HC Deb 15 February 1982 vol 18 cc119-26

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]

11.00 pm
Mr. David Atkinson (Bournemouth, East)

This is perhaps an appropriate time to highlight the problems of the British tourist industry and of our seaside resorts in particular. The past two years have been disappointing for the industry compared with the encouraging expansion of previous years. Much trade has already been lost this winter because of the bad weather; and now holiday hotels throughout Britain are being badly hit by the rail dispute, which is further deterring people from taking a winter break. If the Government needed any justification for their policy of privatising bus and coach services to encourage choice and competition with British Rail, ASLEF's total irresponsibility and short-sightedness is providing it now. If the Government bail out British Rail because of the dispute, they wll be doing to the newly established free enterprise coach services what the taxpayers' guaranteed support for British Airways has done to Laker. The British tourist industry will be the worse for it.

Tonight's debate is, to some extent, a natural follow-up to the meeting that my hon. Friend's predecessor, our right hon. Friend the Member for Gloucester (Mrs. Oppenheim), had with representatives of the local tourist industry when she visited Bournemouth last July. While welcoming my hon. Friend's appointment to his new responsibilities, I am sure that he will accept my regrets that our right hon. Friend is not here to accept my appreciation, and that of my right hon. Friend the Member for Bournemouth, West (Sir J. Eden), for her personal interest in Bournemouth and her visit last year. I hope that my hon. Friend is in a position tonight to refer to any progress on the matters that she agreed to take up, to some of which I shall be referring in the debate.

The Government need no convincing from me about the enormous contribution that the tourist industry makes to the British economy as well as the potential that exists for it to play an even greater role in the future. Tourism represents the largest single invisible earner of foreign currency to Britian when fares paid to British carriers are taken into account. We earn about £4,000 million a year from our overseas visitors. Everyone gains from the quality of life resulting from the many additional amenities and attractions that are provided by the industry. Visitors help to maintain the theatre and arts for all of us to enjoy. They help to keep the cost of fares down in our transport services and to support our historic houses and gardens.

Most importantly, tourism creates jobs and helps to bring prosperity to every region in Britain. It can be a major factor in the revival of our historic inner cities. Already, 1-5 million people depend directly or indirectly on tourism for their livelihoods. It is to the labour-intensive industries, of which tourism is the most important, that we look to reduce unemployment as our ageing manufacturing industries decline and the microchip takes over.

The cost of job creation in tourism is often a great deal lower than in most other industries and in agriculture. Moreover, those are jobs that tend to endure. For those who have redundancy payments to invest, tourism offers wider opportunities than any other industry. Recent estimates suggest that international tourism will more than double before the end of the century. For Britain, with so many attractions in a comparatively small area, that can amount to a tremendous bonus. Unfortunately, last year the number of visitors to Britain fell. Therefore, while tourism is no lame duck industry seeking handouts, we are talking not only about investing in new jobs in tourism but of protecting existing jobs.

This is the first time that tourism has been debated in the House for over two and a half years. In his reply I hope that my hon. Friend the Minister will not just confine himself to a verbal recognition of the value of the tourist industry and an appreciation of all that it does. I hope that instead he will use the opportunity of this debate to show a new attitude of support by the Government to Britain's tourist industry.

I know that it is not within his province, but I hope that my hon. Friend will make a strong case to my right hon. and learned Friend the Chancellor of the Exchequer for an end to discrimination against hotel building allowances and that they will be placed on the same basis as industrial building allowances. Will he ensure that the Chancellor also recognises that tourism is the only export that bears the full rate of VAT and that it is attempting to compete against many other European countries that offer preferential rates, often zero rates, for tourist services and the purchase of goods?

Most importantly, will my hon. Friend see what can be done to ensure that grants under section 4 of the Development of Tourism Act 1969 are made available for tourist projects throughout the country and not just in the assisted areas? I say that with real feeling, because the vast majority of my constituents in Bournemouth are at present still reeling from the thought of the possible financial consequences to them as ratepayers—I speak as a Bournemouth ratepayer—of the cost of our planned new all-the-year-round, multi-purpose leisure and conference centre upon which a start is to be made later this year.

That centre is essential if Bournemouth is to reduce its dependence on the summer season and is essential in supporting the cost of servicing the needs of the elderly. I regret that it should start life among so much hostility. I recognise that it has much to do with the present unfair domestic rating system. I look forward to its total abolition. Nothing less will suffice.

I also recognise that from April Bournemouth will benefit from the new arrangements for rate support grant funding for spending on tourism, although the calculation of the grant on the number of nights spent by visitors in the town is wrong because it ignores the cost of servicing daytime-only visitors.

However, it cannot be right that conference centres, theatres and similar projects in places such as Blackpool, Southport, Harrogate, Morecambe, Colwyn Bay, Llandudno, Skegness, Plymouth and Torbay have been or continue to be financially aided by section 4 grants or Community grants and loans whereas Bournemouth never has and cannot now receive such help. It is the ratepayer who carrries the can. That is grossly unfair competition. That matter is within the responsibility of my hon. Friend's Department, too.

I understand that new options for the section 4 scheme are being explored. I ask my hon. Friend to recognise that tourism is a nationwide industry and that aid, from whatever source, should be used not merely as an instrument for boosting jobs but as an incentive for exploiting the true potential for tourism throughout the country, with each project being treated on merit.

I know that my hon. Friend the Minister will point out that the amount of money involved—about £4 million—is too small to be spread wider. I therefore urge him to treble his money for tourism, and he will find a rate of return second to none.

I seek a fairer deal, not just for some of Britain's seaside resorts but for all of them. For many of our coastal resorts, which were established a century ago, when people discovered the delights of sea-bathing, the tourist industry has remained crucial to their economy. It represents the major source of employment, despite its seasonal nature. In Bournemouth, for example, 15,000 people are directly employed by tourism, and many thousands more who are employed in the retail trades, the professions and the transportation industries rely on them.

However, there are disturbing signs of decline. Two major department stores are about to close—Woolworth's and Bealson's. Bealson's is also closing in Minehead. The company cites as a cause the declining numbers of people spending holidays in those resorts. The Pavilion theatre, which provided all-the-year-round entertainment until 1979, now opens only between October and April. Together with beach catering, a £50,000 trading profit has become a £50,000 loss within two years.

A growing number of small hotels are converting to rest homes for the elderly or into holiday flatlets. This is reducing the contribution that they make to the town's economy. The smaller hotels and guest houses, with fewer than 10 bedrooms and run by small family owners, constitute about 80 per cent. of the hotel industry. They are facing the most severe problems, and they are the most unfairly treated. It is on their behalf that I particularly appeal for help tonight.

It cannot he right that those small hotels and guest houses should pay commercial rates—rates to the council, and their fuel and energy—for the whole year, when they are open commercially for less than half the year. They regard the £960 which is added for each adult to taxable turnover by the Inland Revenue as a "board residence addition" as most unfair, particularly as it appears that this "own board tax"—as they call it—is not levied on a nationally established scale but is left entirely to the judgment of individual local tax commissioners. This is a matter which I know that my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) is pursuing with the Chancellor of the Exchequer.

The high cost of satisfying the Fire Precautions Act 1971 has and is causing tremendous hardship, particularly for some of the smaller establishments. For many of them it amounts to more than a year's profit, and I have a great deal of sympathy with their plea for low-interest loans for the alterations that they are required by law to make. The vast majority of smaller hoteliers and guest-houses owners feel that they have no choice but to accept such impositions, and they have a justifiable complaint when some appear to get away with avoiding those responsibilities. These are the so-called pirates, who do not register their private dwellings as commercial premises, who avoid paying commercial rates and tariffs, and who disregard all safety regulations. They are thus able to undercut the prices of those who are more responsible.

So I ask my hon. Friend to intitiate discussions with local authorities as to how this problem, in particular, can be tackled nationally, without the need for more bureaucratic registration or inspection, and which will not affect those who casually let for a short period in the summer without advertising.

If those are some of Bournemouth's problems, I know that there are many other seaside resorts in the South and on the East Coast which face the same problems—if not more. Many of them—like their piers—are neglected and decaying because they have failed to invest in their own future. Whereas most towns do not have to support their main industries from their rates, tourist towns have little choice but to ask their own ratepayers to pay for amenities designed to attract visitors. For local residents, this is a cause of understandable resentment. For the council, it is a choice between having to pay to sustain an employment base or the economic death of the town.

It is little wonder that people complain when they see public money being spent to direct tourists to towns like Wigan, to which they do not particularly want to go and which are not geared to receive them at the expense of those who want and need them. They are justified in asking the Government to treat tourism on the same basis throughout the country. It must be in the national interest that standards are consistent whether the visitor stays in Cornwall, Norfolk, Brighton, Bournemouth, Blackpool, Scotland or Southend.

I ask my hon. Friend to note the many practical problems faced by our tourist industry. I ask him in particular, in this Maritime England Year 1982, to show a special interest in England's traditional seaside resorts and to recognise the pleasure that they have given to so many families from the Monarchy downwards for more than 100 years. I ask him to give the most serious consideration to the unique and valuable contribution that they can make to our nation's economy for years to come.

11.15 pm
The Under-Secretary of State for Trade (Mr. lain Sproat)

I congratulate my hon. Friend the Member for Bournemouth, East (Mr. Atkinson) on choosing this important subject for debate and on the comprehensive and persuasive way in which he deployed his argument. Time permitting, I shall not confine myself to mere platitudes on the advantages to us of the tourist industry. I shall answer his points specifically and as the occasion demands. He will appreciate that this is not a major debate on the tourist industry.

I much appreciated my hon. Friend's reference to my right hon. Friend the Member for Gloucester (Mrs. Oppenheim), who recently resigned as Minister for Consumer Affairs. She remembered with particular pleasure her visit to Bournemouth last July when she met representatives of the local tourist industry.

My hon. Friend referred to the disappointing results experienced by the tourist industry over the past two years. It is worth recording that Britain still managed to attract nearly 11 million overseas visitors during the first 11 months of 1981 and that from them we earned over £2.8 billion, excluding fares paid to British carriers. If we add to this figure nearly £4 billion spent in Britain by our home tourists during the first nine months of the same year, it will be readily appreciated that we are talking about an industry of immense economic importance.

At the same time, the spending of those massive sums means, as my hon. Friend said, that tourism continues to provide a substantial source of employment. Given the industry's diversity and the extent of its secondary effects, I would not care to quantify exactly the total number of jobs involved, but it is likely to be in excess of 1 million.

What is also gratifying is that much of the industry's success has been attained by its own efforts. It has a welcome tradition of independence, based, I am sure, on the large number of small businesses which support it. The Government's own direct contribution—about £50 million for the United Kingdom as a whole in the current financial year—is channelled through the British Tourist Authority, the national tourist boards of England, Scotland, Wales and Northern Ireland and the Highlands and Islands Development Board. About two-thirds of that amount is used for publicity, promotion, research and so on, with the remainder being spent on assistance for tourism projects.

My hon. Friend referred to a number of measures which he believes may help the industry. He referred, for example, to the case for ending the discrimination against hotel building allowances and placing them on the same basis as industrial buildings.

Capital allowances for expenditure on the construction and improvement of hotels were first introduced in 1978, with an initial allowance of 20 per cent. and the balance to be written down at the rate of 4 per cent. each year. We have received requests for the initial allowance to be increased while others seek a broadening of the scheme to bring in smaller hotels—those with fewer than 10 bedrooms—and other types of holiday accommodation, for example, holiday camps and self-catering accommodation.

The Government have opened up this subject to public discussion by publishing their recent Green Paper on corporation tax. I hope that those who feel strongly about the present system will respond in a constructive way to the discussion document so that their points of view can be weighed carefully in the balance.

My hon. Friend mentioned value added tax, which is also the subject of frequent representations from the tourist industry, particularly as it affects overseas visitors. I am sure that my hon. Friend would not expect me to say much more when my right hon. and learned Friend's Budget Statement is now only three weeks or so away, but I can say that my right hon. and learned Friend the Chancellor of the Exchequer has received detailed submissions from the tourist industry and that he is giving extremely close consideration to the arguments put forward.

My hon. Friend referred specifically to expenditure on project assistance, under section 4 of the Development of Tourism Act 1969. Successive Governments, as he said, have considered it appropriate to restrict the funds available to the assisted areas because these have combined tourism potential with the greatest need for the economic benefits tourism can bring. The Government have already announced that the coverage of the assisted areas is to be considerably reduced from next August. My right hon. Friend is now considering, with his Scottish and Welsh colleagues, whether the new reduced areas will continue to be an appropriate basis for aid for tourism projects. We have received many representations about the future basis of section 4 assistance, particularly from those areas, like my hon. Friend's, which are at present outside its scope. All that I can say at this stage is that the various options open to us are being carefully considered and that the conclusions of this inquiry will be announced as soon as possible.

I note what my hon. Friend said about increasing the funds for the scheme, but he will appreciate that there is not very much room for manoeuvre at present and, whatever the outcome of the review, the scheme will have to continue to operate on a very selective basis. As for European Community funds, these are available in the assisted areas as a matter of community policy.

Turning briefly to general tourism assistance, as I have already said, some two-thirds of Government expenditure on tourism is available on a nationwide basis for promotion, publicity, research and the like. The English Tourist Board is spending some £l.2 million on promotion in the current year and has provided another £1.2 million to the regional tourist boards, including £81,000 to the Southern Tourist Board which takes in my hon. Friend's constituency. The British Tourist Authority has developed joint marketing plans with authorities and organisations throughout Britain and is always willing to consider new ventures aimed at bringing in more overseas visitors. I should like, at this point, to take up my hon. Friend's mention of the English Tourist Board's "Maritime England" campaign. It is already well under way and provides a splendid example of the excellent co-operation which exists between the statutory tourist board, local authorities, other public bodies and all sectors of the tourist industry. This campaign will be the largest and most spectacular event ever organised by the board and the country's first celebration of our maritime heritage. Maritime England is a national event but is of particular importance to Southern England where about 70 per cent. of the events will take place.

My hon. Friend very properly mentioned the situation in Bournemouth. I know that Bournemouth is a progressive resort which has made successful efforts to develop business and to provide new facilities without direct Government help. However, I understand that it has well-established links with the British Tourist Authority. The BTA has provided marketing advice for the new conference centre to be opened in 1984 and reports that it has started a research programme for possible international associations. It also expects to develop a joint scheme with the centre to attract international conference business. The authority also plans to look more closely at the scope for developing incentive traffic to Bournemouth and its environs, particularly from North America. This will be in conjunction with Bournemouth's department of tourism and publicity.

More generally, I understand that BTA's assistance to Bournemouth includes a joint scheme for producing regional folders in several languages, a proposal to run a joint advertising campaign in the Netherlands with BTA and Bournemouth contributing equal shares, and another scheme to help its languages schools. These are, of course, additional to BTA's other publicity from which Bournemouth might expect to benefit.

The rates and rate support grant matters are for my Department of Environment colleagues. I shall see that what my hon. Friend said is drawn to their attention within the context of my hon. Friend's views on tourism.

My hon. Friend referred to "own board tax". Questions of adjustments to profits for taxpayers are properly matters for my Treasury colleagues, and I understand that my hon. Friend the Financial Secretary will be writing to my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) about the adjustments made in Bournemouth.

My hon. Friend has also raised the question of what are sometimes known as pirate hoteliers. There are people who allegedly let accommodation to tourists without registering their homes as commercial premises. This is a problem which is often drawn to my Department's attention, but it is really a matter for local authorities, which have powers to curb the unauthorised use of domestic premises for commercial purposes. There are also powers to ensure that such premises comply with other statutory obligations such as health and fire regulations. There is a difficulty over providing the authorities with sufficiently firm information on which they can act, but I believe this is a problem which can be resolved only at local level.

I am sure that my hon. Friend is sufficient of a realist to have appreciated that, in a short debate of this kind, it is not possible or proper to make promises to rectify all the specific problems to which he has referred. I can, however, inform him that even in the short time that I have been responsible for this important subject I have developed considerable sympathy for the industry's views on many of these problems. My hon. Friend may be assured that I have taken careful note of the points he has made. I shall also do my best to see that the industry's case is given full and proper consideration even though the constraints on Government expenditure mean that there is little or no scope for making changes which would involve additional calls on public funds.

I should like to end by paying tribute to the many businesses and organisations, statutory and non-statutory, which together have worked to make tourism an industry of some considerable substance in this country's economy. I am confident that, despite the problems which it faces, its underlying strengths will continue to ensure that its contribution is maintained.

Question put and agreed to.

Adjourned accordingly at twenty-eight minutes past Eleven O'clock.