HC Deb 09 May 2002 vol 385 cc271-2
10. Mr. Paul Tyler (North Cornwall)

What analysis his Department has undertaken on the impact of (a) the slowdown in the world economy and (b) the exchange rate with the euro on the tourist industry in the south-west of England. [53552]

The Economic Secretary to the Treasury (Ruth Kelly)

The Government fully appreciate the difficulties that last year's world economic slowdown, the tragic events of 11 September and the persistent weakness of the euro have posed for businesses dependent on tourism in the south-west and in the rest of the UK. However, the Budget forecast is for a considerable strengthening of the world economy during 2002 and into 2003 and, alongside a number of initiatives that the Government have introduced to promote British tourism, that should help the industry to recover.

Mr. Tyler

May I ask the Minister to concentrate on the impact of the exchange rate on the tourism industry, especially in the south-west? Does she recognise that irrespective of whether this country enters the euro, the euro has now entered this country, and is having a dramatic impact, not least on the holiday industry? Has she examined the study published in October 2001 by Caledonian Economics for the British Tourist Authority, and does she accept its conclusion that if we had a realistic exchange rate, the holiday industry could generate 51,000 more jobs and increase its earnings by £1.76 billion?

Ruth Kelly

I point out to the hon. Gentleman that 80 per cent. of visitors to tourist attractions in the United Kingdom are domestic tourists, so the most important thing that we as a Government can do is to create the conditions in which domestic tourism will thrive. Of course we recognise the impact of the slowdown in the world economy, the weakness of the euro and the tragic events of 11 September. In fact, since 1997 the value of the pound has depreciated against the dollar, and American tourists, who are so vital to certain aspects of the tourist industry, should have been encouraged by the exchange rate effects that the hon. Gentleman mentioned.

Mr. David Laws (Yeovil)

Although the Minister's comments on euro policy were typically enlightening, does she agree that they were not as enlightening as those made earlier this week by a senior Minister at the Department of Trade and Industry, who is sitting not far away from her, and who said that within two years we would have joined the eurozone?

Ruth Kelly

I have already explained to the House the Government's policy on the euro. That policy will be determined by Britain's national economic interests. We must carry out a rigorous and thorough assessment of the five economic tests. Then, if those tests are satisfied, we will have the triple lock of Cabinet, Parliament and the country through a referendum. That is the Government's policy, which remains unchanged.