HL Deb 12 July 1951 vol 172 cc826-46

2.35 p.m.

LORD LLOYD rose to call attention to the present position of the tourist and holidays industry, and the difficulties in meeting the needs of overseas visitors and British holiday makers; and to move for Papers. The noble Lord said: My Lords, I hope that I need make no apology for asking your Lordships to spend a little time this afternoon in considering the question of the tourist industry in this country, because I believe that this industry is of the greatest importance, both actual and potential, to our economy. The year 1950, despite many difficulties, was a record year for foreign tourists, and but for the international situation and its deterioration the results might have been even better than they were. No fewer than 608,000 visitors from all parts of the world visited this country, which is 9 per cent. more than in 1949. While here they spent £54,000,000, in addition to the £26,000,000 which they spent on fares in British carriers on the international routes; and our total tourist earnings rose by £16,000,000, which is nearly 25 per cent. more than in 1949.

The indications this year, from Sir Alexander Maxwell's statement the other day, are that, despite a drop of about 10 per cent. in our U.S. tourist earnings, the overall position may well even beat last year's record. Apart from this, in terms of foreign currency the tourist industry in 1950 earned more dollars than all but seven of our great manufacturing industries. As I say, of these earnings 41 per cent. were in U.S. or Canadian dollars. Receipts from American visitors, including fare payments, were estimated at some £25,000,000, which is nearly a quarter of the total visible exports of this country to the United States. Moreover, since this industry is not dependent on hard currency imports of raw materials, once again in 1950 it was the chief net earner of U.S. dollars.

I feel that these figures must be a source of great encouragement and satisfaction to us all, and particularly to the Travel Association, who have done a great deal to promote this result. In that connection, I should like to say how sorry I am that the noble and learned Viscount, the Lord Chancellor, cannot be here this afternoon. I know that he wanted to be here, because he is very interested in this matter, but he has to be elsewhere. I feel that these figures show the entirely new importance to us of the tourist industry, and the vital part it has played and is going to play in our national economy. Having said that, I believe it would be a great mistake to imagine that this increase in the number of our foreign visitors is due entirely, or even mainly, to the superior facilities which we can offer compared with other European countries. In point of fact, my own feeling is (I am sorry to say this) that our facilities are still inferior in many respects to those available elsewhere in Europe; and I cannot help thinking that the increase in this traffic is due, to some considerable extent, at any rate, to more general causes.

In the last five years, there has been a much greater overall increase of visitors to Western Europe, due partly to the fact that other European nations have removed many of their currency restrictions, and, so far as American visitors are concerned, to the fact that devaluation has made European travel considerably more attractive and cheaper. This is borne out by the fact that in the last two years both France and Italy have shown a greater increasein their total tourist traffic than we have. Nevertheless, whatever may be the causes of the increase, there is no doubt that it is a fact, and a very satisfactory fact, that our tourist traffic is steadily increasing. It is my submission this afternoon that at this moment, when the industry is trying to compete with this expansion, this is the moment when the Government should be doing everything possible to enable it to modernise itself and to increase its efficiency, so that, if the present favourable trend continues, full advantage can be taken of it. If, on the other hand, a worse time should come, the industry will still remain competitive. This is the moment to act because, if the Government wait until there is a recession, the industry will no longer have the means to do the job.

I realise that to speak of the tourist industry is to speak in very wide and general terms. I suppose that any service which brings visitors to this country, or houses, feeds or entertains them whilst they are here, can reasonably claim to be a part of the industry. It would include shipping, air lines, railways, travel agencies, hotels, restaurants, theatres, historic houses, exhibitions and even fun fairs. They all have their part to play Again, since most of the services can be maintained only on the foundation of a healthy domestic trade, foreign and home aspects of the business are completely interdependent. That is a very important point. For those reasons, I felt it desirable to put this Motion down in very wide and general terms. It would be quite impossible—and I do not propose to attempt to do so—to cover anything like the whole field this afternoon, and I wish to confine my own remarks to the hotel industry. On that let me say straight away that I have no interest, either personal or financial, in any hotel. Politically, noble Lords opposite may regard me as a sinner, but they cannot regard me as a publican.

I have chosen the hotel business because I believe that it is the most important element in the whole of this industry, and because, whatever other inducements may be offered to foreigners to come to this country—incidentally, when I speak of the hotel industry I include the restaurant industry and the inns—if they are not housed properly and fed well when they are here, they will tend to go elsewhere next time. That leads me to my first point, which is that I am quite certain that we have to regard the hotel business as an export industry. If it is to succeed in the long run its standards have to be at least as good as, if not better than, those of its foreign competitors. It is no good our setting up our own domestic standard here, and saying that that is good enough. It may have to he good enough for the unfortunate citizens of this country, who have no alternative, although perhaps it is significant that nowadays a larger number of people are taking their holidays abroad. It will not enable us to compete with foreign rivals if their opportunities for development, maintenance and giving good service are greater than ours.

Let me take general development and service. Taking development first, although, since 1947, the total traffic has increased by over 40 per cent., and the American traffic by 250 per cent., there has been, in the past few years, little or no development—that is to say, new development—of hotels in this country. Indeed, I am told that there are fewer hotel bedrooms in this country to-day than there were in 1939. It is obvious that this shortage of accommodation is losing us potential customers, and that more accommodation is very desirable. On the other hand, I think that probably one of the reasons why there has been so little development in the hotel business is because of the terrific cost of building to-day, due to inflation and for other reasons. I understand that before the war it cost approximately £1,000 per room to build a new hotel in London; today, I am told, it costs upwards of £3,500. Therefore, I rather doubt myself whether, at the present time, the industry would be able, and in view of some of the other disadvantages under which it labours—to which I will refer in a moment—I rather doubt whether it would be willing, to build new hotels on a very large scale. A great deal could be done, however, by developing and improving existing installations.

At the present moment, foreign visitors tend to confine their visits to London and to a few other prominent centres in this country. That they do so is no doubt due in part to the special attractions which these centres offer. But at the same time I should not be surprised if it were not also partly due to the fact that they have a very shrewd idea that these are the only places where they can find a good hotel. If there were more good hotels all over the country, I believe it would lead to a greater dispersion of our tourist traffic and thus, without building a great deal, the country could absorb a great many more visitors. But improvements in the country as a whole are prevented by the incidence of development charge, which makes an extension or modernisation of hotel buildings uneconomic. Indeed, in this respect hotels are even worse off than the private individual, because the latter is allowed a development of 10 per cent., or 7,500 square feet, in addition to which he is allowed to develop laterally or to incorporate up to three adjoining houses of the same kind as his own without incurring any development charge. The hotel, on the other hand, is allowed only 10 per cent. development, and I feel that if we want to achieve modernisation and development in the hotel business we have to see that the hotels are at any rate no worse off than the private individual. Personally, I think they ought to be rather better off. May I just add that, so far as I know, none of our foreign competitors suffers from any similar disadvantage?

Now perhaps I may say a word about maintenance. Here again, it is my submission that the British industry is restricted in a way in which none of its foreign rivals is. It is a fact that no structural or decorative maintenance can be carried out to a hotel in this country without a licence—apart, of course, from the ordinary licence-free allowance of £100, which is granted to every householder in this country. Let me put it another way. The Savoy Hotel, for example, has exactly the same licence-free allowance as a two-rcomed bungalow, quite apart from the disparity in size and the infinitely greater wear and tear which the hotel has to stand, compared with the other building. Of course, hotels are all treated alike, regardless of the number of rooms; whether they have ten or a hundred bedrooms they have the £100 building allowance. It may be argued that it is possible to obtain a licence, and that licensing authorities are always reasonable. But, quite apart from the additional work and delay involved, my own experience is, that licences are not always easy to get, and that some licensing authorities are not always reasonable. In any case, one thing is clear: that since the hotel is treated in exactly the same way as the private house, one cannot help wondering whether the Government have any real appreciation of the maintenance needs of this industry.

I am going to suggest that, even if the Government are not prepared to vary the licensing system for structural maintenance, they ought to grant a very much larger licence-free allowance for decorative maintenance. It has been suggested that residential catering establishments, licensed and unlicensed, with not less than ten letting bedrooms, should be regarded as hotels and permitted to incur expenditure on the basis of £30 per room for rooms of 55 square feet and over, up to a maximum of £1,000 on any single property. I do not know whether that suggestion will find any favour with the noble Lord who is to reply, but I hope that he will not turn it down without reflection, because, even if he is not prepared to accept it, I think something on those lines will have to be done, unless we want the general maintenance of our hotels to continue to decline. Consider next the maintenance of furniture, cutlery and so on. So far as I know, the hotel industry is the only one which has to pay purchase tax on the raw materials of its trade. The tax varies from 33⅓ per cent. for carpets, furniture and bedding, to 66⅔ per cent. on fabrics and linen. Mirrors and electric fires carry as high a tax as 100 per cent. And, of course, the incidence of the tax increases as the basic prices rise with inflation. This is a very heavy burden, and it is one which is not shared by any of our overseas competitors. It is making it increasingly difficult for hotels to be maintained in decent condition. The argument that hotels should confine themselves to utility goods is not a valid one. In the first place it would at once put them at a disadvantage compared with foreign competitors. Secondly, utility materials are quite unsuitable for the hotel indus- try. They do not stand up to wear and tear and they have to be constantly renewed.

The Government themselves seemed to recognise those facts by two grants schemes which they prepared to assist hotels catering for United States and Canadian visitors. I believe that those schemes have now come to an end. They were a step in the right direction, but they had disadvantages: they were very complicated and, of course, applied only to hotels which could show a certain proportion of dollar-earnings to gross-earnings. The effect was to assist only those hotels which already had considerable foreign business and which, from the financial point of view, were far less in need of assistance than other hotels, whose financial need was much greater. At the same time, they were calculated to improve the amenities of hotels where there was a considerable foreign patronage, and did nothing to raise national standards generally, and thus to encourage the greater dispersion of tourist traffic to which I have already referred.

In my view, there is a strong case for relieving the hotel industry from purchase tax altogether. After all, the shipping industry pays no purchase tax on furnishings of liners—presumably because it is regarded as a dollar earner. Why, then, should the hotel industry be burdened in this way? Even if the Government are not prepared to go as far as I suggest, I hope they will go a great deal further than they have hitherto done. I do not know whether they are proposing to continue the grants scheme. I hope the noble Lord who is to answer for the Government will be able to tell us something about that. I hope the Government will be prepared to consider giving relief to all hotels, because, if not, the standard of maintenance will continue to decline, to the detriment of our dollar earnings.

I wish next to say a word about the standard of service. The object of a good hotel should be to give the best possible service to the customer, at all hours of the day or night. Unless this is the goal of all concerned, from manager to bellhop, the hotel will never be really good. If this high standard is to be given, the industry will inevitably be a hard taskmaster, and will demand long and some- times inconvenient hours from those employed. I believe that it is impossible to change the nature of the business—and this has always been its nature. On the other hand, the trade appears to have some compensating attractions, for it has never been short of labour, and has had only about two strikes in fifty years. Any attempt to impose factory conditions on the industry—the eight-hour day or the five-day week—can lead only to inferior service. That is the inevitable result.

I do not propose to-day to go into the shortcomings of the Catering Wages Act. They were fully dealt with by my noble friend Lord Balfour of Inchrye, and other noble Lords, in a debate last November. Suffice it to say that the broad effects of this Act have been to impose factory standards on the hotel industry; and they have so raised the labour costs in hotels that it is impossible for any but the largest hotels to give the service they used to do. If evidence of this is necessary, it is to be found in the fact that since 1947 no fewer than 50,000 workers have left this industry, and the result has been a catastrophic decline in the general standard of service. That was the situation last November and it is still so to-day. It is true that, since then, the Government have taken steps to ease the problems of the smaller hotels by giving relief for spread-over payments to hotels with under thirty-five bedrooms. That is a genuine attempt to help the smaller man. It will never achieve its object, however, except to a limited extent, because in so many cases the small hotels are situated near a larger hotel, and they have to pay the same wages or lose their staff.

In any case, the problem is not so much one of size as one of labour conditions and of the type of hotel. The problems of different groups vary enormously. There is the big hotel in London or Birmingham, the residential hotel, the wayside inn, and the seasonal hotel—all with different problems; and the problems between the groups differ much more than those between the various hotels within the group. If the Catering Wages Act is to work successfully, it must be reorganised on lines which will recognise those area and group problems. The whole Act needs drastically overhauling; and until that overhaul takes place our hotels will continue to be seriously understaffed and will continue to provide a service which, compared with that of most of our foreign competitors, is lamentably bad.

I have tried to put forward a few of of the problems of the hotel industry. There are various other aspects upon which I have not had time to touch—particularly certain aspects of the tourist industry. Other noble Lords are to follow me in this debate, and no doubt they will cover these points. I have mentioned some of the problems, and I have tried to put forward some solutions. The Government may not agree with my suggestions, but I hope that they recognise that these problems exist and are very serious. If they are not prepared to accept the suggestions which I have put forward, I hope they will turn their minds to finding solutions. I am certain that the problems have got to be solved, and I hope that the Government will do something about it soon, because this is a problem which ought to be tackled while the tourist traffic is on the upgrade. If this is not done, the hotel industry will decline to a point from which it will never be able to recover. If the Government are prepared to act now, they will have an opportunity, perhaps for the first time, of firmly establishing on proper foundations an industry which for many years to come will prove an invaluable asset to this nation. I beg to move for Papers.

2.59 p.m.


My Lords, in following the noble Lord, may I take this opportunity not only of thanking him for bringing up this most important subject to-day but also of congratulating him on the extraordinary clarity and completeness with which he has put the problem forward? One's only grievance is that those who follow him have very little to say that has not already been said, and said extremely well. There is only one point on which I have to differ from him. I think he said that he might be a sinner but that he is certainly not a publican. I am afraid I have to say that, while I hope I am not a sinner, I am a publican; and I must, therefore, declare my private interest at once. The noble Lord who has just sat down has told us something about the size and importance of this industry. In the figures which he gave, he concentrated particularly on tourists from abroad. That is obviously right. But we have to look at the matter even more widely than merely considering those who come from overseas, because those of us who have anything to do with any trade or industry in this country must know that the basis of an export market is the home market. I cannot help allowing my mind to wander to the many tens and hundreds of thousands of holidaymakers who at the moment are going abroad, not only taking precious exchange with them but also cutting down the turnover of our hotels in this country, the turnover that is so essential to building up the basic service which our hotels must offer to overseas visitors when they come here.

What must be our objective here? Surely it is simply to see that the hotel and catering industry in this country is allowed to be sufficiently profitable to attract the necessary capital, labour and service into it, and also to see that the incidence of costs—I will refer to those matters later—are such as to encourage and make possible the giving of the best service. As was very wisely said by Professor Knox, in his evidence before the Catering Wages Commission, it is no good encouraging overseas visitors to come here whilst at the same time allowing discouragement in its present rampant form to continue to operate against the hotels. This applies not only to capital employed in the hotels or to the employers, but equally to the workers. I wonder how many of us know that, during the last four years, not only, as the noble Lord, Lord Lloyd, has already told us, have 50,000 workers left the hotel and catering industry, but the level of unemployment, particularly in the winter months, has risen steadily. It has risen from 18,000 four years ago to 26,000 last April, a rise of just over 35 per cent.

What are the main points of attack on this problem? There is one point, I think, which is to some extent being thought of at the present moment, and which I believe is to some extent being dealt with. Therefore, I do not desire to detain your Lordships upon it, although it is worth mentioning. That is, the encouragement to Government Departments and industry to increase the spreadover for holidays, the staggering of holidays. There is no doubt that in hotel-keeping one of our greatest problems is that all the pressure comes during two or three months of the year; and those lovely months of May and June, glorious months for holidays, are hardly used at all. I do not stress that point, because a great deal of thought is going into it at the present moment. But there is another point to which the noble Lord, Lord Lloyd, has referred. It is a vitally important one. As one goes about the country staying in hotels—I am afraid that I notice it in the one in which I myself am interested —one observes a growing tendency to what I may call post-war shabbiness. The chintzes of which one was proud before the war, and which gave one's visitors pleasure in a sense of light and gaiety as they came into the rooms, now look drab. The noble Lord referred to the suggestion that hotels should always use utility goods. I disagree most profoundly with that proposition, as, indeed, did the noble Lord. The first impression that one receives on going into an hotel is almost as important as anything else.

The noble Lord, Lord Lloyd, referred to purchase tax. I speak with experience here. I hope your Lordships will not mind my speaking from personal experience, but I am interested in an hotel for which we recently had to lay new carpets, purely on the ground floor. The purchase tax— not the price but the purchase tax —on those carpets came to between £8 and £9 per sleeping room in the hotel. Imagine what a tax that is! I know the difficulty of reducing purchase tax for hotels. It is a very obvious one. With all the regulations and orders and difficulties that exist to-day, there is no doubt that a great many of our public are becoming rapidly more and more evasion-minded; and the danger, of course, is that, if a relaxation of purchase tax is given to hotels, then all the hotel-keepers will be used by their friends to collect carpets and other things cheaply without the payment of purchase tax. The Hotel and Restaurants Association have shown a readiness completely to meet that point. They have put up a scheme limiting the amount of goods to be purchased by hotels free of purchase tax to 5 per cent. of the certified receipts. I need not worry your Lordships with details, but they have suggested a number of other precautions against abuse, including heavy penalties. I should have thought that a scheme of that character was worth the serious consideration of His Majesty's Government. If they feel that the precautions against abuse are not enough, then it is for them to suggest others.

I should like to refer here to one scheme which they have put forward. Again, like what I might call the "thirty-five room variation" about which the noble Lord has already spoken, this scheme was obviously put forward with an earnest desire to help. The scheme is one of relaxations of purchase tax for hotels which have what I may call "dollar visitors." I myself looked at that scheme, and by the time I tried to understand its complications I felt that it was really quite out of touch with reality. Surely we do not want merely a few hotels dotted about the country that lay themselves out specially for set American visitors. What we want to ensure is that, when American or other overseas visitors are discussing amongst themselves where to spend their holiday, they will say: "If we go to Britain we know that not only have they that glorious countryside and that great mass of places of natural and historic beauty, but that if we go along any road, we shall find charming hotels everywhere, in which we shall get a warm welcome." I earnestly hope that the Government will reconsider this question of purchase tax, and the limitations which are imposed under what I may call their dollar scheme. I make no reference to relaxations on expenditure for decoration. I satisfy myself if the noble Lord will allow me, by saying that he spoke as one who really knows the problems and difficulties of those who are trying to produce good hotel accommodation.

Now I turn to food. It is difficult to say very much on the difficulties of rationing. So long as we have rationing I do not see that hotels can expect any better treatment than anybody else. One can only say that the shortages of food and limitations make it extremely difficult for hotels to operate the rationing system. There is, however, one very small suggestion that I should like to make here, particularly with reference to country hotels. All households and, by virtue of their size, particularly hotels have a good deal of swill. At the present moment hotels cannot themselves keep a pig and use that pig for the benefit of their clients. The hotel manager can keep a pig which can be used for him and his staff, but the pig cannot be used in the dining room. As a result at the present moment there is an immense amount of swill from hotels in the country which has literally to be buried. Some of it is sold at poor prices to local pig-keepers in areas where pigs are kept, but a good deal of it is just being buried. Could not the Government relax this provision, particularly in regard to country hotels? The noble Lord will not accuse me of making any sort of Party suggestion here, because I believe that a noble Lord on this side of the House was in fact responsible for this particular regulation. But times are different; we are no longer at war, and I do ask the noble Lord to look into that point.

Let me next say a word on what I regard as the greatest difficulty facing the hotel industry, and about which one has to speak with the greatest care—namely, the Catering Wages Act. No one can have any quarrel with the desire to impose minimum wages on an industry. Certainly, I know sufficient about the wages and conditions of some catering establishments in the past to feel that some new regulation was vitally necessary. I am sure that nobody can seriously quarrel with the imposition of overtime regulations on the industry. We know that the hours are frequently very long, and it is only right and proper that those who work in the industry should be paid extra for extra time worked. Without going into any of the great complications of the subject surely this question of the "spread-over" is the real trouble. Let me give to your Lordships one or two instances—taken, I may say, either from Mr. Tom Johnston's or Professor Knox's evidence before the Catering Wages Commission. Professor Knox gives the instance of a chambermaid who works from seven, to shall we say, nine o'clock in the morning on cleaning public rooms; from nine to midday working in bedrooms, and from seven to eight in the evening again tidying rooms. That is a seven-hour day. For that she is paid not only for a full day (with which I do not think anybody can quarrel) but because the "spread-over" is from seven to nine o'clock she has to be paid a considerable sum for that.

In most hotels, if we drive up at 5.5 p.m. we are told that we cannot have tea; and more and more as we go around we find hotels that have set out to give first-rate service having rigid hours for all their meals. It is intolerable for people who are away on their holidays, and in the spirit of leisure, to find themselves hustled out of the dining room at, say, half-past eight; yet it is very understandable in a small hotel. There may be only one person who wants to stay there after half-past eight, and yet the cost to the hotel may well be the full price of one meal, because a waiter has to remain there another half-an-hour. Professor Knox gives the example of a visitor wishing to come into an hotel at 11.15 at night; and it was worked out that to have the door open would cost the hotel 16s. for "spread-over." Someone who gave evidence before the Catering Wages Commission gave me an example the other day of two young girl teachers who went to a conference and who, because they could not get into rooms near to the conference, had to take accommodation at an hotel some distance away. They had to leave the hotel at six in the morning, and they asked for an early call. They were told that it would cost them so much to get out of the hotel that in fact they decided to get themselves out, and they jumped out of the window. Most unfortunately, they jumped out into the arms of a policeman and had to explain their position. There are other cases. Take the case of a Scottish island of which I know. There the boat leaves at seven o'clock in the morning and does not get hack until 8.15 in the evening, and generally it is late.

My Lords, it is impossible to run a service for places like this on the basis of rigid hours. What is the remedy? We admit that there has got to be control of wages and conditions. We admit that that is fair. But I should like to suggest to His Majesty's Government that they should start off by saying that this is a problem that can be dealt with very much better regionally—that is, by men with knowledge of local and regional conditions. Certainly, I should have thought that the case for a separate wages board for Scotland stood by itself. Conditions in Scotland are in so many ways completely different from those existing in England. They are different not only physically but in terms of licensing law and in many other ways as well. I should have thought that there was an almost equally strong case for regional boards in England. You can have so much smaller boards if you adopt that system. If you have a National Wages Board, you cannot possibly crowd on to such a body men who know all the varying local conditions. If you have regional boards, you will get very much better representation of varying interests and you can get men who are used to splitting up problems and looking at them in terms of local conditions.

Having said that, I must add that I cannot help feeling that even then we have only just begun to tackle the problem. As the noble Lord, Lord Lloyd, has said, we cannot look upon this industry as a factory industry. Indeed, I go further and say that we are wrong to speak of it as an industry at all. What we are dealing with is a great number of industries, beginning at one end with the lodging houses and their keepers, and going up to such great establishments as the Ritz and the Savoy at the other. And you can never hope to get one solution that will suit equally the great luxury hotel industry in the cities and the small hotels in country areas. My view is that, having regionalised the problem. you should go further and be prepared to admit that you have to group your hotels in a series of different groups. Having done that, you must go yet further, and give to your wages board powers of flexibility. You will not get satisfactory groups if you are going to have tight and straightly drawn lines of division.

The noble Lord, Lord Lloyd, has given an instance of a concession made to hotels with under thirty-five rooms. I have to declare that I have a personal interest in this matter. My hotel has thirty-seven rooms. What is going to happen, it seems to me, is that hotels with thirty-six, thirty-seven and thirty-eight rooms are probably going to close some of their rooms, to the deprivation of the public, or adopt some other tactics to gain the advantage of the concession. Then, as the noble Lord, Lord Lloyd, said, when there is a hotel with thirty-seven rooms on one side of the street and a hotel with thirty-three on the other side, the people owning the hotel with the smaller number of rooms will not be able to avail themselves of this concession, otherwise all their staff are going to walk straight across the road.

I do not propose to ask His Majesty's Government to commit themselves by any statement to-day—after all we are only discussing this matter with a view of see- ing what is best to be done—but I hope that they will undertake to look into this matter further along the lines which I am venturing to suggest. This is not a controversial subject; most certainly it is not a subject for Party controversy. My own guess is that many members of His Majesty's Government are worried to just as great an extent about this problem as we who sit on this side of the House. And according to the little information which I have, there are many leaders of the trade unions that are affected, who are wondering whether, perhaps, everything that has been done up to now has been done on entirely the best lines. I am quite sure that many of the workers in these industries are extremely worried at the way in which the industry is affected, not only from the point of view of employment, but because it has become so expensive to employ the workers on overtime that, in fact, they are not being allowed to work as much overtime as they would like. The fact is that the real problem is this. It is very much easier to weave yourself into a web of regulations than to unweave yourself out of them. That it is the problem, and it must be solved.

May I close by saying that there is one thing which I hope the noble Lord who is to reply on behalf of the Government will not say, because it has been said to me on many occasions—that is, that the hotel industries cannot agree among themselves? I have heard it said: "Why cannot they put up something on an agreed basis?" The idea that that is possible is based on the complete fallacy that we are here dealing with one industry. If you put the keeper of a small lodging-house in a room with the manager of the Ritz, clearly the two would not be likely to agree upon a policy because they would represent two completely different businesses. So I hope the noble Lord who is going to reply will not say that. Apart from this, I should like to wish the noble Lord and his colleagues good luck in their efforts. I believe that they are going to make attempts to solve this problem. And once again on behalf of all members of this House I should like to thank Lord Lloyd and to congratulate him on the manner in which he has put this problem before us.

3.26 p.m.


My Lords, I wish to refer to two aspects of the very wide subject covered by the Motion which has been submitted by the noble Lord, Lord Lloyd, in his most impressive speech. First, however, I should like particularly to support what he said with regard to the shortage of hotel accommodation and allowances for maintenance. I wish to make a strong plea that the schemes governing the sale of goods free from purchase tax to overseas visitors should be reviewed, and that visitors should be permitted to buy unrationed goods free from purchase tax anywhere in the United Kingdom on the production of their passports, or, in ihe case of visitors who have retained their British citizenship but are permanently domiciled overseas, on the production of their return permits. I have known a number of instances of many dollars being lost on account of there being no provision for that latter class. In all cases, the goods should be paid for by dollars or traveller's cheques or other acceptable currency. My submission is simply that our visitors should be enabled to purchase while they are here on the same basis as if the goods were exported commercially to their country.

The noble Lord, Lord Lloyd, has reminded us that during the year 1950 tourism was Britain's chief net dollar-earning export. I submit that it is a source of dollar earning which is capable of considerable expansion. Obviously, we should do everything possible to expand it so as to redress the contraction which is inevitable in certain sections of our export trade as the rearmament programme develops, and in view of the deterioration which has recently occurred in our overseas balance of payments. Receipts from United States tourists in the year 1950 were equal to 18.9 per cent. of the total exports to the United States, but the expenditure of American tourists in the United Kingdom compares unfavourably with their expenditure in other European countries. According to the official statistics for the year 1949, the per diem dollar expenditure of American visitors in France during that year was 17.4 dollars, in Switzerland it was 16.3 dollars, but in the United Kingdom it was only 11 dollars. I submit that the lower rate of per diem dollar expenditure in the United Kingdom is due in some measure to the obstacles imposed here on the tax-exempt purchase of goods which they desire to have.

It must be agreed that our North American visitors dislike and, indeed, resent the regulations imposed on them when they desire to make purchases free of tax. They do not always know how to get the coupons required to make such purchases. The coupons are not always available. Frequently they have to change more money at one time than they desire to change, under the rule that they must change £15 worth of dollars for every £5 worth of coupons required. And frequently they find that the shop where they wish to make a tax-exempt purchase does not operate the scheme. Generally, I believe, they regard the regulations as frustrating, discouraging and restrictive. I suggest that, through an exaggerated fear of abuses, His Majesty's Government are making it very difficult, if not impossible, to secure the otherwise potential increase in dollar earning from this source.

For more than a year the Dollar Exports Board, of which I was a member and which has recently ceased to exist in its old form, pressed strongly and unanimously for the introduction of a simpler and more reasonable scheme to replace the present regulation. But their efforts were unavailing. The possibility of abuses has always been recognised, but in view of the difficulty which the ordinary American has in buying ordinary quantities of goods under the present system, the trouble involved in obtaining coupons, which he dislikes, and the restriction in the number of coupons he may obtain, I suggest that some risk should be taken. Loss of sales not only means a loss of dollars; it means a loss of further sales that may arise when these goods are taken over to North America. Surely, if dollars are received for the purchases made, it is of little account whether the purchaser takes the goods home with him or gives them to a bona fide friend in this country, with, of course, suitable safeguards. There is another difficulty in another category. American visitors frequently wish to buy expensive furs and clothes to use at functions while they are here, or on account of the unexpected vagaries of our climate. Obviously, they do not wish to pay purchase tax on them. I suggest that it would be reasonable if they were allowed to use the clothes, or whatever it may be, while they are here, provided that they return them to the seller for despatch to their ship when they leave. I have referred to the fact that Americans are frequently frustrated in their desire to purchase goods because some shops do not operate the scheme. Of course, it would be most unfair not to state also that a large number of retailers give their full support to the scheme, and make it as easy as possible for our visitors. But throughout the country, and in some of the smaller towns visited by our American and other visitors, a large number of shops do not give these facilities; and, in consequence, sales which run to a very considerable figure are lost.

Some time ago, the Scottish Council, with which I am associated, called a conference of all retail interests concerned to consider the position in Scotland. It was clear that leading retailers were giving support to the scheme, but it was agreed by the representatives of the retail organisations that small retailers generally were reluctant to operate it, because of the extra work and difficulties involved. When one examines the documents and formalities required, one hardly feels surprised at that reluctance. Therefore, I suggest that the whole question should be reviewed. A simplification of the procedure could not fail to result in considerably increased dollar earnings and in considerably reduced aggravation for our American visitors. American visitors are allowed to take home 500 dollars worth of goods without paying import duty, and they frequently wonder why it should be made so difficult to obtain these goods.

The second matter to which I wish to refer, and which the noble Earl, Lord De La Warr, has already mentioned, is the seriously detrimental effect on the tourist industry in Scotland of certain provisions of the Catering Wages Act. In Scotland we are most anxious to make the fullest use of our historic and natural advantages, and of our close association by kinship with North America, to extend our tourist industry and so earn more dollars. The magnitude and importance of the tourist industry in Scotland has considerably increased over the past two years, reflecting the effective measures taken by the Scottish Tourist Board under the indefatigable leadership of the right honourable Thomas Johnston. Scottish opinion welcomed the action of the Minister of Labour eighteen months ago in requesting the Catering Wages Commission, as a matter of urgency, to conduct an inquiry into the operation of the Act.

In January last year., the Scottish Tourist Board, with the support of Scottish opinion, submitted printed evidence detailing the seriously detrimental effect on the Scottish tourist industry of certain provisions of the Act. In particular, they made a strong plea for the establishment of a separate Scottish Wages Board as an essential measure to overcome the major defects of the Act in relation to Scotland —defects resulting from the imposition on Scotland of regulations which may be applicable in London or comparable areas, but which simply cannot be operated in the totally different circumstances in Scotland. For instance, the short season, and other factors, make the regulations too onerous. I entirely agree, too, with what the noble Earl, Lord De La Warr, said on the importance of regional control, rather than having control from the centre. Later, verbal evidence was given to the inquiry by Mr. Thomas Johnston and Professor Knox, and no part of the factual case presented has ever been queried or upset.

Last August, the Catering Wages Commission submitted a Report to the Minister of Labour on the results of the inquiry. While the Report made some useful recommendations, it did not concede or make any answer to the urgent request for a separate Scottish Wages Board, and failed to recognise the Scottish case in other particulars. Because of the delay in giving effect to the recommendations of the Catering Wages Board, the noble Earl, Lord Rosebery, raised the matter in your Lordships' House last October, when he again pressed the case for a separate Wages Board in Scotland. The subsequent action of the Minister in asking the Catering Wages Board to examine the case for a separate Wages Board in Scotland has been much appreciated, and we anxiously await the result of the inquiry and the Minister's decision. Surely it is obvious that conditions which vary so completely as do those of London and the Western Islands and Highlands, cannot be met by uniform regulations covering the whole country, and that the wide variety of problems facing the tourist industry in Scotland, on account of transport difficulties in isolated areas, and in other ways, can neither be understood nor solved by a United Kingdom Board sitting here in London.