HC Deb 26 March 1973 vol 853 cc894-6
4. Mr. Adley

asked the Secretary of State for Trade and Industry whether he is satisfied that tourism is making a satisfactory contribution to regional policy; and if he will consider establishing tourism development areas, separate from industrial development areas.

The Under-Secretary of State for Trade and Industry (Mr. Anthony Grant)

It is estimated that earnings from tourism in the assisted areas amounted to some £700 million in 1972, and this contribution is expected to increase. The case for setting up special development areas on regional policy grounds has not yet been made out.

Mr. Adley

I thank my hon. Friend for that answer, but will he agree that there is great further potential in the regions for employment in tourism? Will he agree also that the Development of Tourism Act, passed by the last Government, although helpful, did not have enough regional bias? Is he aware that value added tax will make overseas holidays more attractive in price than home holidays, and will he now bear in mind as a matter of urgency that the tourism development areas do not always have the same requirements as industrial development areas have?

Mr. Grant

I accept that, but the first priority must be in the context of regional policy as a whole. This has been the Government's priority in framing their proposals.

Mr. Mason

There is already a proliferation of special development areas, development areas and intermediate areas, and some of the tourist spots obviously would not come in any of those. Aside from the £700 million of aid which is going into the recognised special development areas, development areas and intermediate areas, to what extent has the hotel trade been helped by the hotel development scheme and, second, to what extent might that now be offset by the cost to hoteliers of the Fire Precautions Act and VAT?

Mr. Grant

The point about the Fire Precautions Act is a separate matter outside my departmental responsibility. The total cost of the hotel development incentive scheme is about £60 million, but two- thirds of it is spent outside the London area.

Mr. Fell

Will my hon. Friend recommend to the Secretary of State for the Environment that he should study the position of some of our tourist towns in which people pay enormous rates because of a short period during the year when they accommodate many tourists from overseas and from within this country? Some of the rates in Yarmouth this year will rise by as much as 51 per cent. This is a very serious situation.

Mr. Grant

I am sure that my right hon. and learned Friend the Secretary of State for the Environment will note what my hon. Friend has said.

Mr. Maclennan

Does the hon. Gentleman recognise that the ending of selective employment tax has damaged the competitive advantage of certain areas which were relieved of its imposition and which were, in a sense, special tourist development areas? What do the Government propose to make good this deficiency?

Mr. Grant

Selective employment tax was very much hated by the hotel and tourist trades. The tax has been abolished. The hotel trade is not the only one affected by value added tax.