§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Douglas Hogg.]10.52 pm
§ Mr. Robert Hicks (Bodmin)
I am glad to have this opportunity to speak on the important subject of the future of the tourist industry in the United Kingdom. I have a personal interest in this subject, both as a west country Member of Parliament and as the parliamentary adviser to the British Hotels Restaurants and Caterers Association.
This is a most appropriate time to hold a short debate on this important topic. The Minister, whom I welcome to the front Bench this evening, is currently engaged in a fundamental and far-reaching review of all aspects of the tourist industry, the results of which are eagerly awaited. The first question that I should like to ask him is whether he can tell us when he hopes to make a statement to the House.
This debate will probably be the final opportunity that the House will have to make suggestions and proposals. The Minister has been most thorough in inviting all interested parties and organisations to participate in the exercise. I would like to thank him personally for visiting Looe in my constituency. During his visit he met representatives not only of the tourist industry but of the local chamber of commerce and trade, and he discussed many aspects of the tourist industry.
It is important to put the tourist industry into its true context, and to be aware of its contribution to our national and regional economies. I shall discuss the industry in the context of the south-west. In 1981, the south-west attracted 15 million visitors, tourists from both the United Kingdom and overseas. In comparison, 13 million people visited Scotland and 11 million visited Wales. The estimated income for the south-west from those visitors was about £885 million. A total of 160,000 full-time jobs have been created as a consequence, together with many more in ancillary activities.
On a national level, over 11 million visitors from overseas countries visited Britain in 1981. These visitors spent some £3,000,000 in valuable overseas currency—far more than our earnings from car exports. One and a half million people are employed on a regular basis in our tourist industry. I hope that the House will appreciate from those figures the importance and significance that the tourist industry has assumed.
Tourism today is big business and a successful industry. It is essentially a private sector economic activity, but occasionally it looks to central Government for some tangible encouragement. For that reason, the recent Budget was disappointing. The Government continually tell us in ministerial statements, including one by the Prime Minister, that they acknowledge the contribution of tourism to the national economy, but unfortunately that is as far as they have gone. I give three examples to illustrate the point.
First, we have constantly argued that industrial building allowances for hotels should be raised from 20 per cent. to 50 per cent., in line with the increase in industrial building allowances for manufacturing premises from 50 per cent. to 75 per cent. some two years ago. If the allowances for hotels and associated buildings were increased in that way, the revenue loss to the Treasury would be just £10 million, but many of us would argue that 643 the money generated through regained tax and national insurance contributions and in other ways would far outweigh that loss.
My second example relates to the Government's failure to zero-rate VAT in respect of charges on overseas visitors staying in United Kingdom accommodation. In a parliamentary answer to me the Chancellor estimated that the revenue loss would be £100 million. I remind the Minister, however, that tourism is an international market and that most of our European competitors operate a rate of VAT on overseas visitors to their countries far lower than the 15 per cent. that applies here.
My third illustration of the Government's failure to appreciate the significance and worth of the tourist industry to our national economy relates to section 4 assistance under the Development of Tourism Act 1969. That assistance applies to approved tourist projects, which are very important in improving the quality of tourism provision in the regions. I appreciate that in real terms expenditure on such assistance is now more than double the figure in 1972 when it was first introduced. In Wales, £2 million is now allocated for section 4 assistance. In Scotland the figure is also £2 million. Until recently the figure for England was £5.3 million. We welcome the recent increase to £8 million. That is undoubtedly a real improvement, but it does not hide the fact that there is widespread disappointment throughout the tourist industry at the Government's attitude to tourism. It is felt that little has been done to create the climate of confidence that is necessary if the industry is to prosper and develop, especially in the regions and resorts of this country that are so deserving of support and encouragement.
It is right that I should relate to the House today the generally held view of the industry that it is now looking to my hon. Friend the Minister who is responsible for tourism to turn Treasury indifference into action. That is one of the principal reasons why my hon. Friend's review of the way in which tourism in the United Kingdom is administered and operated is so eagerly awaited. My hon. Friend has already made a start with his announcement in the House on 16 March when he responded to the financial review undertaken by independent consultants on the expenditure programmes of the British Tourist Authority and the English Tourist Board. I certainly welcomed his announcement of a change of emphasis in the priorities and the redeployment of financial resources.
My hon. Friend's decision to concentrate more funds at the two sharp ends of tourism is important. I refer, of course, to the promotion of Britain overseas to attract overseas visitors and the further provision of quality tourism projects for those visitors to enjoy when they arrive here. That is being helped by the sensible and welcome increased provision of section 4 aid. I welcome also the Minister's decision to increase subvention to the regional tourist boards.
I come now to what I consider to be the major reform required in the tourism infrastructure—the creation of a single tourist authority for the United Kingdom embracing all facets of tourist infrastructure headed by a full-time professional executive chairman. The Development of Tourism Act 1969 has existed for some 13 years. Sufficient time has elapsed to enable us to pin down its weaknesses and successes. I believe that the existing structures allow for an overlapping of functions and too much bureaucracy. The present structures are less cost-effective than they should be and the enormous financial 644 resources devoted by central Government to tourism are being diverted from what must be the fundamental objectives of any tourism structure—the attraction of overseas visitors and the provision of tourist attractions in the United Kingdom.
I appreciate that primary legislation would be required to change these structures. This issue has been discussed by the all-party group on tourism. There is a general consensus that a single tourism authority would be desirable within the United Kingdom. Obviously, members have disagreed about individual emphasis. I envisage that this authority would have two divisions. The first would be an external one, whose functions and responsibilities would correspond approximately to those being currently undertaken by the British Tourist Authority. The second essential component would be the internal division. In this context I should hope that far greater emphasis would be placed on the work being undertaken by regional tourist boards. The Scottish and Welsh tourist boards should and would continue and I would hope that they would be continued to be funded by their respective Secretaries of State, although I appreciate their sensitivities and responsibilities.
I hope that the House and the Minister will agree that important overseas promotional work should be undertaken by the external division of this single tourist authority and, for the Scottish and Welsh tourist boards it should be carried out in the same way as the BT A already undertakes the external promotional work on behalf of the regional boards within England. Of course some of the work of the Scottish, Welsh and regional tourist boards would have to be co-ordinated at the centre by the internal division of the new body. However, I am certain that the individual details of that reorganisation can be resolved. Implicit in these proposals is the abolition of the English Tourist Board. It is superfluous to our future requirements. Its existing functions could be distributed and absorbed within the new body that I have outlined.
We all agree that there is an increasing awareness that tourism will play a vital part in Britain's economic future. Tourism is one of our major economic activities for the reasons that I have already outlined, with the relevant statistics to back up that view. We must ensure that new resources flow into tourism and leisure development and that our tourist institutions are capable of meeting those new challenges. I hope that my hon. Friend will tell us what his thinking is and what his hopes for the future are and so convince the tourist industry that the Government not only understand the industry but are prepared to assist in its future development in a tangible manner.
§ 11.6 pm
§ The Under-Secretary of State for Trade (Mr. Iain Sproat)
I am extremely glad that my hon. Friend the Member for Bodmin (Mr. Hicks) has taken this opportunity to bring the subject of tourism to the attention of the House. I congratulate him on what he said not least because he is indefatigable in advancing the cause of tourism, particularly in the west country and, as always, he has put forward the case for tourism extremely cogently and forcefully.
As I hope to show my hon. Friend and the House, the Government fully recognise the importance of this vital industry, which during a period of recession has held up remarkable well. My hon. Friend has also rightly concentrated on the future of an industry that has potential 645 for growth both in terms of employment and in earnings of foreign currency. My hon. Friend will understand, I know, that I am not yet able to announce the conclusions of my review of the way in which tourism is handled in this country, but I hope to do so before this month is out, if I possibly can.
Given the importance of the industry, I am conscious of the need to draw the right conclusions from the mass of evidence that has been put to me over the past nine or 10 months. I have been highly impressed by the variety and depth of the material that has come to my notice. I should like to pay particular tribute to my hon. Friend and to other hon. Members, especially those officers and others attending the Conservative Back Bench tourist committee, who have gone to the trouble to bring particular points to my attention during the review. I should also like to say how grateful I am for the views of the all-party tourism committee, chaired by my hon. Friend the Member for Christchurch and Lymington (Mr. Adley), to which my hon. Friend referred and to which I shall make a brief reference later.
As my hon. Friend knows, I have already announced some preliminary decisions on this year's funding of the two tourist boards for which I have responsibility; and which he mentioned. I decided that although the total sum available for the Department of Trade's support to tourism should be maintained at the level shown in the published estimates, the expenditure on individual elements of support should reflect a substantial change in priorities. These changes make a start in cutting out areas of waste and needless duplication of effort by the boards and redirecting their available resources. I want to see the British Tourist Authority active in overseas markets where it has earned a reputation for professionalism which is highly regarded by its peers.
At the same time, the BTA board has accepted that it should withdraw from some domestic activities which, if they need to be done at all, can be taken over by the other tourist boards, other organisations or by the industry itself. So important do I regard BTA's role overseas that I have invited its board to put proposals to me for spending an additional £1 million on overseas promotion.
I am glad to say that the board has already responded and I am giving careful consideration to its plans. For the ETB, I have decided that in 1983–84 I want to see a substantial increase in the amount that it provides in grants for tourism projects. Therefore, I recently announced an increase in the Estimates provision for that purpose from £5 million in 1982–83 to just over £8 million in 1983–84.
My hon. Friend suggested that we should have a single tourist board and he suggested doing away with the ETB. That is an extremely interesting suggestion, and I was doubly interested to hear that it has the backing of the all-party tourism committee. I am grateful to my hon. Friend for bringing the idea to my attention, and I shall consider it very carefully in the final drafting of the review.
Even though my review has not been concluded, there are certain factors that it would be appropriate to mention which will have a bearing on the final decisions. First, there is the sheer size of the industry: it employs about 1 million people; it earned in 1982, some £3.3 billion in foreign currency contributing to a total turnover of approximately £8 billion; it touches upon numerous sectors in the service industries ranging in scale from 646 transport and accommodation on the one hand, to smaller but none the less important activities such as guide services on the other. It is a changing scene—the traditional midsummer holiday at the seaside resorts developed in Victorian and Edwardian times in competition with new developments such as all-weather leisure centres and all-the-year-round short-break holidays.
Nor should we overlook those areas of tourism outside the leisure sector. In 1981, for example, business tourists from overseas constituted over 20 per cent. of foreign visitors and contributed a quarter of our overseas tourism earnings. Incentive travel is a growing aspect of business tourism, well developed in North America and with important potential for this country. It is essential that our tourist industry adapts to changing tastes and new developments. Failure to do so will have serious consequences, since it will become increasingly difficult to regain lost shares in a highly competitive international tourism market.
My hon. Friend will not need me to remind him that it is the industry—not Ministers and not the Government—which must set the pace. The Government's job is to create the framework of a favourable climate within which entrepreneurial skills can operate to full advantage. Not even the tourist boards are the doers. Their task is to act as catalysts, to bring together the fragmented parts of the vast tourism industry, and to take the lead in showing how our tourism products can best be promoted. All these efforts will be of little avail, however, if the people of Britain are not convinced of the importance of tourism. There are still too many who view the tourist as a nuisance, at best only to be tolerated.
During my review, however, I have had many occasions to meet and talk to people who fortunately have not taken that view, but have seized the opportunities which tourism brings to benefit the community as a whole. For example, in London, the development of the old Covent Garden site is an attraction as much for London residents as it is for Japanese or American visitors. Further afield, I should mention Bradford city council's pacesetting tourism development scheme. There are countless other tourism projects whose development can only add to the quality of life of the local community.
I hope that my hon. Friend will allow me to make further mention of London. It is a unique attraction in tourism terms and an important gateway to Britain as a whole. Its success in that dual capacity is vital to the health of our tourist industry in the rest of England, in Wales and in Scotland. Whatever the attractions of the rest of our country—and there is no doubt that in Britain we have the finest tourism attractions in the world—it remains a fact that for many of our first-time overseas visitors London is the magnet. On the success of that first visit will depend their attitude towards repeat visits, more often than not to other areas of the country. Everyone will benefit from London's prosperity and its success as a tourist magnet.
That the whole country has an important share in tourism is fully recognised by this Government, who decided last August that grants for tourism projects under section 4 of the Development of Tourism Act 1969 should be available on a national basis. I have already referred to a substantial increase in the amount of money available for England this year, and I shall wish to be assured that the grants are used to support projects which have the best potential, wherever they are. I hope to say more on another 647 occasion about the kind of project which should be supported from this source of assistance, but I am coming to the view that we should do more for our primary attractions, than for secondary facilities.
I have mentioned the importance of the overseas visitor, but my hon. Friend—representing, as he does so well, a Cornish constituency—will know probably better than many others that the domestic tourist is equally important to us. It is not for this Government to decree where their people should spend their holidays, but there are important economic and social reasons for encouraging our own people to spend their own money in this country.
§ Mr. David Penhaligon (Truro)
Does the Minister recognise that tourism in my part of the country will be severely restricted if trains eventually terminate at Exeter?
§ Mr. Sproat
I am sure that is true. I hope that the hon. Gentleman will raise that with those of my hon. Friends who are responsible for railway matters. It is an important point.
We must ensure that the tourist delights and attractions of our country are not solely promoted overseas. We have a marvellous product and we should not be ashamed to market it on our own doorsteps.
Let me, in summary, mention 10 factors that underpin the Government's approach to tourism.
First, the Government, the public, and the tourist industry have in the past, too often, undervalued the importance of tourism to this country.
Second, we have failed too often in the past to give enough recognition to the service industry as a whole, of which tourism is a vital part.
Third, tourism is a major growth industry of the future, with enormous potential for creating new jobs.
Fourth, tourism bestows benefits on local communities as well as on visitors from outside. The Covent Garden site that I have already mentioned is a prime example.
648 Fifth, London, like it or not—and some do not—is the number one gateway to Britain. Its promotion is crucial to the promotion of Britain as a whole. If we undersell London, we undersell Britain as a whole.
Sixth, tourism is too important to be a mere adjunct to regional policy. That is why we decided to broaden the range of section 4 grants from applying only in assisted areas to applying throughout the country.
Seventh, we must support and develop the appeal of our primary attractions, not only our hotels and secondary facilities.
Eighth, tourism is not made by tourist boards or by the Government. The dynamic of the industry depends on local interests and private sector initiatives.
Ninth, we must also emphasise the attraction of our own country for our own people far more than we have in the past.
Tenth, we should never be ashamed to say that this country has a truly wonderful product to sell. No other country can rival the variety of its tourist attraction, scenery and architecture, history and tradition, of artistic heritage, sporting and leisure facilities, theatres, galleries, museums and shops.
I hope that my hon. Friend, who has done a great service tonight in bringing this important matter to the attention of the House, will be content with these preliminary thoughts on the future of the tourist industry. I intend to say more just as soon as my review is complete, which I hope will be this month. In the meantime, I am grateful to my hon. Friend for providing this opportunity to take a look at an industry that has such an important part to play in the future well-being of our economy.
§ Question put and agreed to.
§ Adjourned accordingly at eighteen minutes past Eleven o'clock.