§ 4.58 p.m.
§ Lord Ponsonby of Shulbrede rose to ask Her Majesty's Government whether they are satisfied that the review currently being carried out by the Department of Employment into the relationship between the tourist industry and government is taking fully into account all departmental interests and the international competitive prospects for the industry.
§ The noble Lord said: My Lords, perhaps I may welcome the participation of a number of noble Lords in this last debate of the Session. I believe that noble Lords will particularly look forward to the maiden speech of the noble Earl, Lord Lindsay, who as Viscount Garnock has served for many years on the British Tourist Authority and indeed has a great many other interests in the tourist field.
§ Last July the Secretary of State for Employment announced this review on the question of government relations with the tourist industry. In doing so, he spelt out the terms of the review, which were to consider the role of government in relation to the industry, the level and distribution of the funding provided by the Department of Employment, the cost-effectiveness in relation to the Government's general objectives and the implications of that for the roles of the British Tourist Authority and the English Tourist Board.
§ In setting up the review, he said that it would obviously have to make its considerations and recommendations against the background of the 872 wider role for the Government and their wishes to see activities carried out in the private sector wherever possible. Of course, that can sound slightly ominous, but he also said that the review would not extend to Scotland, Wales and Northern Ireland, which have their own arrangements for the support of the tourist industry. However, he thought that the Secretaries of State in those areas would look with interest at the proposals which came from the review. He also said that the review would be carried out by officials of his department, the Department of Employment, working with a PA consulting group.
§ At the beginning of this short debate it might be helpful for those noble Lords who are not fully aware of the history of the development of tourist support by government over the years if I recap briefly on some of the background to the present situation. Noble Lords will be aware that the British Tourist Authority and the Scottish and Wales Tourist Boards were originally proposed in the Development of Tourism Act 1969, but as that Bill was going through Parliament it was decided to add an English Tourist Board to the network of tourist boards to be established. This was done because it was argued at the time that domestic tourism in England might suffer if a situation developed in which the BTA was devoting most of its resources to overseas promotion.
§ After the Act had been in force for some three years the then Labour Government decided to look at the role of government in tourism and a review was set up under the Secretary of State, Mr. Peter Shore. That resulted in some guidelines being established which remained in force until 1983. In 1979 the Central Policy Review Staff—the think-tank again—looked at the role of the tourist industry within its general review. It was sceptical that any improvements in the handling of tourism could make a substantial difference if economic factors ceased to operate in this country's favour and that it was not the sort of activity that lent itself to too much central planning or administration. In 1979 we also had the Department of Trade Tourism Review Steering Group, which concluded that government expenditure on any facet of tourism or promotion had not been wasted.
§ In 1982 we came to the Sproat-Lamont tourism review, so called because it was initiated by Mr. lain Sproat, who was then junior trade Minister responsible for tourism, but he lost his seat in the general election and his place was taken by Mr. Norman Lamont. Again it did not cover Scotland and Wales. The result of that review was the establishment of the current structure of the BTA and ETB with a common chairman and served by common service divisions.
§ In April 1985 the noble Lord, Lord Young of Graffham, came onto the scene as Minister without portfolio. He decided to look further into all the constraints on the development of tourism. As a result the document Pleasure, Leisure and Jobs was published in the autumn of 1985. It concluded that the main function of government was to provide a satisfactory framework within which the industry could flourish.873
§ At the same time in the House of Commons we had the Select Commmittee on Trade and Industry, which produced a report suggesting the establishment of the British Tourist Board, as opposed to the British Tourist Authority, which would replace the existing statutory boards. The Government response was that there was a need for a period of organisational stability following the 1983 tourism review and the subsequent changes.
§ Your Lordships will see that there has been a considerable number of reviews on the work of the tourism industry since the passage of the Development of Tourism Act 1969. We now move to this current review, which is the seventh, eighth, ninth, or whatever it is, review of the workings of the tourist industry since the setting up of the various statutory tourist boards in 1970.
§ Of course this review has been carried out against the background of substantial growth in the tourist industry since the late 1960s. The number of overseas visitors to Britain has increased fivefold during that time. The amount of spending by overseas visitors in this country has increased to an all-time record. It was also carried out against a background of a slight lack of consistency in government funding of the tourist boards. I say that with some slight trepidation, having my noble friend Lord Cledwyn of Penrhos sitting beside me and my noble friend Lord Parry sitting behind me.
§ The figures show that Wales receives roughly eight times as much money from the Government per pound of tourist spending as is received by England. Scotland receives about three times as much. I certainly do not begrudge, and could not begrudge, one penny of that money being spent in Wales or Scotland. However, I believe that there is a case for looking at this to ascertain whether there should be an increase in the funding made available in England.
§ There are a number of activities in the tourist field which are not capable of being self-funding within the industry and where the consumer would suffer if a short-term attitude were to be taken. I refer in particular to the provision of tourist information, the promotion of areas where there is high unemployment and the stimulation of off-peak tourism and work of a strategic nature within the industry. It is a fragmented industry. For example, there are 14,000 hotels. Small businesses of that nature, however entrepreneurial they may be, find it difficult to develop and market themselves on a national basis. They encounter difficulties when they try to do so. The Government's present role, as I have said, is to create a framework in which the industry can flourish.
§ However, there is no overall government strategy for the development of tourism as a whole and that situation is made worse by the fact that the Scottish and Wales Tourist Boards do not report through the Department of Employment. I believe that the role of the Tourism Co-ordinating Committee should be greatly strengthened to allow a greater co-ordination in the Government's activities in this sector.
§ Noble Lords will be aware that after much lobbying by the tourist boards the Government, in the form of the noble Lord, Lord Young, established 874 the Tourism Co-ordinating Commit tee on which Ministers from other government departments sit under the chairmanship of the Secretary of State for Employment. The other departments represented on this committee—it is important to recall this because it shows the breadth of the functions involved within the tourism industry—are the Department of Trade and Industry, the Department of Transport, the Department of the Environment, the Ministry of Agriculture, Fisheries and Food, the Foreign and Commonwealth Office, the Home Office, the Department of Education and Science and the Scottish and Welsh Offices.
§ Unfortunately the actual statutory boards are not involved in this committee at all. I understand that when this committee was first established by the noble Lord, Lord Young, who was then the responsible Minister, it met regularly under his chairmanship and acted as a successful co-ordinating organisation. Since that time I understand that meetings of the co-ordinating committee have been only sporadic and that junior Ministers, and sometimes only officials, attend. The other ministries do not intend to be involved in the work of this co-ordinating committee. I believe that this is the only body that exists in order to provide some form of combined effort within the tourist industry as a whole. When the noble Lord, Lord Young, was the responsible Minister he took a great deal of interest in the tourist industry and that interest of the Government seems to have faded away. I hope that that can be reversed.
§ One of the questions that one asks oneself at this time is whether the Department of Employment is the right sponsoring ministry for tourism. As noble Lords will recall, it was the responsibility of the Department of Trade and Industry until the noble Lord, Lord Young, went to the Department of Employment, when tourism became the responsibility of that department. When the noble Lord moved to the DTI, unfortunately this unit of the Civil Service did not move back with him. One may argue as to whether there is another ministry which would be more appropriate to sponsor the tourist industry. Would the Department of the Environment, which sponsors the Sports Council, the Rural Development Commission and the Countryside Commission and whose other responsibilities include inner cities, be a responsible department to look after tourism? I believe that the difficulty would be that it was not: a relevant sponsoring body for the British Tourist Authority, which would need to report to the Foreign and Commonwealth Office in view of the fact that its major role is to encourage people to come from abroad to this country and to work closely with our Foreign Office posts overseas.
§ One returns to the argument that in many ways this facet of government would be better situated within the DTI as the sponsoring department for it. One may also argue whether there should be a separate ministry of tourism. This is an argument that I have put forward before. The arguments against it are that only in the field of agriculture and fisheries do we have a separate government department sponsoring a particular industry. I believe that if more focus was 875 put on tourism, that would indicate priorities which this Government had or which any government had. If that is not possible, I believe that at least the departmental committee should be strengthened.
§ I have here many documents as regards evidence given by the English Tourist Board, the regional tourist boards other than London. I also have documents relating to the evidence of the London Tourist Board to the departmental committee. There is no evidence from the British Tourist Authority because it is rather hamstrung in giving evidence as it is also representative of Wales, Scotland and Northern Ireland, and those areas are excluded from this review. Should not the views of those other departments be considered by the departmental review if it is to be the kind of review which it is envisaged it should be? Should not the review body be widening its terms of reference in order to take on board the other considerations from the other Departments of State?
§ I shall briefly mention the success of the tourist industry. I do not wish to dwell too long on this matter because I know that other noble Lords will pick up this point. We should remember that we enjoy a disproportionately large share of international tourism. That is to say, £7 out of every £100 spent by world travellers is spent in Britain. It is important that we should defend this position in the world when more and more countries are seeking to stimulate the growth of their tourism by putting government money into new tourist attractions. The efforts made by the British Tourist Authority to double the number of tourists from the Far East in the past 10 years is commendable. It should be remembered that the balance in the invisible exports account is not always moving in the right direction. It is beyond the control of the tourist industry to decide what the exchange rate should be, but this has a very important and marked effect on the number of tourists coming in at a particular time.
§ In conclusion, I welcome the noble Lord, Lord Skelmersdale, as the Minister who is to respond to this debate on tourism. I shall be happy if he ensures that the views expressed in the House this evening are reported to the Secretary of State. I shall be even happier if the Secretary of State decides to widen the terms of reference of his review.
§ 5.17 p.m.
The Earl of Lindsay
My Lords, it is not without considerable trepidation that I rise to address your Lordships for the first time, chiefly, I feel, as it becomes progressively more difficult so to do the longer one has taken to bring it about. I assure your Lordships that this has not been caused by my own procrastination but is due to having the bulk of my business interests outside London; namely, in the United States and Canada.
Until today I have never achieved being present here to coincide with your Lordships discussing any of the subjects or industries—it is curious that they all seem to begin with the letter "T"—with which I am sufficiently familiar to use for a maiden speech. I therefore apologise to your Lordships for this time 876 lapse, but I mention something which may be more unique. Some months ago I was invited to say a few words on the Floor of the Senate in Washington, thus pre-dating a maiden speech in your Lordships' House.
Tourism's primary objective is the ability to earn foreign currency, as the noble Lord, Lord Ponsonby, said, and thus in order to do that, the ability to attract overseas visitors. The number has risen from ¾ million from the year that the Monarch came to the throne in 1952 to an incredible 15½ million currently. Heritage is thought to be the single most important aspect of Britain appealing to the overseas visitor.
The British Heritage Committee, in which I hasten to declare an interest as chairman, brings together all the heritage interests including the Department of the Environment, English Heritage (of which my noble friend Lord Montagu is chairman, and he is here tonight), the National Trust, the National Trust of Scotland, the Georgian Group, the national tourist boards and the Historic Houses Association, to name some of the members. However, the secretariat is provided by the British Tourist Authority and it is thus a good example of the BTA acting as the co-ordinating body to bring together diverse tourist interests. More important still, the BTA, by loaning staff and helping with finance, played a large part in setting up the HHA in 1975 to assist owners of historic houses and other important properties over their relations with the Government.
The BTA actively promotes the heritage overseas, and was instrumental in launching the open-to-view ticket, with North America and Australia the main markets—and good value it is too! For £22, a visitor to this country has a choice of seeing upwards of 600 properties during the month of his stay. The mind boggles at his mental and physical exhaustion should he decide to visit every one of those properties. Next year the ticket will be marketed as the Great British Heritage, and sales are expected to reach a total of £500,000. This is an excellent example of how the BTA acts as a catalyst in putting together a project for the overseas visitor which would not otherwise be available.
Perhaps it should be said that there is another side of the coin in that some small minority of visitors might well benefit from an historical education. The following episode illustrates this need. A group of tourists visits Windsor. Their guide's voice is drowned out every so often by a jet taking off from London. An American accent is heard to say, "How silly of the Brits to build their dinky little castle right under the airport flight path"; or again, a character in a group learning about the signing of the Magna Charta at Runnymede in 1215 looks at his watch, turns to his wife and says, "If we hurry, dear, we can just be there in time to witness it". However, it is, I hope, only a small number of visitors which fails to benefit from this great heritage of ours.
The BTA works closely with the national and regional tourist boards in promoting Britain overseas. Such liaison with the grass roots is essential as they have detailed knowledge of what is on offer to the visitor. Due to the enormous number of places available for tourists to visit, a vital piece of the 877 jigsaw is provided by the tourist information centres, mentioned by the noble Lord, Lord Ponsonby, funded by regional boards and local authorities and providing up-to-date information for a visiting tourist. One of their main functions is to provide lists of accommodation available locally. In many instances they act as booking agents. All of this means that an enormous amount of information has to be stored. This needs to be retrieved quickly to answer the thousands of queries put to the staff at TICs. Here it is also appropriate to mention the BTA travel centre in Lower Regent Street, which carries information about the whole British Isles.
Thus the BTA, as the Government's chosen instrument for promoting the United Kingdom overseas, is also responsible for ensuring that the product is fully competitive with other countries worldwide, and is marketed accordingly. None of us on the BTA board at the time will ever forget the terrifying lesson learnt in the late 1970s when the United States, whose government withdrew from supporting tourism, experienced a drop from 13 per cent. to 10 per cent. in the world tourist market. This gave rise to a disastrous loss of both visitors and currency.
With regard to the servicing of tourists, probably the most important single sector is transport. Without good transport links tourists would be discouraged, to say the least, from visiting us. When it was announced that the Channel Tunnel would be built, the BTA immediately saw the enormous potential for additional traffic to Britain. It set up a Channel Tunnel National Tourism Working Party to examine the potential for traffic and the problems that would need solutions. The chief organisations on this working party are Eurotunnel, British Rail and the Department of Transport.
Earlier this year the tourist authority published its first—and indeed the first—consultative document on the tunnel. It was appropriately entitled The Channel Tunnel—An Opportunity and a Challenge for British Tourism. The report stressed that the comfort and convenience of this new transport mode, whether by rail, or car and coach shuttle, must be accompanied by ease of travel and provide the tourist with what he wants. It highlighted areas of concern—that transport should continue to be zero-rated for VAT purposes; that duty free sales should be retained in the EC; the need for a dedicated high speed link rail route from Folkestone to London; and that Customs and immigration controls should be carried out on the train, not only beyond London but also into Waterloo. Since publication, there are indications that the high-speed line will be built.
However, the Government still insist on airport-style controls at Waterloo, which will add to journey time and irritate passengers, not to mention our being the laughing stock of Europe. As an old railwayman I feel saddened that we shall be the only country in the Community to refuse on-board passport and Customs inspections on its trains. If these functions can be carried out on trains to northern destinations, they could also be carried out on the London ones. A two-and-a-half hour journey from Paris gives longer 878 time to check undesirables than an airport-style queue at Waterloo.
Tourism is diverse, made up of some large operators but mainly thousands of small businesses. The former include airlines, shipping services and hotel groups. The majority of businesses involved in tourism are small. There are 180,000 self-employed people running hotels and restaurants. This corresponds to the figure of 14,000 hotels given by the noble Lord, Lord Ponsonby. All of them need help and encouragement; and above all, marketing. Tourism makes a remarkable contribution to employment. At present 1.4 million people are thought to be employed as a direct result of tourism. This number is increasing at the rate of 1,000 a week and will continue to do so for as long as the economy grows at 3 per cent. to 4 per cent. per annum. However, these service jobs are most at risk in any downturn. Of all the money spent by the Government, that spent on tourism is possibly the most cost-effective pound for pound. After all, the 15.5 million visitors brought in £6.2 billion of foreign currency last year. The Section 4 infrastructure grant is a tool that the Government have to ensure that the regions develop according to a plan, which would not he the case were Section 4 to be abolished, leaving development therefore entirely market driven.
Finally, tourism is extremely fragmented and needs a focal point if it is to be effectively marketed. The British Tourist Authority and the English Tourist Board fulfil that important need. The Government should continue to give full support both financially and through working closely with them via the appropriate government departments, many of which, as has just been stated, have responsibility for a particular sector of tourism. There is nothing more effective than reinforcing success.
I am grateful to the noble Lord, Lord Ponsonby, for making it possible for me to make this maiden speech on such a vital subject.
§ 5.28 p.m.
§ Lord Montagu of Beaulieu
My Lords, it is my special pleasure to congratulate the noble Earl, Lord Lindsay, on his extremely well-informed maiden speech. Perhaps because of his modesty he did not tell your Lordships that he was for many years a member of the British Tourist Authority and is still closely connected with it. I hope that the noble Earl will give the House the benefit of his wisdom in future debates on this important matter.
I am sure that we all saw the need for this review. Those of us in the tourist industry certainly welcomed it. However, I think it is important to realise that the tourist industry comprises several principal segments—accommodation, transport and attractions. Within each of these segments there is a vast range of disparate elements. Most of the industry comprises small businesses; it is not just the major names, such as British Airways, THF and British Rail, although they tend to grab the headlines.
The important thing is that the industry has no leadership, except as provided by the English Tourist Board and the Scottish and Welsh Tourist Boards, and no forum except for the regional tourist boards. 879 I should just like to say a few words about those regional tourist boards, and perhaps at the same time I ought to declare an interest in that I am president of the Southern Tourist Board.
The regional tourist boards are a unique tripartite arrangement between local authorities—which, incidentally, are becoming increasingly active in tourist matters as they see the great economic potential in them—the private sector and national government funding, dispensed through the English Tourist Board. Without that central funding, it is extremely unlikely that an effective partnership between local authorities and the private sector will continue. It is the English Tourist Board that provides the essential balance, or catalyst, between the tourist agencies and the Government. Most important, it is objective and takes certain matters out of local politics.
Certainly none of those small businesses could effectively market themselves without the comprehensive national and regional schemes which the English Tourist Board initiates and promotes. For instance, the board is trying hard at the moment to introduce standards, such as inspection and quality grading for hotels. It is extraordinary that, despite the fact that it has been on a voluntary basis, the English Tourist Board's current classification system for hotels has already attracted more than 10,000 accommodation units; that is, hotels, guest houses, and so on. Those involved in this ETB scheme now vastly outnumber the long-established and famous schemes established by the motoring organisations.
Many people think that recently the Government have been adopting a rather hands-off role towards the industry. I think that they have tried admirably to create an enterprise culture where businesses help themselves, with restrictions removed. If the ETB did not exist, there are several vital activities which would never be undertaken; for example, by a trade association which would not be able effectively to involve and represent the interests of those small businesses.
I believe that the vital central roles which must be retained are the co-ordination for national policy initiatives, such as the Cities Tourism Programme and the Rural Tourism Initiative; national promotions such as "Let's Go"; research, which is most important to provide a comprehensive profile of the industry; and improved in-service training—indeed, the whole of our tourist future depends on having the right people with the right expertise, all in the pursuit of excellence—and minimising mutually competitive, self-interested activities by individual regions.
The Government seem, quite rightly, to be looking most closely at the Section 4 grant aid—that is, the grant aid given to tourist activities—despite the fact that the cost per job evidence shows it to be one of the most successful job creation plans ever. The availability of grant aid has stimulated many projects which were marginal and which otherwise would not have gone ahead. Several initiatives have been truly catalytic, such as the Center Pares development and the budget hotel accommodation.
880 Moreover, tourist development action plans which have been created by local authorities have often been inspired by the influence of Section 4 funding. However, most grants are now made on a repayable basis; in fact they are really interest-free loans. In any event, the funds distributed by the state are averaging less than 20 per cent. of any particular scheme and are on an average of not more than £50,000. That is minute compared to some of the other grant aid which is dispensed by the Government through—some of us think rather uncritically—other channels. For example, the urban development programme gave one hotel in Birmingham £6 million. We all admire what Birmingham is doing, but I can only think that if a hotel in Birmingham cannot stand on its own feet, then there must be something wrong; it should not need £6 million for one hotel.
However, I have no doubt at all that ETB would be a very inexpensive and effective organisation if it could be freed from some of the Civil Service restrictions on its operations. Then let it be trusted and assessed for its effectiveness. In that way I think we would improve the English tourist product.
I should like to conclude by saying that there is one jewel in the crown of British tourist promotion; that is, the British tourist authorities overseas. However, since my noble friend Lord Mountevans will shortly be speaking, I think that I shall leave that matter to him. Nevertheless, I can say from a personal point of view that they are much admired and envied by all other countries which have overseas operations to organise.
Since the war we have seen a most remarkable growth in an industry which comprised virtually nothing, and one which was despised, to one of the most important in the country. By all means let us have a review, but please do not let it spoil what has been a great success story.
§ 5.35 p.m.
§ Lord Mountevans
My Lords, I must declare an interest and I should like also to echo the words of those who have already thanked the noble Lord, Lord Ponsonby, for giving us an opportunity this evening to debate tourism and the current review. I should also like to thank the noble Lord, Lord Montagu, for the generous tribute which he has just paid to my colleagues. It may interest your Lordships to know that my very first job in the tourist industry was polishing his car when his by now marvellous museum was but a pair of Nissen huts.
I should also like to congratulate my long-term friend Lord Lindsay on his maiden speech. He gave us the benefit of his very wide knowledge of tourism with a great deal of verve, leavened with a little transport which particularly appeals to me. I look forward to hearing very much more from him, especially in transport debates.
As has been said, tourism is one of the biggest industries in the world and it is one of the most competitive. I should like to suggest that it impinges in various ways on the lives of all of us. In Britain it makes a major contribution to employment, it contributes to gross domestic product and to the balance of payments. In employment terms it 881 accounts for some 6 per cent. of the labour force, as we have been told, with particular strength in the small business sector.
The jobs which we are creating in tourism perhaps run to 50,000, or very many more per annum—indeed, I suspect that the statistics do not tell the whole story—while in balance of trade terms tourism represents a twentieth of all our exports and perhaps a quarter of all our invisibles.
I mentioned that tourism impinges on all of our lives. In our daily lives its impact is most significant. I have discovered that visitors provide some 20 per cent., £80 million, of London Undergound's total fares income, which would otherwise have to be found either by increased fares or higher subsidy.
In 1986 visitors purchased 37 per cent. of all seats sold by the theatres and membership of the Society of West End Theatre. In the same year, according to the fine china and glass producers, some 30 per cent. of their retail sales in this country were to foreign visitors. The latter also contributed in that year almost £1.5 billion to our British air and sea carriers.
I would suggest that there is scarcely an industry—I have named only a few—which does not benefit from foreign tourism. Further, many of the services that we take for granted would either be very much dearer than they presently are, or would be of a very much poorer quality were it not for the income received from tourism.
Looking at a back number of The Times published some 20 years ago, I was struck by a Pan American Airlines' advertisement proclaiming the transatlantic launch of the Boeing 707. Significantly the first routes with a daily service to and from New York were to be to Rome, Paris and then London. Pan Am clearly believed, as did many others at that time, that Italy, then France, and then only Britain, were the countries where profits, not least from US outward-bound tourism, were to be earned.
At that time France and Italy earned more US tourism dollars than we did. They also did better in Europe in terms of European tourism income, due in part to their land frontiers. At the time we were only eighth in terms of the league of tourism earnings welcoming, as we have been reminded, some 5 million visitors. Today we earn more tourism dollars than France and Italy combined. Last year we were fifth in the tourism earnings league, welcoming over 15 million visitors, a fact already referred to. That was despite the British climate and our island status.
Every twentieth person anywhere in the world who left his country as a tourist, came here and, in coming here, left behind over £5.5 million, plus the revenue to British carriers that I have already mentioned. We earn more from foreign tourism than Greece, Portugal, Yugoslavia, Australia and Turkey to name but five fashionable tourist destinations, combined. While Europe's share of global tourism earnings is in slow decline, Britain's share holds steady in a bad year and otherwise is on the increase. That is no accident. Rather it stems from a series of strategic decisions made by the British Tourist Authority and from the support we enjoy from British and foreign trade.
882 We have sought to develop markets, and thus traffic, before our competitors get round to doing so. With some 40 per cent. of our earnings from Europe, 30 per cent. from North America and 30 per cent. from the rest of the world, Britain is well positioned to withstand the ravages of external factors such as terrorism, weak currencies or Chernobyl. All those factors have, at one time or another, had a major effect on our American traffic, but we have been able to offset that effect by spreading our investment.
The noble Lord, Lord Ponsonby, reminded us of the growth of traffic from the Far East that we have experienced over the past 10 years. 'Whether one agrees with the Economist intelligence unit or the mandarins of American Express that Japan and the Far East will overtake North America as a major source of tourism, our traffic from those sources is a valuable insurance against downturns elsewhere and a solid basis upon which to build for the future. We have taken the lead in this missionary work. The industry is slowly but surely coming in behind us.
The authority sees things not only in terms of the market place but in terms of new segments. Again, while traffic has grown by 28 per cent. in the past decade we have worked hard on the senior citizen market which has grown by 85 per cent; while business traffic, reflecting the growth in our conference and incentive business, has grown by 65 per cent. Not only do markets and segments change, so do travel habits.
Although London will always be Britain's greatest draw for the first time visitor, tourism is increasingly reaching out not only to the rural regions but to the industrial heartland. Perhaps surprisingly, bed nights spent by visitors in London showed no increase between 1977 and 1986 while those spent in the regions and provinces grew by 13 per cent. The top 20 British cities in tourism terms now include Birmingham, Glasgow, Manchester, Leeds and Newcastle—a tribute to the authority and to the work of the cities themselves. Similarly, we are succeeding in changing the time of travel—the peaks. In 1970, 44 per cent. of our visitors came in the summer peak. That figure has now fallen to 36 per cent.
It would be wrong for those of us who work in the engine room of the British Tourist Authority to claim that all those achievements are our doing; but nearly 30 per cent. of visitors from abroad have obtained information from our offices overseas, while a further 50,000 each month visit our travel centre to which the noble Earl, Lord Lindsay, referred. So we have a significant influence on people's habits. Furthermore, the fact that British and foreign industry put up over two-thirds of our marketing expenditure seems to me a powerful recognition of the fact that industry recognises the strength of what we are doing, and is willing to sow in the furrows which we, sometimes initially alone, have ploughed.
The Addison rules are such that an engine room hand must be circumspect, and so I have concentrated on stressing the importance of tourism and the role of the BTA. Of reviews, I would say only that, they are not in themselves bad. They make the revieweds think, and they can change the reviewed's 883 ethos and methods. In his opening remarks, the noble Lord, Lord Ponsonby, reminded us how many times we have been reviewed in recent years. I should merely like to say that being reviewed can be very distractive in terms of getting on with the job.
§ 5.45 p.m.
§ Lord Parry
My Lords, it is a great pleasure to he able to thank my noble friend Lord Ponsonby of Shulbrede for giving us the opportunity in the dying hours of this Parliament to discuss the most important industry in this country at this time. It is significant that in the last debate of this Parliament in this Chamber we should be discussing the important and valuable tourism industry. It is also a joy to welcome and applaud the maiden speech of my old friend who sits opposite, the noble Earl, Lord Lindsay, with whom I have shared in several manifestations a number of different roles in the tourist board. I welcome also the technical men; for example, the noble Lord, Lord Mountevans.
The noble Lords, Lord Ponsonby and Lord Mountevans, pointed out that life in the statutory tourist boards in this country can be a goldfish bowl existence. Shortly after I became chairman of the Wales Tourist Board we had the Beryl review, occasioned by the arrival of a new government with a new mandate to look carefully at the so-called quangos (the boards) to see what they were doing. Beryl pronounced the Wales Tourist Board to be an effective and cost-effective body.
Within no time we had another significant review which has been referred to—the so-called Sproat review—from which so many rumours emanated and which seemed to pose so many sinister threats that it was referred to in the industry as the "Deep Sproat" report. In some ways it was a helpful review. We were given a continuity of interest that was valuable to us. We then had two more reviews. There was that of the Select Committee on Trade and Industry which encompassed all the tourist boards; and then a long and thorough review of the Wales Tourist Board by the Select Committee on Welsh Affairs. The Wales Tourist Board, in particular, must feel—I say this now I have left—that it is never out of the goldfish bowl of government scrutiny.
I was especially pleased that the Secretary of State for Wales, in his response to the Select Committee report, endorsed with conviction the crucial and leading role of the Wales Tourist Board. It is a conviction based on the history of the job that he holds. The noble Lord, Lord Cledwyn of Penrhos, who is present, was the Secretary of State who presided over the major changes that moved the boards from their voluntary status to their statutory status. The noble Viscount, Lord Tonypandy, who has left the Chamber only recently, built on the foundations provided by the noble Lord, Lord Cledwyn.
The multiplier of my noble friend Lord Ponsonby—his surprise that Wales should be eight—times better provided for than some of the regions of England—is interesting and historic. It shows what good providers Secretaries of State for Wales are. 884 There are other reasons which I shall discuss in a moment.
The current review is fundamental. It goes into the very raison d'être of the British Tourist Authority and the English Tourist Board. I address my opening remarks principally to the work and role of the British Tourist Authority of which I was ex-officio a member for six years. I should also like to say a few words about the Government's attitude to the tourist industry generally.
The United Kingdom earned £6.25 billion from overseas visitors in 1987. That is more in real terms than the oil industry. And at least more capital remains in this country. The figure is 19 per cent. more in real terms than we earned in 1977. That year, we attracted some 12.25 million visitors. Last year we attracted 15.5 million, an increase of 25 per cent. The outstanding performance over the past 10 years is an endorsement of the efforts of the British tourist industry to win new overseas markets. Over a slightly longer period (from 1970) we increased our world market share from about 6 per cent. of the total spent on tourism to 7 per cent.
I apologise to the Government Front Bench for giving figures which they may have planned to give. It shows how impartial I am when I make such remarks. I mean impartial in the real sense.
§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Skelmersdale)
My Lords, good facts bear repeating; bad facts do not.
§ Lord Parry
My Lords, I thank the Minister for that remark. He is kind and considerate. That outstanding performance over the past 10 years is an endorsement of the effort of the British tourist industry to win new overseas markets. Over a slightly longer period from 1970, we increased our world market share from about 6 per cent. of the total amount spent on tourism to 7 per cent. I have said this twice. That is a very considerable achievement when we bear in mind that so many new tourist destinations were emerging. This success by the industry also reflects the support and leadership which it has been given by the British Tourist Authority, which is also represented in the Chamber tonight.
I remind my noble colleagues that the BTA is the only organisation which promotes Britain as a whole overseas. As has already been said by my other noble friend Lord Montagu of Beaulieu, it is the envy of the world for its professionalism. Moreover it is extremely cost-effective, as the Wales Tourist Board has proved to be. It currently has a grant-in-aid from the Government with which it has to run not only the central marketing campaigns and its activities in Britain but also to maintain some 27 overseas offices. However, it raises almost double this sum from the industry in joint marketing efforts of one sort or another.
However, its very success may have sown some seeds of doubt. Although I hope otherwise, that may be the reason behind the current review. Some people may be tempted to believe that, given the industry's 885 success, it can be left to promote itself overseas without any government direction or intervention. I have heard that argument made. As I said at the time, this would be naive in the extreme. Any tourism marketing primer will tell us that one has to promote both the product, which is what the industry does, and the destination. The two are essential and complementary. Every other country which either has or aspires to have a major tourist industry is actively promoting that country as a tourist destination. Rather than facing any threat, even if only an implied threat, the Government should be ensuring that nothing is done to reduce the ability of the BTA in this respect. Its resources should be enhanced to help the UK meet the challenges of the 1990s.
There are two challenges to which I shall refer shortly which present great opportunities, but there are also potential threats. The first is the Channel Tunnel. If we are not able to make the necessary arrangements to benefit from this opportunity others will. The arrangements will include improvements to the road and rail networks to enable the dispersal of incoming tourists from the South-East. Also, and perhaps crucially, they must include greater activity, led by the tourist boards, in marketing Britain within the EC.
The other development of the 1990s will undoubtedly be the growth in long-haul holiday travel. Currently it is our fellow EC citizens in the Federal Republic of Germany who are the greatest international travellers in terms of total expenditure. However, in the 1990s we shall see the Japanese visitors moving beyond the Pacific basin, which they are currently dominating, to become world travellers on a very significant scale. Unless the BTA's ability to market the United Kingdom as a destination is enhanced, we shall lose out in this market and lose the increasing share of world tourism that we have been steadily gaining over the past approximately 15 years.
However, the success of the British Tourist Authority has led to difficulties in other directions. It has performed extremely well in raising revenue from the industry to finance its activities, but that has been at the expense of running joint marketing schemes with a great deal of rigidity in their requirements. For large tourism operators, and particularly those based in the more affluent South-East of the country, there is often little difficulty in providing the resources to join with the BTA in marketing schemes overseas.
In the more peripheral parts of the United Kingdom such as that in which I live, the structure of the industry is very different. The predominance is of small, diverse family businesses which have simply not had sufficient resources to meet the BTA's exacting requirements. To be fair, the BTA has recognised this, and has put special efforts into helping the regions of England, Wales and Scotland to market tourism more effectively overseas. But much more can be done in this respect if the BTA has more resources with which to do it. When one bears in mind that the grant-in-aid to the British Tourist Authority—and this is one figure which I should not dream of leaving out of the debate—is but 0.00368 886 per cent. of total overseas earnings from tourism, it does not seem much to ask. When one thinks of how industry and the capital brought in from industry are represented in government support, of course that figure is derisory. It does not seem much to ask that it should be increased.
There are other rigidities within the present BTA system which I hope the review will address. In 1984 the Scottish Tourist Board was afforded legal powers to supplement the BTA's marketing activities overseas. The English regional tourist boards can also operate in this way, and they do. At the time when I was chairman it was felt that the best course for Wales was to work through the BTA by improved administrative arrangements to increase the marketing profile overseas. A great deal of improvement has undoubtedly been made. My successor, Mr. Prys-Edwards—a figure in Wales in both Welsh and English, if noble Lords understand the significance of the remark—has been a great success. Further improvement, we believe, now depends on Wales being afforded the same powers as Scotland to supplement the work of the BTA. The Select Committee for Welsh Affairs recommended such a course and I very much hope that it will be one of the outcomes of this review.
I should like to turn now to the inter-relationship between incoming tourism and domestic tourism. Domestic tourism is the tourist industry catering for United Kingdom residents. My noble colleagues will bear in mind that in terms of turnover, domestic tourism is still the more important partner, with a figure of £6.75 billion in 1987. Unless the domestic industry remains healthy, the profit margins will not be sufficient to provide the standards and facilities which will continue to attract the incoming visitor.
The domestic industry has suffered from fluctuating fortunes over the last 15 years It has been exposed to fierce competition from package holidays in the sunshine destinations of the Mediterranean and has lost about one-third of its business when measured in terms of nights spent. However, it has, largely by its own efforts, but with some small but very significant support from the Government, pulled itself up by its own bootstraps by developing new markets. We have seen the industry, led and supported by the tourist boards, develop the short-break holiday markets and improve the quality of the product so significantly that consumers have been prepared to pay more. In consequence, and notwithstanding the huge loss of business in long holidays, the earnings of the domestic industry have increased by 16 per cent. in real terms over the last 10 years. What if British industry over all had done as much?
I mentioned that the help to the industry by the Government had been small. The noble Lord, Lord Skelmersdale, will accept that this is not a political point, nor is it intended to be disparaging. It is simply a reflection of the fact that the amount of direct support that the Government make available to this industry for capital investment is limited to under £20 million a year by way of Section 4 assistance under the Development of Tourism Act and some urban grant, where applicable. I do not disparage that figure of £20 million, at least not on the money I have earned 887 in my lifetime. However, Section 4 of the Act is the best tool for the economic redevelopment of an industry that I know of in all the provisions that are made for industrial regeneration in this country. As the boards have come to know how to use it, they have also found out how to make it a multiplier so that it attracts far more money, sometimes as much as 12 times the money they themselves spend under the Act.
That figure is nothing in comparison with the support that manufacturing industry has received. Nevertheless, it is extremely significant, especially in the peripheral parts of the United Kingdom. I know from my experience in the Wales Tourist Board that there are many projects which have improved the quality of tourism provision by small family operators who would not have gone ahead were it not for the grants and loans from the Wales Tourist Board. There is a rumou—we live in the days of rumour, whether unfounded or not—that the Government do not currently look with favour upon this form of support for the tourism industry. If that is the case, I urge them to think again and to look more deeply at the structure of the industry and the role that Section 4 has played in bringing about the improvements of quality that we have achieved over the past 15 years. There is never a finite end to the need to improve the quality of the product. That objective must constantly be pursued and will become ever more important if we are successfully to meet the challenges of the 1990s that I spoke of earlier.
There is another rumour to the effect that this review will ultimately lead to fundamental changes in the structure of government support for the tourism industry in the United Kingdom, including legislative changes which may affect the position of the current national tourist boards. Having been chairman for six years of one of the four constituent national tourist boards and having sat for that time as a member of the British Tourist Authority, I believe that the Government would be well advised not to contemplate terminating the autonomous position of the national boards for Ireland, Scotland and Wales.
Over the past 20 years practically, the autonomous position of the Wales Tourist Board has undoubtedly led to significant improvements in the industry in my country and to the contribution it makes to the general economy. The Wales Tourist Board is the senior of a number of organisations which have been set up since then to reflect the special identity of Wales within the United Kingdom. That applies to Scotland, too. Scotland and Wales are nations with languages and cultures which are part of the marketing product. Those factors are in themselves effective.
The interests of the Welsh tourism industry are certainly best served, in my opinion, by having an autonomous board, as are those interests in the other countries. That was recognised, I believe, by the speedy response of the Government to the Select Committee on Trade and Industry report when it came out with a proposal which would have ended the autonomy. I hope in winding up the debate that the noble Lord, Lord Skelmersdale, can confirm the Government's position on this matter.
888 In apologising for a 16-minute speech, may I say that I have not spoken at length in your Lordships' House for a long time. I have listened to much longer speeches, so I hope that noble Lords will forgive me. I wish to emphasise that the Government should take the opportunity of this review to improve our ability to market the United Kingdom as a tourism destination. That must involve a greater commitment by the Government, not a lesser one. The temptation must be resisted to change for change's sake. We need an effective British Tourist Authority to market overseas, supported by national and regional boards which can spearhead the operation to improve quality and standards. By all means let us take the opportunity of the review to remove the rigidities in the present system; but let us not throw out the baby, whether Welsh. Irish, Scottish or English, with the bath water.
§ 6.2 p.m.
§ Lord Brocket
My Lords, although it is said that a little knowledge is a dangerous thing, over the past 10 years management of my family home as an international conference venue has given me an insight that I would not normally have expected to gain into the fears and needs of the foreign visitor to this country. Furthermore, as we have heard, tourism is the second largest industry in this country, second only to the financial services sector. Bearing in mind how much of your Lordships' time has recently been spent on endeavouring to improve the financial services of this country, I think that the subject of tourism should be treated every bit as seriously. Thankfully, it is a subject that is more easily understandable.
This debate provides an important opportunity to see how we can best ensure that the UK not only remains an attractive destination for businessmen and tourists, but that it also emerges unscathed, and even considerably enhanced, following the opening of the Channel Tunnel and our full participation in the single European market—notwithstanding the fiercer competition from other destinations. I have to express some concern that the Department of Employment's inquiry is limited to England for very obvious reasons.
If we look at the present situation in some depth, we will see that we are not very well prepared for any increase in the level of tourist traffic. Our roads cannot even cope with our own domestic levels of traffic. It is imperative that if we wish to encourage visitors to our shores we do not do just that; in other words, leave them on the shore and politely apologise for not being able to get them inland because of our road, rail and air link problems.
Furthermore, if visitors from say, Lyon, cannot see the possibility of travelling to Penrith, Stirling, Pitlochry or Llandudno in under the time it takes to get to the South Pole, then one does not have to be a genius to be able to work out the average Austrian or Frenchman's decision regarding travel to Britain. With the advent of the Channel Tunnel and our full membership of the single European market in 1992, pressures on our infrastructure will reach, in my opinion, crisis point.
889 The French have stated their intention that rail journeys from Paris to London and the rest of the UK should compete with air travel. This may seem to them quite a modest intention given the advanced state of their rail network together with the fact that the total journey time from Paris to London by air, including airport travel and waiting, is currently three to four hours. However, it appears that they had not reckoned on our current state of affairs. To achieve that stated intention and for us to ensure frequent visitors from abroad, we shall have to ensure that certain measures are taken. New smooth rail lines will have to be laid, particularly in the South-East, to make the "boneshaker specials" a thing of the past. We must have faster trains that come somewhere near the standard of Continental rolling stock. There will have to be rail lines passing through London to avoid repeated changes. As your Lordships know, any good claret decanted too often will soon pass its prime.
Finally, we shall have to provide sensible Customs arrangements. There is current talk of tipping everybody off on to the platform with their luggage before allowing them back on to the trains to proceed with their journey. That talk is certainly worrying. As it is normal to cross Europe without being spilled unceremoniously on to platforms five or six times—only a knock on the door being necessary to have one's passport checked—we should be looking at the same simple solution. Furthermore, if one can cross the Berlin border with Customs officers on the train, I am sure it is possible to cross London the same way.
Our roads, as your Lordships must be fully aware, are already overcrowded. The worst example is the M25, rightly known as the "world's longest car park". Having enticed, cajoled and otherwise persuaded our overseas friends to come here, what will be their reaction to that situation? Their guesthouse in the Lake District or their conference hotel in Bradford may be very charming but, unless they have great patience and time on their hands, I doubt that they will attempt the same travelling feat again. They may, of course, have been warned in advance in which case they will probably not even attempt it in the first place. Last week an American guest joked with me:It took three hours to cross the Atlantic in your wonderful Concorde and 2½ hours to complete the last 29 miles via the M25".As with the rail links, so it is necessary that superior road links should enable a quick passage past London, ensuring not only that the visitor sees the attractions of Britain north of London but also that the economy of the rest of Britain benefits from the ever increasing demand of visitors. It would be quite wrong for any review to ignore this factor. We would be denying a large sector of the economy substantial economic benefits: we would, in effect, be shooting ourselves in the foot.
As regards marketing Britain, the tourist boards do good work. But there is still much to be done to strengthen awareness of Britain's attractions as a leisure and business destination. The rural parts of the country, and the cities, look increasingly to leisure 890 and tourism for their economic future. Who would have thought, even 10 years ago, that Glasgow would be a major tourist attraction? Major programmes to support these necessary changes are the responsibility of the Department of the Environment, the Department of Trade and Industry and the Ministry of Agriculture.
The review provides an opportunity for the expertise of the British Tourist Authority in the international market and that of all the national tourist boards in the domestic market to contribute to those programmes and to ensure that tourism elements are well founded and closely focused. Those contributions should be reflected in the report which will, no doubt, be published following the review.
Much of our tourist industry is made up of small businesses, as we have heard. The statutory tourist boards provide a range of essential services which help those businesses to prosper. Many are far too small to promote themselves overseas or lack the experience and resources to secure funding for investment. It is important for those services to continue so that tourism as a whole can make its vital contribution to our balance of payments and to employment.
Lastly, I turn to the subject close to the heart of the Department of Employment—training. It is essential to make sure that those already in the industry and those young people wishing to join the industry have every opportunity for proper training and to further their professional skills.
Your Lordships may have noticed that people no longer laugh at the British chef, Noble Lords may perhaps remember the definition of heaven and hell, in which heaven is described as having French chefs, German mechanics, Italian lovers, British police and Swiss organisers, and hell as having British chefs, French mechanics, Swiss lovers, German police and Italian organisers. All that has changed--although I cannot of course speak on behalf of the Swiss lovers! But there is still plenty of room for improvement in other areas, especially languages. It is no longer acceptable merely to speak loudly at a foreign visitor to make oneself understood.
Bearing in mind the importance and size of the industry, I cannot understand why tourism comes under the umbrella of the Department of Employment. Tourism already involves the Department of the Environment, the Department of Employment, the Ministry of Agriculture and the Department of Trade and Industry, and the Department of Trade and Industry would surely be more relevant. I hope that one day we shall see a ministry for tourism, thereby reflecting the industry's true worth in our economy.
In conclusion, I am saying that we must strive to make the goods in the shop window a major attraction. Having done so we must make sure that the street outside the shop leading to our door is well signposted and accessible. I ask that in its aim of further improving the industry the review of this immense and very important subject takes into account the points that I have raised.
§ 6.12 p.m.
§ Lord Graham of Edmonton
My Lords, it is a pleasure and privilege to speak in this debate and not least to follow the noble Lord, Lord Brocket, who has introduced with considerable humour and skill the wide panoply of this very important and timely Question tabled by my noble friend Lord Ponsonby. I believe that the debate has been illuminated by specialist knowledge of many sectors of the tourist industry.
Two years ago I attended for the first time an annual conference of the Association of British Travel Agents. Although I was aware that the industry involved more than just travel agents, I was amazed at the breadth of involvement of those concerned with the travel business. I believe that we have learnt that today from those who have spoken from past or present knowledge of the industry and a special interest in it.
I should like to begin by putting on record my appreciation of the great job which the Minister, John Lee, is doing in this area. It is not invidious to make comparisons with others who have a job to do and do it well, but it strikes me that he is very busy and is very energetic. I intend to quote from at least one of his speeches. He has said some very wise things. I know that he is held in the highest regard in the travel industry and his ministerial colleagues ought to be aware that any criticisms which are made of the general set-up in no way reflect on the Minister.
It is not possible simply to leave it to previous speakers to introduce statistics of one kind or another. As I look at the papers it seems to me that we are debating a success story. However, I share the apprehension of my noble friend Lord Ponsonby concerning not only the terms of reference but also the Statement that was made by Mr. Norman Fowler in July when he announced the review. The first paragraphs of his Statement eulogised and set the achievements of the tourist industry in their proper setting. He then said, in effect, that the industry had become so successful that it had to be taken apart, not only to examine how it had achieved that success but also whether it could be done better. The noble Lord, Lord Mountevans, made a telling point when he said that one can pull a plant up by its roots too often simply to find out how it is getting on.
I was deeply concerned when the Minister said that the review was to be seen:against the background of the wider role of Government and its wish to see such activities carried out in the private sector wherever possible".Privatisation—which I do not believe has been mentioned directly in the debate tonight—must therefore be on the agenda in one form or another. I am heartened by statements from Ministers that financial support for the tourist industry may not be what is at stake but that it may be a question of doing things better or differently.
I should like to encourage the Minister to ask his ministerial colleagues whether they cannot do a little more and do what the noble Lord, Lord Brocket, suggested; namely, to look beyond the most attractive areas of Britain from the tourists' point of view and see whether something more cannot be done 892 to encourage those who have come from abroad to look at some of the other places that are worth looking at. I have in mind the Glasgow Garden Festival and the Liverpool Garden Festival, and the Beamish Museum in Northumberland which received the Museum of the Year Award last year.
I declare an interest because of my association with the Co-operative movement. I have here a brochure entitled Northern Welcome which is an attempt by the CWS (Co-operative Wholesale Society) travel group and many others who would like to shift the current concentration on the South-East as a gateway into Britain and on the airports and roads in the South-East. The noble Lord, Lord Brocket, drew special attention to the M.25. There are problems on our roads, but I should like to hear the Minister tell us that he recognises that the other beautiful areas of the country such as the Lake District, the Northumbrian coast, Scotland and a great many of our industrial heritage areas should also be given some support.
When John Lee opened the "See Industry at Work" conference in September he said:One personal crusade of mine is the development of modern industrial tourism: manufacturing and commercial firms opening themselves up to visitors by setting up properly organised and designed visitor facilities. For many years our ceramic, glassware and distillery companies have been doing this, but there is an enormous potential for others.Modern industrial tourism will add a new dimension to the country's burgeoning £18 billion-a-year tourist industry".There are many illustrations of that aspect in the brochure Northern Welcome and there are some fascinating possibilities. Those of us in this House who recognise the beauties of Scotland, the Lake District and the Yorkshire Moors and many other areas will want the Minister to say that besides simply wanting that £18 billion to grow and the 15 million visitors to increase, he also recognises the industrial and social consequences for the rest of the country. I believe that there is an opportunity for the Minister to say something helpful on that point.
I mention Northern Welcome in the context of Manchester airport. Quite frankly, it beats me why there is not the co-ordination in all these matters that we all want to see. I speak in the presence of my noble friend Lord Underhill who is sitting on the Front Bench and who understands airport policy far better than I do. I want the Minister to say something helpful in recognising how better we can use our national resources by considering these matters in a national context. Certainly I think that it would be very well received.
I follow the noble Lord, Lord Brocket, in his remarks on the impact of tourism in this country. He underlined the importance not only of employment—we know that one and a half million people directly or indirectly earn their living from tourism—but also of quality and improvement of standards. I am somewhat disturbed to see the extent of the lack of drive by government and other agencies to improve the quality of the product overall.
We all know the imperatives for large companies. By their very nature they want to increase their profitability. They know that they must have the best—the best receptionists, the best chefs and the best entertainment managers. But there seems to be a 893 great gap between big companies which, because they need to survive, recognise that fact, and small businesses of which there is an enormous range.
The quality of those who serve on the British Tourist Authority and the tourist boards is very impressive. They understand the business. They earn their living—when I look at some of the names I see that they have made millions—from running very successful companies. We are not short of men and women who understand how to run successful businesses. I am not very sure what the Government hope to achieve by disturbing the successful industry that such people can quite rightly claim to have established.
As regards the level of remuneration within the tourist industry, I am not very happy with the fact that in the catering industry there are many people who do not get well paid. There are many people who help to make our tourist industry a success by running hotels efficiently; they do not get well paid. I am not happy at the abolition of the wages councils. Nor am I pleased with the manner in which the Government have acquiesced in the wider design of encouraging more people to come to this country, sometimes on the backs of the workers in those industries. I should like the Minister to say something which will he of help to those people on whom the tourist industry must depend. They are not captains of industry; they work in the kitchens, often under very poor conditions.
I conclude by admitting that the Government can rightly claim to have done as much as anybody—the Minister will probably claim far more—to try to make our tourist industry one of the best in the world. A great deal of encouragement is obtained from the statistics. However, I am afraid that the Government are locked into a pattern which is a feature of this Administration. Wherever they can they want to throw off the business of management. They believe that there is no better solution than to leave wholly and completely to non-governmental agencies the business of making a profit, or otherwise. I ask the Minister, who has my highest regard in respect of this and many other matters: why not build upon what we already have if we want to increase the national "take" and make sure that we improve?
The point raised by the noble Lord, Lord Ponsonby, in his Question is very pertinent, as also are the factors mentioned not least by the noble Lord, Lord Brocket, of the Tunnel and the advent of 1992. They are very real and earnest matters. The Minister can take pride in the fact that we have been successful in attracting people to this country. However, the British Tourist Authority talks in terms of attracting not 15 million but 21 million people to this country by the year 1994. Many noble Lords have raised the point: what about the roads, the railways and the transport infrastructure? And what about making sure that not only are people attracted here but that they come back again and again?
A phenomenon of the past 25 years, in which I have participated, has been the cheap package tour abroad. Sunshine is the big attraction, but I manage 894 to travel around the country and spend two or three nights in various places and enjoy them. We want British people who so desire to be able to go abroad for a holiday, but we also want to attract more people from abroad to this country for a holiday. We want them to come not just to see Shakespeare country or Devon or the Tower of London but to visit other places also. We want to do something to draw them up to the Northumbrian and Durham coasts and to encourage them to see some of our national institutions. I am glad to see present my noble friend Lord Dormand, I hope that the pause has been suitably registered.
§ Lord Dormand of Easington
My Lords, I am happy to state that I am vice-president of the Northumbria Tourist Board.
§ Lord Graham of Edmonton
One learns something new every day, my Lords. I think the Minister has some searching questions to answer about the thrust of government policy on this matter. Britain is in competition with other countries. There is also competition among its own people as to the places at which they want to spend their hard-earned money. I am all for encouraging people to have a proper holiday, and people in the North in particular, as well as other parts of the country, to enjoy some of the boom that has been visited almost gratuitously upon the South-East. I look forward very much to hearing the Minister's reply.
§ 6.28 p.m.
§ Lord Auckland
My Lords, at the end of a very politically charged Session it is opportune that we should have a debate on a topic that is almost immune from party politics. The House will he grateful to the noble Lord, Lord Ponsonby, for having initiated this important debate. I have no financial interests in the tourist industry to declare, but I have close family involved in the hotel business in Scotland and family involved in the hotel pub trade. However, I stress that I myself am not a financial beneficiary. In fact sometimes the contrary is the case, but I make no complaint about that.
The Motion that we are discussing is a technical one. The debate has turned out to be a fairly general discussion on the tourist industry, which is all to the good, but there is the problem that the tourist industry seems to embrace a great many Ministries; the Home Office for work permits and so on for hotel staff; the Department of the Environment for the maintenance of historic buildings, to which we encourage our tourists; and the Transport Ministry in regard to our roads.
My noble friend Lord Brocket made a most pertinent observation about the M25 motorway. Living as I do less than a mile from Junction 9, which is the Leatherhead turn-off, I know full well that in the rush hour anybody trying to get to Heathrow (which, after all, brings in a great proportion of our tourists) faces real problems, particularly if held up at Staines or somewhere similar. This is not a debate on roads and we have had a number of discussions on that topic; but while the M25 is a much needed and 895 an effective road, from the point of view of transportation of tourists and others it creates some horrendous problems.
I should like to devote a few remarks to Scotland. There has been a 16 per cent. increase in tourism to Scotland from the years 1986 to 1987. Those were the last figures provided by the report of the Scottish Tourist Board. About £400 million of revenue came in in 1987. Mention has been made of catering. I believe that catering is all-essential to tourism. My noble friend Lord Brocket made some very witty and apposite remarks concerning British chefs of years past. Two decades ago those remarks would have applied. However, it is a very encouraging fact that in a number of our leading hotels virtually all the principal chefs are British. This is not always publicised as much as it should be because British chefs can turn out not only our own excellent British food but food from other nations, and do so most effectively.
One of the Finnish banks with whom I have some association employed a girl chef. She went to Finland for a week to train in Finnish cooking. At this bank some excellent Finnish food is enjoyed not only by the locals when they come over, but also by a number of British people and other nationalities. Cooked as it is by a British cook, I believe that it is a major achievement and a contribution to our tourist industry. Those who go to Scotland regularly—which, alas, I now do not—know the virtues of a full Scottish breakfast which I believe to be one of the finest meals in the world.
§ Lord Auckland
My Lords, I am glad my noble friend endorses that remark. That meal keeps one going for the rest of the day and possibly the following night as well. This is another example of the way in which catering has improved the image of our tourist industry.
On hotels, much is said about the very large hotels and the very large hotel chains. However, I believe that our tourists also go in increasing numbers to our smaller family-owned hotels. Some of the finest catering and most comfortable rooms are to be found in these establishments.
Bearing in mind that this is an Unstarred Question and not a subject for full debate. I rest my case in the hope that when the report is published—and we have not had the advantage of seeing it—we can promote the image of our tourist industry throughout the United Kingdom to our many overseas visitors in an even more convincing way than we seem to do now.
§ 6.34 p.m.
§ Lord Skelmersdale
My Lords, I welcome the opportunity we have been given today by the noble Lord, Lord Ponsonby, to debate tourism and to set the review announced by my right honourable friend the Secretary of State for Employment on 18th July in context.
I am very grateful to the noble Lord for asking this Question and for all that he has done for the tourism 896 industry through his excellent work with the London Tourist Board and the London Convention Bureau, even if during the course of this debate I had the somewhat irreverent thought that if Noel Coward rather than Lerner and Loewe had written "My Fair Lady" we might now be singing the song "Why can't the English teach their children how to cook?"
I must agree with my noble friend Lord Auckland that our cooking has become much better in recent years. Before replying to specific points raised by noble Lords I should perhaps say a little about the industry and its competitive position. I hope that it will help to answer in the affirmative that part of the noble Lord's Question which asks whether the review takes into account the international competitive prospects for the industry.
First, let me say that the tourist industry does not stand still. It is developing all the time through new markets, such as industry tourism: by opening up some of the fascinating places of work in our country, from distilleries to factories; and through time share developments, the first of which was established in Scotland in 1975—a development in which my noble friend Lord Lindsay has been closely involved. We congratulate him on that and on his maiden contribution this evening. It is catering for speciality and minority interests and is increasingly attracting new investment to provide superior accommodation and all weather attractions and facilities for all visitors. In the first six months of this year, the English Tourist Board estimated nearly £2 billion worth of new construction work was completed or currently under way. That investment shows a confidence in the market for tourism.
The confidence is well merited. Last year a record 15.4 million visits were made to this country. Overseas visitors spent a record, not £5.5 billion, as the noble Lord, Lord Mountevans, suggested, but over 10 per cent. more. The figure, I am advised, was £6.2 billion. The industry's turnover was nearly £18 billion. However, I take the point of the noble Lord. We are well aware of the sensitivity of the exchange rate in this connection.
As we have heard, the industry employs about 1.5 million people. The number of people working in tourism is increasing all the time. The number grew by over 50,000 in the year to this June. These are by no means all low pay, low skill jobs. They are jobs which offer opportunities. They include managerial and professional jobs.
I should tell the noble Lord, Lord Graham of Edmonton, that the Government have no plans at present to abolish or change the wages council system. The legislation, as he knows full well, is being kept under review. However, tourism is growing worldwide, not just in Britain. The noble Lord, Lord Ponsonby. made this point. People have more money to spend. Travel is easier and cheaper. Holiday destinations are increasingly becoming more exotic. In the year 2000 it is estimated that tourism will be the world's biggest industry. These are not government estimates, but they demonstrate the opportunities. This evening your Lordships have put flesh on the bare bones of this remark.
897 However, the tourism industry cannot simply sit down and wait for the rewards. Since new products and new destinations are appearing all the time, the tourism industry must adapt and develop constantly. That is the position on international competition to which the noble Lord referred in his Question.
Similarly, government cannot stand still if they are to help the industry to make the most of the opportunities for creating wealth and jobs. It is therefore entirely appropriate that we look again at government support for the tourism industry. This has remained essentially unchanged in spite of the many reviews to which the noble Lord, Lord Ponsonby, referred over the 20 years since the Development of Tourism Act 1969. I agree with the noble Lord, Lord Graham, that we need to build on our success, but we have to identify that success and make sure what we are building upon.
It was music to my ears to hear the comments of the noble Lord, Lord Graham, on my honourable friend Mr. John Lee, who spends 80 per cent. of his time on tourism matters. The Department of Employment takes tourism very seriously as a creator of 51,000 jobs in the year to June 1988. These are good reasons for the departmental responsibility for the tourist industry being allowed to settle down. If I may paraphrase one noble Lord, as a horticulturist by training I do not like uprooting for uprooting's sake.
I can tell the noble Lord, Lord Ponsonby, that in my view it does not particularly matter who does it, so long as the job is done properly. He asked about the Tourism Co-ordination Committee and suggested that it meets less frequently than it used to and that it is less effective. I am advised that it has always met twice a year since its inception in March 1986; it will next meet on the 23rd of this month. The effectiveness of that, or any other body, will of course be considered as part of the review.
I do not think it would be right for us to forget that, as the Unstarred Question recognises, help for the industry comes from a variety of sources in the public sector as well as directly through the tourist boards. We are taking these interests fully into account in the review. Support for the industry shows in ways as diverse as erecting tourist signs, which is the responsibility of my right honourable friend the Secretary of State for Transport, experimenting with immigration pre-clearance to speed people's journeys, which is the responsibility of my right honourable friend the Secretary of State for the Home Department and promoting clean beaches, which is the responsibility of my right honourable friend the Secretary of State for the Environment. Noble Lords will be able to give other examples.
I agree with my noble friend Lord Brocket and the noble Lord, Lord Parry, that the Channel Tunnel is a major development which the industry must exploit. I have no doubt that my right honourable friend the Secretary of State for Transport, as well as other colleagues in government, will take careful note of the points that have been made in this connection. Certainly, I see it as an exciting project which the industry must use as a catalyst to entice our 898 European friends to this country. I would add that it is vital at least to maintain, but hopefully to improve, the position where twice as many British people go to the Continent as European people come here, as is the case at the moment.
Nor must we forget that the tourist industry has benefited, like all our industry, from the Government's successful handling of the economy and the stimulus to enterprise and job creation which that has given. Furthermore, the industry has benefited, like all our industry, from the steps the Government have taken to reduce the burdens of bureacracy and red tape—most recently those set out in the White Paper Releasing Enterprise (Cmnd. 512), published by my noble friend the Secretary of State for Trade and Industry on 2nd November.
I should also mention the able and dedicated support given to the industry by my honourable friend the Minister for tourism. He does much to publicise the importance of the industry for jobs and for the economy. Government support is important, but the Government's policy is clear: the private sector must take the lead. My noble friend Lord Lindsay, in his excellent maiden speech, mentioned the Historic Houses Association, which I believe is a good and successful example of what I feel is right for the industry. I agree that members play a major role in expanding the range of tourist attractions in this country by opening their houses to visitors, and indeed publicising this fact.
So, as I was saying, the private sector must take the lead. There is nothing new in that policy. It was stated in Pleasure, Leisure and Jobs, the 1985 report on tourism by my noble friend, the current Secretary of State for Trade and Industry. I quote:The Government believes that the best way it can help any sector of business flourish is not by intervening but by providing a general economic framework which encourages growth and at the same time removing unnecessary restrictions or burdens".It was repeated most recently in Tourism '88, published by the Department of Employment, in May this year before the review was announced. I therefore do not wish to claim that the achievements of the industry since 1969 are the results solely, or even mainly, of government action in this field. The industry itself has done a great deal to promote itself and to generate interest and investment, with the support of the English Tourist Board, the other national tourist boards, the British Tourist Authority and of course the 12 non-statutory regional tourist boards in England. They of course include the body to which the noble Lord, Lord Dormand, referred in his intervention. The review will be considering all these issues.
However, there is one issue that I have not yet touched on which is just as vital for the industry's future. That is competitiveness. The industry's prime resource is people, and the Government are offering help from the Employment Department Training Agency. This includes, for example, the young people supported on the Association of British Travel Agents YTS scheme, 77 per cent. of whom go into jobs afterwards. There are many thousands who have already come forward to take up the opportunity which will offer training places to up to 600,000 people, giving them the skills that are still in 899 demand—not least of course in the tourism industry. The Government are also supporting the industry-led Tourism Training Initiative, which is bringing the industry together to discuss how to satisfy its skills' needs. That will help the industry to grow and to create new jobs. The industry is working with Government in training and in all the other areas I have mentioned. The review is aimed at continuing that partnership.
Partnership of course means listening to the industry. Indeed, this evening it also means listening to your Lordships. The review team has now seen over 100 people from the industry, representing large and small interest groups, and has had representations from more.
In the consideration of this review, I observe that the noble Lord, Lord Ponsonby, believes that Scotland, Wales and Northern Ireland should be included. That of course is a matter for the respective Secretaries of State. The review team, I am glad to be able to tell the noble Lord, has heard as a matter of course the views of the respective tourist boards. Reports are being made to the territorial ministers through the Tourism Co-Ordination Committee and of course by other means.
The noble Lord, Lord Parry, asked for a commitment to maintain separate Welsh and Scottish boards but, as the noble Lord, Lord Ponsonby, made clear in his opening speech, this review is not concerned with those boards. No doubt the Secretaries of State for Wales and Scotland will take note of the noble Lord's speech, and I shall make sure that it is referred to them.
We entered into an interesting discussion at one point on the per capita expenditure on tourism in England as compared to Wales and Scotland. However, we do not appear to have a representative from Northern Ireland among your Lordships tonight. I thought it would interest noble Lords to know that expenditure in Northern Ireland per capita is approximately seven times more than that in England currently.
I believe it was the noble Lord, Lord Graham, who made the point about the need to encourage tourists to go to the non-traditional tourist destinations. I am sure that my noble friend Lord Brocket would join with me in agreeing with him. Of course the objective of both the British Tourist Authority and the English Tourist Board is to spread the benefits of tourism throughout the country. One example might be the Great English City Breaks campaign, which receives support from the English Tourist Board and is helping to bring visitors, for example, to Liverpool, Hull, Leicester and various other cities. I am told that the English Tourist Board will be launching a campaign in the New Year to promote inner city tourism aimed at Cleveland, the Black Country, Manchester, Sheffield and certain inner London boroughs.
§ Lord Graham of Edmonton
My Lords, I am more than grateful to the Minister for telling the House that he and his colleagues would want to see this aspect of tourism increased. Will the Minister enter a more positive note? There is a difference between 900 wanting to see tourism increased and doing something about it. If the Minister is telling me that there are plans afoot to do that, will he also bear in mind that in those areas where they may require this there will be a call for local money—local ratepayers' money and public expenditure? The Minister should take on board the fact that money which is spent to encourage tourists to come from abroad to those places that they might not otherwise visit is money well spent. It will not only attract tourists but will improve the environment and possibly work prospects as well.
§ Lord Skelmersdale
My Lords, in recent years the noble Lord, Lord Graham, and I have had countless arguments about the cost of economic developments falling upon ratepayers and I take his point. I said that the intervention of both the British Tourist Authority and the English Tourist Board, and the back-up Section 4 grants which have been so praised this evening, are involved in spreading the load and increasing the visits to those traditionally unvisited areas in our country. I am sure that that is right.
Many of the English Tourist Board's tourist action programmes and strategic development inititatives are already aimed at inner city areas. The ETB has an efficient and effective rural tourism strategy which was launched earlier this year and it is doing a remarkable job.
The industry and your Lordships will wish to know when the results of the review are to be made known. It is a matter for my right honourable friend the Secretary of State for Employment to decide. The review team is due to report to him at the end of the year and he will need to consult colleagues, as the noble Lord's Question suggests. He will make announcements as soon as he is able thereafter.
In conclusion, I should point out that I detected a slight tremor of apprehension running through many of your Lordships' speeches tonight. While I do not believe that there should be cause for concern, I shall take up the request of the noble Lord, Lord Ponsonby, and seek to turn my right honourable friend's considerable mind to your Lordships' concerns. In that connection, I am grateful to the noble Lord for recognising the fact that this is my first appearance at this Box speaking on this subject. Therefore my usually free-ranging comments have been slightly curtailed, but I can assure the House that in respect of employment that will not last for much longer.
I shall ensure that the debate is read by the review team. There is every indication that the tourist industry will maintain and develop its competitiveness so that it can continue to grow in importance to the economy and to create new jobs. The review is essential in helping the Government to make effective their support for this successful industry. The review takes account of its position at home and internationally. It is taking account of the various departments concerned. The contribution of noble Lords has helped in the process of discussion and, as I said at the beginning, I am accordingly grateful.