Association. He did more than most for the improvement of hotel life and to make things easier for people coming from abroad. He gained international respect.
When Sir Arthur was appointed by the then President of the Board of Trade, no salary was attached to his job, nor did he receive any salary throughout his period of office. Following his retirement, someone had to be found who had a similar sort of position in life. Sir Arthur had been a former head of the Hong Kong and Shanghai Bank and was a man of considerable importance in the business world. When he retired he was only too glad to have something to keep him busy. Is the Board of Trade still faced with the great difficulty of finding someone rich enough to take on, without salary, a job which brings in an immense amount of money for the country? Everything possible should be done to find either a retired business man or active business man who could switch over to this job without the handicap of no salary to offer.
Only the other day, when wandering through Sussex I attended a presentation of the Queen's export award—the Queen's Award, I think it is called—which goes to people who are doing very good work in the export trade. Officially, the hotel and tourist business is not regarded as an export, but we get a tremendous amount of foreign money from it. Could not the terms of reference of the present award be extended to include this business? If not, might we not have some other Royal award to show that we are doing very good work for the country?
§ 3.22 p.m.
§ Sir Neill Cooper-Key (Hastings)
I join with other hon. Members in congratulating the right hon. Member for Kettering (Sir G. de Freitas) on raising this important matter. Many of us have spoken on the subject over the years. It is no exaggeration to say that the British tourist and hotel industries have been quite disgracefully neglected by the Board of Trade ever since the war. We are one of the largest dollar earners—
§ Sir N. Cooper-Key
Yes, the largest—but when we compare the assistance we 1232 get from the Board of Trade with what our European competitors get from their administrations it will be seen that we fall very far short of what is necessary for the modernisation of our hotels. It must be remembered that we are in very strict and desperate competition with Europeans, who are in the same boat as we are in endeavouring to bridge the balance-of-payments gap. It is a matter of the greatest urgency that the Board of Trade should do something to assist our hotels.
Over a number of years many hon. Members from both sides of the House have served on the Parliamentarian's Tourist Committee. My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) referred to the good work which the Committee is doing. We have pressed forrelief from Purchase Tax on the tools of our trade, for capital allowances for our buildings, as for industrial buildings, for agreement that alterations within the four walls of the existing premises can be chargeable to revenue instead of capital and for loans for work such as the installation of central heating and private bathrooms.We have received very little consideration from the Board of Trade on these urgent requests.
On a narrower aspect, the economy of many towns and resorts is based on providing holiday accommodation and amenities. The prosperity and economic growth of areas such as my constituency of Hastings are directly affected by the number of beds which are available. I know for a certainty that in Hastings the number of beds available for visitors has been considerably reduced since the war because there has been no incentive to owners of hotels to bring their accommodation up to date. Not only for holidays but also for conferences, and business journeys to these resorts it is important not to lose sight of the need that our internal and domestic requirements should be kept up to date in hotel services.
Hon. Members have mentioned the Selective Employment Tax which will cause a great deal of detriment to the progress of the industry. The Government loan scheme is no use at all to small hotels, certainly not the sort of hotels there are on the south coast in resorts such as Hastings and Eastbourne. I hope that the Minister of State will 1233 suggest some constructive lines on which the Board of Trade will examine the problem and will give the House satisfaction that the Department is aware of the need for an up-to-date tourist industry and particularly for facilities to modernise and keep modern hotel facilities.
§ 3.29 p.m.
§ The Minister of State, Board of Trade (Mr. J. P. W. Mallalieu)
I thank my right hon. Friend the Member for Kettering (Sir G. de Freitas) for raising this subject and I thank hon. Members for the way in which they have spoken about it. The names of their constituencies form a kind of panorama or kaleidoscope of all that is attractive in these islands —Fermanagh and South Tyrone, Blackpool, Folkestone, Hastings, Brighton, Pavilion—and Plymouth might also have been included.
I begin by taking up two specific points, one of which was mentioned by the hon. Member for Blackpool, North (Mr. Miscampbell) about fixing Bank Holidays. This House has had power to fix the Easter Bank Holiday since 1928, but it has not got round to doinig so yet. The trouble is not our laziness so much as the difficulties which the Christian churches have on occasion in reaching agreement. I think that discussion has gone on long enough. I shall put the representations which have been made to my right hon. Friend the Home Secretary in whose province this matter comes.
I was grateful to the hon. Member for Brighton, Pavilion (Sir W. Teeling) for his comments about Sir Arthur Morse. The hon. Member asked about the chairmanship of the B.T.A. It is still an unpaid job. We are very lucky to have so regularly the first-class men such as the present chairman, Lord Geddes, to do this job for nothing. I am inclined to agree with the hon. Gentleman that we cannot expect this situation to continue for ever. We are considering it.
I reinforce what was said by the hon. Member for Folkestone and Hythe (Mr. Costain) about attendance at the all-party Committee of which he is Vice-Chairman. It is an immensely valuable Committee, and it would be even more valuable if more hon. Members attended it. The hon. Gentleman rightly said 1234 that he and his colleagues on the Committee have proposed to the Prime Minister that a Select Committee should examine the whole question of tourism. I am sorry that the hon. Gentleman has not yet received a reply, but one is on the way.
Now that a great many proposals of subjects which Select Committees could investigate are before the authorities of the House, one difficulty is the shortage of Members to man them. There is also the difficulty of the shortage of staff to service them. I am interested in the suggestion and I have not the slightest doubt that the authorities will bear it in mind.
There are various complications about having a responsibility for tourism. There is a diversification of Government Departments and outside agencies. Because of this, and before there is any question of a Select Committee, we have set up an Inter-departmental Committee to examine the whole matter to see whether the Government machinery can be improved and co-ordinated. The British Travel Association has only recently produced some proposals, which are not yet published and which I am considering for various changes in the organisation outside Government to develop tourism. When I have had the chance to see these various reports and consider them with my colleagues, I shall be only too delighted if we can have an opportunity—not only with the all-party Committee, but in the House itself—to discuss the various suggestions.
My right hon. Friend the Member for Kettering and all others who have spoken emphasised the importance of the tourist industry to Britain. The Government are well aware of it. Last year 4 million overseas visitors spent £219 million here. By 1970 we expect the number of visitors to have risen to at least 5 million. Therefore, in terms of overseas earnings alone this is important. I agree with the hon. Member for Blackpool, North that there are also the internal savings which his wonderful resort, amongst others, have contributed for many years.
Those who come from overseas do not all go into hotels. Some stay with friends or at boarding houses or go into bed and breakfast establishments. I am glad 1235 to say that an increasing number of visitors come here to camp, or to go on caravan sites, or into youth hostels. I realise the importance of increasing such facilities as these. We have some good camping and caravan sites, but not so many and not always so good as those that can be found abroad. The Government are taking what steps they can to try to extend the number and improve the quality.
In spite of this development of camping, it is obvious that hotels are the real key to the tourist industry and that there is a shortage. My right hon. Friend quoted the figure of 40,000 extra hotel beds which would be needed by 1970. That was a B.T.A. estimate. Since then the Association has come down to an estimate of 30,000. What is disturbing is that the Association thinks that only about 20.000 will be provided, so that by 1970, on present trends, there may be quite an acute shortage. Incidentally, it is a curious fact that we do not know how many hotel beds we have got in this country. Nobody has ever made a proper survey. Samples have been taken but no survey has been made. I would have thought that the British Hotels and Restaurants Association might very well occupy themselves in making a survey of that kind.
Whatever the correct figure, the probability of a shortage is undeniable and, as my right hon. Friend has said, the shortage is not evenly spread through the country. I understand that there is a shortage in Fermanagh and South Tyrone, but the most acute shortage is likely to he here in London. One way of relieving that shortage which my hon. Friend and others have mentioned is to try to attract tourists away from London to other parts of the country. This is being done, and I think the speeches which have been made today are extremely helpful to that end. The speech of my right hon. Friend the Member for Kettering would have a very high place in any guide book about Northampton. The authorities in various parts of the country are now so much alive to the desirability of attracting tourists that they are promoting their own areas in a big way. In my own area of Yorkshire the Yorkshire Travel Association—if I may roll my logs too —is a very lively organisation indeed 1236 and is doing splendid work in telling Scandinavians and others of the real beauties of the West Riding and other Ridings in Yorkshire. No doubt, the same sort of thing is being done by Brighton, Blackpool, East Anglia and other places.
However vigorous these campaigns may be, the fact remains that we must have more hotels. My right hon. Friend and others have suggested that both the present hoteliers and those who are contemplating building new hotels in the future are being discouraged by the fiscal policies of the Government, notably by S.E.T. and the withdrawal of the investment allowances. Hon. Members have put these points very forcibly, though a great deal more moderately than my ex-comrade Lord Shawcross, who used his position as the President of the British Hotels and Restaurants Association to make a sweeping and general attack on the Government, even bringing in homosexuality and abortion. I got the impression that he was much more concerned with working off spite on his ex-colleagues than he was with furthering the interests of the hotels he was purporting to represent.
The point about these fiscal measures is to try to concentrate help on those activities which produce the greatest return of foreign exchange and so help the balance of payments. It is perfectly true that the tourist industry as a whole and the hotels in particular help very much in the foreign exchange business, in the balance of payments, but the percentage of payments from overseas, expressed as a percentage of total turnover in the hotel and restaurant industry, is only 10 per cent. compared with 25 per cent. in manufacturing industry. Therefore, in the present difficulties of the balance of payments it seemed sense to concentrate help as much as possible in the manufacturing industries.
However, because of the realisation that the hotels are so important, the Government attempted to counteract any disappointment and discouragement arising from those measures by the hotel loan scheme. On this my right hon. Friend was a little critical, saying that he had been told that the terms were not as good as those which could be obtained from the banks. We have so far had 84 applications, to a total value of 1237 £7,410,000, and loans totalling more than £1 million have been approved and are now on offer. I hope and expect that the whole amount will have been allocated by the end of the year.
This was an experimental scheme for one year. We are looking at it. We are talking about it with the trade interests. I must tell my hon. Friend that, before we adopted it, we discussed the scheme in great detail with the British Hotels and Restaurants Association. The meeting which I have particularly in mind was on 13th October, 1966, when the outline of the scheme was discussed with that organisation. If we decide to extend it or to make alterations, we shall do so in consultation with the interests con- cerned. We shall take account also of the Hotel and Catering Economic Development Council's appraisal of the return on investment in certain new hotel developments, which is due out in October.
On the general point that taxation at present is making hotel running or hotel building unprofitable, I call attention to the recently published summary of a survey in 1966 of the performance of over 100 hotels of all types and in most parts of the country. The survey was carried out on behalf of the University of Surrey. From this analysis, it emerges that the median profit of these hotels, the average of 50 per cent. of them, was 10 per cent. for the last year. For the tower quarter, the figure was only 4½8 per cent., but for the upper quarter the figure of profit was 17½2 per cent.
§ Mr. Mallalieu
That is on turnover. Further, recall to the House the Paper which Sir Geoffrey Crowther, who is one of the more knowledgeable men in the hotel trade, read fairly recently to the 1238 London School of Economics. To take just one quotation, he said:Given the gentle rate of continuing inflation, the building of new hotels, in the long run, shows a handsome rate of return on capital.I am fortified by those two references in my belief that the prospects for the hotel trade are reasonably good.
My hon. Friend mentioned a number of points and suggestions which are raised by the British Travel Association in its Annual Report. We have discussed these thoroughly with Lord Geddes and his executives, and we are doing whatever we can in the Board of Trade to put them into effect. My hon. Friend mentioned specifically the wretched business of taxis from Heathrow, and what-not. This has been carefully looked into, and I hope that a recommendation will come forward shortly. Nearly all the points have been discussed, and, where possible, they are being put into effect.
I end as I began, by thanking my hon. Friend for raising the subject in debate. It is one in which the House of Commons, rightly, takes a great interest. Having come only recently to the job, I have found myself intensely interested in it and, indeed, delighted by the work which outside organisations such as the B.T.A. which are doing a remarkably good job. I assure hon. Members in all parts of the House that, while in my present job, I shall do everything I possibly can to help and foster the tourist industry.
§ Sir W. Teeling
Will the hon. Gentleman say a word about the possibility of reduced rate tickets for overseas visitors. such as are available in Switzerland?
§ Mr. Mallalieu
I am sorry that I did not mention that. I have made a note of it and I shall pass it on to my right hon. Friend.