§ 11.53 p.m.
§ Mr. Robert Adley (Bristol, North-East)It is slightly coincidental that I should have the opportunity of raising on the Adjournment the subject of tourism after my hon. Friend the Member for Torrington (Mr. Peter Mills), the Under-Secretary of State for Northern Ireland, has just sat down, because a few days ago in the House, also late in the evening, we discussed the question of tourism on an order concerning Northern Ireland.
I am glad to have this opportunity at short notice to raise again the importance of tourism to the British economy and I should like to thank my hon. Friend the Under-Secretary of State for being here at this late hour. I know that he has had a hurried journey back from Manchester. I am grateful to him for the continuing interest he shows in the tourist industry and for his helpfulness in dealing with the points that we continually raise with him.
I begin by again declaring an interest in the hotel industry. The occasions on which one is able to raise the subject of tourism are strictly limited and tend to be raised only on the initiative of back benchers on Adjournment debates. In the two and a half years that my hon. Friend the Member for Bodmin (Mr. Hicks) and I have been Members of this House tourism has been discussed for three and a half hours compared with 48½ hours spent on discussing the coal mining industry, yet in reality the tourist industry employs more people and contributes very much more in cash terms to the national economy and certainly requires nothing like the subsidisation that the coal industry enjoys.
I feel that the tourist industry does not command sufficient attention from the Government. I would illustrate this by reminding my hon. Friend the Under-Secretary of the difficulties we had recently with the Fire Precautions Act. It involved consultations with the Department of Trade and Industry and in the end a number of back benchers from this side had to go to the Treasury to try to obtain a fair deal for the keepers of very small hotels to overcome the crippling financial burdens that the Act might have 402 laid on them. My hon. Friends the Members for Conway (Mr. Wyn Roberts) and for Bodmin were two of those who pleaded with the Treasury a few months ago for assistance to these people.
One of the troubles of the industry in making itself heard is that there is a large number of employers and employees and, I believe, totally inadequate trade union representation, although the industry could well do with a good strong trade union representing the interests of many of the people who work in it. I cannot imagine, for instance, that the National Union of Mineworkers would allow mining to be paid as little attention as is paid to the tourist industry. There are lessons here for the TUC which in the months and years ahead will, I hope, result in the creation of a powerful union for the tourist industry.
This industry is a vitally important employer of labour. It is estimated that 1.2 million people are employed in hotels and catering alone. It is a large earner of foreign currency. The Minister will correct me if I am wrong, I hope, but I believe that it is the largest single dollar-earning industry in the British economy.
When the Conservative Party was in opposition, we rightly chastised the Labour Government for over-emphasising the importance of the manufacturing industries to the detriment of the service industries. We criticised the selective employment tax because it favoured manufacturing industry. In the last two years we still have not learned the lesson by giving sufficient emphasis to generating growth within the service sector.
As regards value added tax I wish to chastise not the Government but the hotel and catering trades for some of the wild stories which are going around about the damage that the tax will do to the industry. I do not believe that there will be any seriously detrimental effects on the industry. The special pleading put forward for exemption from VAT is not a particularly good case. I should, however, like my hon. Friend the Minister to ask the Treasury carefully to consider one point; the question of enabling hotels and catering establishments to claim exemption from VAT on the overseas earnings element of their business.
We are always told that one of the main objects of VAT is to encourage exports, and invisible earnings are a vital 403 part of our export earnings. It is incongruous that such an easily identifiable element, at least for an hotel, as an overseas visitor cannot be excluded from the tax.
Tourism is a vitally important regional employer of labour. If my hon. Friend the Member for Bodmin catches your eye, Mr. Deputy Speaker, I hope he will be able to enlarge on the importance of tourism in the South-West, where it is the largest employer of labour, having far outstripped agriculture. I should like to see more use made of this industry as an instrument of regional policy, certainly on the lines of the order on the Northern Ireland tourist industry which was laid before the House last week.
We have to recognse that there is more to England, Wales and Scotland than London. The Government must do everything possible, and continue to do everything possible, to get tourists not simply to London but also out into the countryside. There is a limit to the number of plastic-raincoated Japanese tourists we can cram into Westminster Abbey. We hove to be more positive in getting people to visit Scotland, Wales and the South-West.
§ Mr. Ian Lloyd (Portsmouth, Langstone)And the South-East.
§ Mr. Mark Woodnutt (Isle of Wight)And the Isle of Wight.
§ Mr. AdleyAnd the Isle of Wight.
So many things are tied up with the tourist industry. For instance, the location of airports is of vital concern to it. I hesitate to involve my hon. Friend the Under-Secretary in the Foulness decision, which I believe to be totally wrong. It is wrong to place a major airport in southeast England when the decision on the Channel Tunnel is imminent. However, I do not expect my hon. Friend to become involved in that argument tonight.
The Government have done well in encouraging people to train in new industries. Carrying my analogy with the coal mining industry a little further, I fear that we in Britain are still job snobs. It appears to be still socially acceptable to work at the coal face but apparently not 404 so to work behind the reception desk of an hotel. The sooner we as a nation realise that the world moves on and that jobs change, and that for millions of people the tourist industry can represent a secure future with existing employment prospects, the better we shall all be.
I commend to my hon. Friend the Under-Secretary, as I have done previously, the example of not only the Canadian Federal Government but also the Ontario Government in recognising the importance of tourism in the State of Ontario by calling their Department of Trade and Industry, the Department of Trade, Tourism and Industry.
My hon. Friend the Under-Secretary will not mind my once again pleading with him to do what he can to upgrade tourism within the Department of Trade and Industry. He may well ask "What is in a name?" But tourism is rarely mentioned by the Government and it rarely figures at the top of the list in the departmental priorities of the Department of Trade and Industry. Adoption of my suggestion would indicate its importance.
I conclude with a reference to an order we debated last week, the draft Development of Tourist Traffic (Northern Ireland) Order 1972. I earnestly commend that document to my hon. Friend. In this instance the authorities in Northern Ireland are way ahead of the Department of Trade and Industry in their thinking. I quote the five lines of the explanatory note of that order, commending them to my hon. Friend:
This Order makes further provision for the giving of financial assistance to certain catering establishments, extends the functions of the Ministry of Commerce for Northern Ireland, the Northern Ireland Tourist Board and local authorities for purposes of the tourist trade, and enables grants to be made to local authorities for tourist amenity purposes.I am most grateful to the House for allowing me to make my few remarks and I thank my hon. Friend the Under-Secretary for listening to them tonight.
§ 12.3 a.m.
§ Mr. Wyn Roberts (Conway)I shall add only very briefly to the debate and only to note the concern about the future of tourism that underlies what is after all a considerable success story. In particular I want to refer to my constituency of Conway, which extends from Llandudno in the east to Port Dinorwic 405 in the west. It is perhaps typical of the North and not only the north of Wales. It is perhaps typical of all those holiday areas which fear the attractions, as far as they affect tourism, of the warmer climates of the French and Italian Rivieras when we join the Common Market.
We realise that there are advantages as well as disadvantages in joining Europe. In Europe the people have longer holidays. We hope that this practice will not be long in catching on in this country, so that even if some of our traditional holidaymakers spend part of their annual holidays abroad, in future they will spend a significant proportion of their time holidaymaking on home ground. If that happens we may be sure that holidaymakers' demands in this country will increase rather than diminish in sophistication. They may no longer be content with homely fare, with fish and chips. They will want scampi Provencale and similar dishes. They must be able to eat in Llandudno or Blackpool as they do in Paris or Cannes.
I have great faith in the capacity of our resorts to adapt themselves to the requirements of their visitors. We must face the fact that the demands on their finances will be very heavy. VAT will certainly force them to put up their prices even after they have given the customer credit for the elimination of the remaining half of SET. We know that our resorts are always worried about putting up their prices, because the higher the prices the fewer the guests.
I have always believed that hotel buildings should be regarded as industrial buildings for tax purposes, and so incidentally did our right hon. Friend the Secretary of State for Social Services. It is only the fact that hotel buildings have in the past appreciated rather than depredated in value that has prevented this from happening. I wonder whether the Government could look again at this problem and consider it in the light of what may happen in the future rather than in the light of what has happened in the past.
I was very pleased that my hon. Friend the Member for Bristol, North-East (Mr. Adley), who secured this debate, laid stress upon the desirability that the British Tourist Authority should use its best endeavours to ensure that not 406 only London and the South-East benefit from the influx of foreign visitors but that the regions, and in particular I hope Wales, benefit from this influx.
We in Wales—I speak for North Wales in particular—are grateful to the Government for creating the right framework in which tourism can operate successfully. For example we in North Wales are to have a new road, the A55, which will bring in Liverpudlians, Mancunians and the rest of the Lancastrians, and bring them closer to us. We shall welcome them as we have always done. All we ask is that the Government give us the resources to make our welcome a real one.
§ 12.9 a.m.
§ Mr. Robert Hicks (Bodmin)I am grateful for the opportunity to contribute to this short debate.
I should like to speak about tourism in the context of the economy of the South West, which is the country's largest tourist region. It is estimated that 3 million visitors come to Cornwall each year. In terms of the county's income the revenue now exceeds £50 million.
I remind my hon. Friend the Under-Secretary that most of Cornwall is located within the South-West development area and that the part which is not so located falls within the Plymouth intermediate area. Therefore, the whole of the Duchy is part of one kind of assisted area or another. The reason for this is, of course, that we have higher than average unemployment and our earnings are lower than the national average.
The Government have rightly placed much emphasis on alleviating the regional disparities. Regional development policies have lately featured high on the list of their actions, not least through the medium of the Industry Act. The Minister will recall that I served with him on the Standing Committee on that Act and I drew his attention to a particular technique, which I believe the Government could employ in the South-West, concerning the amount of finance made available for allocation to special or approved projects located in development areas.
At present £1 million a year is set aside under Section 3 of the Development of Tourism Act, and of that sum £500,000 goes to the English Tourist Board. That is a totally inadequate sum. 407 There were about 234 applications for grant aid in 1971 from the South-West development area alone and yet assistance could be made available in only about 23 of those cases. I know that the board would have liked to help many of the others, but the money was not available. If we now accept tourism as a technique for implementing regional development policies, and obviously in the case of the South-West it should be so regarded, more aid should be forthcoming.
We hear a lot about the coal mining industry, shipbuilding and so on, but for once we should back a winner. This is the most important message to come out of the debate this evening. Let us back success. By giving money to the tourist industry we should be contributing not only to the welfare of the economy as a whole but giving help to development areas like the South-West.
§ 12.13 a.m.
§ Mr. Mark Woodnutt (Isle of Wight)do not believe that the hotel industry is asking to be given anything.It is one of our biggest industries. I can never remember whether it is the fourth largest dollar earner and the highest foreign currency earner or the other way round. Whatever it is, it is enormous. It needs certain incentives.
Some of our hotels must be brought up to the standards of Continental hotels. The Minister and the Department of Trade and Industry should press the Treasury to treat hotels in the same way that it treats industrial buildings. There are many hotels on the South Coast which must improve their standards. The buildings need improvements and facilities such as more bathrooms. All that is needed is for the Treasury to say that capital expenditure on these improvements will be allowed against profit for tax purposes. Our best hotels are the best hotels in the world. There is, however, a vast number of small hotels which must be improved, but they need an incentive to do so.
§ 12.14 a.m.
§ Mr. Martin Maddan (Hove)I shall speak for 60 seconds. I thank my hon. Friend the Member for Bristol, North-East (Mr. Adley) for raising this matter, particularly because his father is one of my most distinguished constituents.
408 I wish to emphasise what he said about the spirit of service which is so important if the tourist industry is to succeed. I paid £1 tonight to see the Tutankhamun exhibition at the British Museum. My children wished to post letters in the special postbox there, but we could find no stamps. I went down to the cloakroom for my bag to get stamps and I was told that I could not go back into the exhibition where my wife and children were waiting for me. Unless British people are prepared better to understand that service—that the customer must be humoured—is an honourable way of earning a living, we in this country will never make any progress.
§ 12.15 a.m.
§ The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)I am very grateful to my hon. Friend the Member for Bristol, North-East (Mr. Adley) for showing great initiative and raising this important subject, in which I know he takes a keen interest. It has enabled many of my hon. Friends to participate. My hon. Friend the Member for Hove (Mr. Maddan) always looks after the interests of the South Coast. The case for the West country was put by my hon. Friend the Member for Bodmin (Mr. Hicks). My hon. Friend the Member for Conway (Mr. Wyn Roberts) spoke for Wales. I am glad that the Member who represents the area where I like most to spend my holidays—I refer to my hon. Friend the Member for Isle of Wight (Mr. Woodnutt)—also spoke. It is significant that not one hon. Member on the Opposite side took the trouble to participate in this important debate.
It is clear from what my hon. Friends have said that what concerns them most of all is matters within the realm of taxation, fiscal matters. They will not expect me to produce sudden decisions on those matters. The arguments they have adduced are well known. My right hon. Friend the Chancellor of the Exchequer will be able to read the report of their speeches in the OFFICIAL REPORT. The arguments they have adduced will be studied carefully.
I was glad that my hon. Friend the Member for Bristol, North-East dealt with the question of VAT. The wildest and most inaccurate rumours have been 409 floating about concerning its effects. I am glad that my hon. Friend took the opportunity of scotching them, as has the Chairman of the English Tourist Board.
I agree with my hon. Friend that our task should be so far as possible to get tourists also to go to places outside London. London is the magnet. We must get tourists to the other parts of the country. I pay tribute to the work which the English Tourist Board has done in setting up its regional boards so speedily and to the work which the regional boards do in the regions to attract tourists.
We are dealing with a success story. As my hon. Friend the Member for Bodmin said, we must back success. In due course tourism will become perhaps our most important industry. Twenty years ago fewer than 1 million visitors arrived here from overseas. That figure has now risen to 7 million. By 1981 it could easily be twice as high.
The success of the industry depends perhaps more than most on confidence in the country's future as a holiday area. There is good reason for this confidence. There has been the growth of overseas visitors. In 1967, 4.3 million came here. Today the figure is 7 million, as I have said. In 1967 overseas visitors spent £236 million here. In 1971 the figure was £490 million.
One very important aspect of growth is that of home holidaymaking. From an almost static position for many years, it rose in the last four years from 30 million to 34 million. Spending on holidaymaking at home rose from £560 million in 1967 to £1,220 million in 1971. This all indicates the success of this industry, which is important to our economy and in many ways to our way of life.
So much of the earnings from the home holidaymaking section has gone to the regions. Over one-quarter of all the holidays taken by our own people are 410 spent in the South-West, but the North-West, the North-East, Scotland and Wales cater for a very sizeable holiday market. It is important to bear in mind that tourism is of most value to our regional economy when it is thoroughly profitable.
We must look for the sort of development that is attractive to investors in its own right. There has already been an interesting study on the hotel industry which led to some cheery conclusions about future profitability. I refer, as some of my hon. Friends will realise, to the study which was recently carried out by the Hotel and Catering Economic Development Council.
The essence of the report was that there were good prospects for profitable investment in the hotel industry up to 1980. Of course, the profitability of the industry is closely bound up with eliminating the more serious aspects of the seasonal problem. There is wide evidence, however, that the efforts of our tourist boards to encourage out-of-season holidays are bearing fruit.
That is one of the many changes that are altering the face of tourism in many respects. It was Lord Thorneycroft who likened the attempt to describe the state of the tourist industry as being similar to taking a photograph of a moving train with a still camera. Tourism is a train which is moving at a great pace. I agree that it should be backed as far as possible. How many industries can be as certain as the tourist industry that the demand for its product will go on increasing by between 5 per cent. and 10 per cent. per annum for the foreseeable future?
This bodes well for the tourist industry and for our country. I take note of what has been said, but let us not delude ourselves when we are dealing with the problems of success and growth.
§ Question put and agreed to.
§ Adjourned accordingly at twenty-one minutes past Twelve o'clock.