§ 8.45 p.m.
§ Lord Mountevans rose to ask Her Majesty's Government what they propose as the future role of the statutory tourist boards.
§ The noble Lord said: My Lords, I should like to say at the outset how delighted I am to see that tourism can still generate an impressive list of speakers in this House for what has in effect become our annual debate on the subject. I should also declare an interest at the outset in that I am a consultant to and former employee of the British Tourist Authority.
§ I have put down the Unstarred Question because of my concern, following the Autumn Statement, at the apparent disparity in funding for the statutory tourist boards. While the British Tourist Authority and the Scottish and Welsh Tourist Boards had their budgets increased to modest degrees and for differing periods, that of the English Tourist Board was reduced, with severe cuts in public expenditure survey figures for 1994–95 and for 1995–96. The cuts imposed on the ETB followed an internal Department of National Heritage review of the British Tourist Authority and the English Tourist Board.
Ever since I have been associated with the tourist boards they have been subject to review. There have been at least eight major reviews of government support for the tourist industry since 1972 when I first became involved, plus at least two Select Committee reports. I have excluded Northern Ireland from those figures. A ninth review, on the arrangements for tourism in Scotland, is currently under way. Five reviews of the BTA and the ETB and the two Select Committee reports have all occurred since the early 1980s. Some reviews have been conducted in the secrecy of Whitehall which means that neither the tourist boards nor the tourist industry have been able to contribute. One point that I should like to make briefly in that context is to remind your Lordships of what one Mr. Gerard Fiennes, sometime general manager of the Western Region of British Rail, said in a book which, alas, led to the early termination of his career:
When you review and when you reorganise, you bleed". That point cannot be stressed enough.
§ All the reviews have concluded that there is a continuing need for government to support the work of the BTA overseas. I should like to pay tribute to my former colleagues in that authority. Its achievements are the envy of our competitors worldwide. Whatever preconceptions we have of ourselves as a tourist destination, it is fairly amazing that we are the sixth most popular tourist destination in the world. In recent years the BTA's professionalism has been reflected in its achievement of the status of top tourist office twice in the USA. It has been voted top tourist office in Australia. Last week it was voted top foreign tourist office in Ireland. It has won numerous other awards for its exhibition stands, its use of technology and its films and literature. It is recognised as a highly professional and competent—indeed, a world-leading —body.311
§ I welcome the Government's support for the BTA but in doing so I should point but that it has a problem at present. Although the devaluation of sterling has made this country more affordable for overseas visitors, particularly from key markets such as North America, it has also had the effect of reducing the BTA's resources for spend overseas, a position which, as noble Lords will know, has worsened in the last few days. The relatively small grant-in-aid increase given to the BTA this year is not enough to compensate for this, nor for inflation in overseas markets or for competitive pressures.
§ The BTA does its best. Its resources are limited, but last year it used its £11 million-worth of funding for marketing activity to attract some £16.5 million from non-governmental sources—carriers, hotel companies, local authorities and many other organisations —which is again testament to its competence. The commercial sector would not support the authority if it was not extremely good. Taken together, those figures come to more than £27 million. But what is £27 million in worldwide terms nowadays? To quantify the problem, perhaps I may tell your Lordships that this season Spain is spending £4 million in this country alone. Australia is spending some £2.5 million. Jersey is spending £2 million trying to lure us there. Even Cyprus is spending nearly £1 million. Looked at in those terms I fear that the BTA's marketing resources are underfunded.
§ Important though our overseas visitors are to us, no tourist product can survive on overseas visitors alone. One has to have a strong domestic industry. Although all the reviews to which I have referred reaffirmed to a greater or lesser extent the need for government support for tourism, the more detailed conclusions have not been consistent. The 1983 review of the BTA and the ETB resulted in changes to the boards' structure, with the appointment of a common chairman and the creation of some joint departments serving both boards. Funding for the Section 4 scheme of grant assistance for tourism investment through the ETB was increased. In the next review of the BTA and ETB in 1988–89 the Section 4 scheme was discontinued in England (although it continues to this day in Scotland and Wales) and the government priority for the ETB became to devolve its functions and resources to the regional tourist boards. Approximately half of the ETB's operational expenditure—some £7 million per annum—now goes to them. The latest review concluded that the case for supporting domestic tourism in England was no longer strong. The review did not deal with Scotland and Wales. The ETB was asked to concentrate remaining domestic support primarily through the regional tourist boards and increasingly on areas of economic need with tourism potential. I wonder what parts of the country nowadays do not qualify under that definition. The reduction in support for tourism in England was justified on the grounds of the maturity—whatever that might mean—of the tourism industry in England.
§ I must admit to being very puzzled as to why the tourism industry in England is apparently more mature than that in Scotland and Wales. What criteria 312 were used to come to this conclusion? We are talking, after all, at a time when greater London has the third highest rate of unemployment in Britain. As an aside, perhaps I may ask my noble friend to clarify the position of the London Forum. We are talking at a time when capital values of hotels have fallen throughout England—by up to 65 per cent. in some resorts such as Torbay. We are talking at a time when private sector investment is only a third of what it was two years ago and when a record number of hotels are in receivership.
§ At this time of difficulty I find it astounding that the Government are reducing their support for the tourism industry in England. After all, this industry employs some 1.4 million people and has a turnover of £25 billion. It should be remembered also that tourism is a labour-intensive industry and is likely to remain so because there is less scope for substituting people with technology or other forms of capital investment. I am even more bemused by the way the ETB seems to have been singled out for reductions. If domestic activity is valid in Scotland and Wales, why not in England?
§ The regional tourist boards in England do a good job. To continue doing it they need a strong, central ETB, providing co-ordination for national programmes, such as the accommodation inspection scheme and promotional ventures, and expertise in such areas as policy and research. The Government are mistaken if they think that, even with the proposed grant-in-aid reductions and what increasingly seems to be an emasculated ETB, regional boards will continue to function as now. I fear that they will not be able to do so. We are faced with the danger of the tourism structure in England unravelling, not through conscious intent but as a result of this misguided reduction in funding, combined with the concentration of remaining funds on a few geographical areas which, as I have already said, have been somewhat irrationally selected.
§ While I understand the theory behind the Government's wish to target funds on areas of economic need, the practical outcome may not be what they intended. We have been down this road before. When I was at the BTA I remember that it was a political directive that we should promote into the intensively competitive Japanese honeymoon market the twin delights of York and Newcastle. The French national tourist office took a rather brighter look and promoted Paris. Your Lordships can readily guess who lost out in that politically inspired competition.
§ A major shift of funds is bound to leave some regional boards weakened, perhaps totally. One regional tourist board has already gone under. The policy could penalise many of our traditional tourist areas, such as seaside resorts, at a time when they most need support.
§ The ETB's central role is being questioned. But without the ETB, who is there working to increase the market in most general terms for domestic holidays? Regional tourist boards, the resorts and the district councils will be competing against each other for market share in what could well be a static or declining market. To give an example, last year the ETB initiated a successful resorts campaign to which 35 313 resorts subscribed. This year the number subscribing is 41. The campaign would not have got off the ground without the English Tourist Board. But under the Government's current plans, one wonders whether there is any likelihood of that campaign surviving or others like it being developed.
§ We have a balance of payments deficit on tourism. Last year British people spent some £4 billion more on holidays overseas than we received from overseas visitors holidaying over here. Every pound spent on a domestic holiday rather than on an overseas one helps to reduce this deficit. England is a major target for other countries' promotion to the United Kingdom. Last year I gather that foreign tourist office promotion to lure us abroad amounted to more than £100 million. When one adds to that the considerable sums which are spent by the major tour operators to try to persuade us to go abroad, one has to conclude that it is surprising that our Government seem less and less keen to invest in what is, after all, a form of import substitution.
§ I think that all of us here want tourism to continue to develop. In spite of its current difficulties it is one of our most successful industries. We should all strive to build on this success. To me that means continuing to support the tourist boards, including the English Tourist Board, and through it the regional boards, lest the English Tourist Board becomes seriously run down. One can almost envisage budget cuts reaching the stage where one has almost abolished the English Tourist Board without having to go through the necessary primary legislation.
§ I very much hope that the appointment of a new chairman for the British Tourist Authority and the English Tourist Board will be taken by the Government as an opportunity to affirm their support for the board structure and the valuable work done by the boards.
§ I look forward to hearing the thoughts of other noble Lords. I thank very sincerely my noble friend the Minister for being here, obviously at some personal sacrifice, to reply to the debate. If I had one regret it would be that we really need four Ministers to answer from the Government Front Bench tonight. We need a Minister from the Department of National Heritage; we need a Scottish Office Minister; we need a Welsh Office Minister; and of course we need a Northern Ireland Minister to answer for the Northern Ireland Tourist Board should any noble Lord raise its problems. Perhaps fragmentation of policy, as reflected in that division of ministerial responsibility, and of effort is the real problem facing the statutory tourist boards.
§ 8.59 p.m.
§ Lord Pitt of Hampstead
My Lords, I am sure that we are all grateful to the noble Lord for asking this Question and for giving us the opportunity of looking at the tourist industry, particularly at the statutory tourist boards. I must declare an interest in that I am vice-president of the London Tourist Board. But I do not want your Lordships to take it that what I say is the view of the hoard. Noble Lords know me well enough.
314 As the noble Lord illustrated, there is no doubt that the tourist industry plays a significant part in the economic life of Britain. He told us that it employs many people and that it is worth many millions of pounds. So there is no doubt that the industry is important; a fact that any government must recognise and respond to. The way in which any industry is run and organised is also important for its own well-being and for the maintenance of its contribution to the economy. That is particularly true of the tourist industry because the word "tourism" covers a myriad of disparate activities and businesses ranging from Mrs. Brown's bed and breakfast establishment in Blackpool to vast organisations like British Airways. They are all part of tourism.
Tourism is the sum of those constituent parts and because of its fragmentation it needs a structure; an organisation of its own to add up those parts and complete the sum; in other words, to weld together those fragments into a promotable totality. That is essential and that is where the boards come in. The statutory tourist boards perform that function, but the very diversity of Britain's tourism product—one of its greatest strengths as a crowd puller —means that the British Tourist Authority and the English Tourist Board cannot do that alone. No central organisation could have the rapport and working relationship with the Mrs. Browns of this country at the same time as providing an overview and coherent goals for the industry as a whole. That is where regional boards come in and that is why throughout England they are so important, and none more so than the tourist board for London.
Noble Lords will probably consider me biased, but as those noble Lords who were here almost two years ago when we debated tourism in London will remember, I speak not simply because of my love of London nor because of my association with the London Tourist Board, but because of hard economic reality which makes the future of the London Tourist Board and London's tourist industry vital for the health of London's economy.
We have heard about the fiscal significance of the industry to the country as a whole, but in London that is magnified. As our capital city, London is the gateway to Britain and 80 per cent. of visitors arrive in this country via London. If the industry in London ails, so it will throughout the country. A healthy tourist industry in London is of vital significance to the capital's economy, for tourism represents between 4 per cent. and 5 per cent. of London's gross domestic product—a greater percentage than in the country as a whole. To put that in financial terms, tourism brought in an estimated £4,740 million to London last year and about 80 per cent. of that was in foreign currency.
But the significance of tourism to London's welfare cannot simply be measured in pounds and pence. That is just part of the balance sheet. There is more. For example, there is the effect that it has on urban regeneration because although we remain one of the richest countries in the world I believe that no one will 315 deny that there are areas of urban deprivation in this country and that London has its fair share of those areas.
Urban decay is not a pretty sight, nor is it conducive to a city holiday; in fact, it is a disincentive. But the impetus from the industry to develop and improve the London product has done much over the years to stimulate renewal and to push for improvements in the infrastructure. Those measures not only benefit the holiday maker but also the all-important business traveller and the residents. They benefit all of them at the same time as they are helping to make London a more attractive proposition for incoming business and investment. So tourism plays a very important part in many respects in making London more attractive.
Again, there is more. Tourism is one of the country's major employers, but it is even larger proportionately in London where about 200,000 residents—that is, 7 per cent. of London's population —work in the industry. Therefore, in 13 per cent. of London's homes there is someone who works in tourism.
The industry is not simply an employer. It also supports and fosters a large number of small businesses—the flip side of fragmentation—such as the bed and breakfast accommodation to which I referred earlier. There are also small restaurants, boat operators, sightseeing tour companies, and so on. Indeed, more than three-quarters of the membership of the London Tourist Board is made up of such businesses.
I am proud of London. There is, after all, a lot to be proud of. I am sure that most Members of your Lordships' House share that pride. London is one of the most highly regarded, frequently visited and best loved cities in the world, attracting an estimated 9.8 million overseas visitors last year. In fact, in London we have perhaps the best known brand name in the world.
We must not rest on our collective laurels and assume that it will always be so. We must work together to ensure that it is. We must do this for the tourists, so that they can continue to come to London, enjoy their time here and receive a high quality product. We must do so also for the 200,000 people who work in the industry, and for the numerous men and women running those small businesses which play such a large part in it. We must do so also for London's economic well-being and for all the other individuals and businesses which make up the industry throughout the rest of Britain.
In London the industry is working hard to promote the capital. Under the auspices of the London Tourist Board it has launched a major industry-wide campaign to promote the city in North America and the domestic market. In addition, LTB will be working with the Government through the newly established London Forum. I hope that the Minister will explain to your Lordships how the Government see the London Forum and the London Tourist Board's place in it.
I hope that the Minister will also explain how the 316 Government intend to ensure that the London Tourist Board has co-funding which is adequate for its task. I say that because in the couple of years that I have been involved I have gained the impression that the Government are not prepared to make the effort that is required to ensure that the London Tourist Board is adequately funded. While I was at County Hall the Greater London Council did give an adequate grant to the London Tourist Board. We took the view that London's businessmen working in the tourist industry were paying rates and that they needed some of that money back if we were to foster the industry. The Government have taken over the business rate. They owe it to the businessmen who are involved in tourism in London to see that the London Tourist Board is adequately funded. So far, they have not done so.
In one of my interviews with the Minister he told me how well South-West England, the East Midlands and other places have done in getting funds. But I had to tell him that I was not talking about any of those areas and that the areas I had in mind included Birmingham, Glasgow and Manchester. Those are the areas comparable to London as, overseas, are Paris and Rome. The nonsense going on over the funding of the London Tourist Board is unacceptable.
I hope that on this occasion the Minister will be able to say something worthwhile about the contribution the Government are prepared to make in support of this country's tourist industry—an industry which provides employment and a great deal of advertisement for this country. Somehow the Government seem to think that it can be ignored or allowed to find its own feet in some way or other. I hope that on this occasion I shall be pleasantly surprised by the Minister's reply.
§ 9.15 p.m.
The Earl of Glasgow
My Lords, I should like to say something about tourism in Scotland, especially as at the moment the Scottish Office is seeking views on how a future local authority structure might best serve the needs of tourism.
I have a family estate on the north coast of Ayrshire which is now a country park and open to the public, so much of my time is taken up with issues of tourism. In particular I try to devise ways of persuading people to pay money to visit my park. But my success or failure depends to a large extent on the unpredictable West Coast climate and also upon the ability of the Scottish Tourist Board, and other bodies, to get visitors to come to Scotland in the first place. Many of us in the tourist business are not convinced that Scotland is being as successful at attracting visitors as the Scottish Tourist Board would have us believe. Only about 10 per cent. of overseas visitors to Britain come to Scotland. For a country with so much to offer, that does not seem especially impressive.
The marketing and development of tourism in Scotland is carried out by many organisations. At present too many government agencies and local authorities are involved directly in it. There are local and regional councils, Scottish Heritage, Historic Scotland, the National Trust for Scotland, Scottish Enterprise, local enterprise companies as well as the 317 BTA, the area tourist boards and, on a national level, the Scottish Tourist Board and Highlands and Islands Enterprise, which divide the country between them. That surely cannot be the most effective way of marketing tourism in Scotland. It also seems an inefficient use of manpower and resources.
The Scottish Tourist Board, which, with the BTA for overseas, is the organisation specifically set up for the purpose, does not seem to have enough resources —many other noble Lords have mentioned this in another context—to market Scotland as forcefully and effectively as it should. I am sure that that is partly because it is also expected to provide financial assistance to hundreds of other worthy tourist enterprises in Scotland.
It would surely make sense to replace the existing STB and some of the other agencies with one powerful umbrella body, adequately resourced, to ensure the necessary development and promotion of tourism in all Scotland. That body would also be responsible for a comprehensive national tourist policy. It has been suggested that that function could be performed by Scottish Enterprise or one of its branches, where the serious money seems to be.
However there would still be a need for area tourist boards, although it is generally agreed that there are now too many of them in Scotland. The real trouble with ATBs at present is that they are interested only in the specific area that lies within their own boundaries. Those are almost inevitably the official district or county boundaries. As I am sure all your Lordships are aware, tourists are not impressed by district boundaries. They do not know when they are passing from Cunninghame, of which they have never heard, into Inverclyde, of which they have also never heard. They know only that their area tourist board guide comes to an end, and they seem to have fallen off the map.
When the new area tourist boards are set up, not only must there be fewer of them; they must be free from district or county boundaries. They should all be based on a natural tourist area or perhaps a special focal point such as a city that already has, or can be made to have, a marketable tourist identity; for instance, the Western Highlands, the Cairngorms, the eastern golf courses of East Lothian and Fife, or, more obviously, cities such as Edinburgh or Inverness. Each tourist area should radiate out and extend its sphere of influence as far as is useful to the visitor, bleeding, if necessary, into the centres of other tourist areas. For example, a Glasgow tourist board would need to promote attractions in Edinburgh, which is less than an hour away, and an Edinburgh tourist board should do the same for Glasgow. I have a recent Edinburgh brochure which does not seem to be aware at all of Glasgow's existence.
An example of an eminently marketable tourist area that has so far been barely exploited because of local authority and government agency barriers is the Firth of Clyde, which is just on my doorstep. The Firth of Clyde is a large expanse of sea surrounded on three sides by the Scottish mainland. It contains many fascinating islands including Cumbrae, Bute and Arran. Within it and around it lies some of the most 318 spectacular scenery in Scotland and its edge is only 30 miles from Glasgow. It has probably the best sailing waters in Britain, some say even in Europe, and is ideal for cruising and every kind of water sport. Because of the gulf stream, exotic plants and palm trees can be grown, allowing the creation of famous gardens like the one at Brodick on Arran. With the gulf stream in summer come dolphins, basking sharks and other forms of sea life which are not found in the rest of Scotland. On many of the islands and all around the coastline are traditional seaside resorts like Largs and Rothesay, Dunoon and Millport, all of which, until recently, have been allowed to subside into what one might call a tourist decline.
The reason that this uniquely marketable area has been mostly ignored is that it falls within the boundaries of three different regional councils and about seven district councils. Worse still, it is split in the middle by the line separating the Scottish Tourist Board's sphere of influence from that of Highlands and Islands Enterprise. Under the present administrative system, the Firth of Clyde does not stand a chance.
This is one example of a part of Scotland which, when the changes come, should be given the opportunity to become one of the new area tourist boards with the power to ignore whatever the new local authority boundaries may be. It should develop its own tourist potential and promote its own area and any other neighbouring areas—for example, Glasgow and Loch Lomond—which may be helpful to the visitor.
I urge that future area tourist boards should be created primarily because they have a natural tourist identity to market. Their objective, apart from promoting their own tourist attractions, should be to make life attractive and easy for the visitor, wherever he wants to go. The boards should not be set up for the administrative convenience of the local authorities involved. It is the visitor whom we must please first and not the hotel owner or the local authority officer.
I am proposing quite a radical change in the management of tourism in Scotland but I know that my views are far from unique. Some of these ideas are already being discussed. I can only ask that, when the Government or the Scottish Office restructure local government, they will also consider restructuring tourism along those lines.
§ 9.22 p.m.
§ Baroness Young
My Lords, I begin by thanking my noble friend Lord Mountevans for introducing this Unstarred Question. I believe that the debate is both timely and important.
I take part in the debate for two reasons. The first is that I live in Oxford, which is a city that I suspect attracts millions of visitors every year. As a result of that, tourism makes a major contribution to its prosperity and affects the whole of the local economy. My second reason for taking part in the debate is that I know people in the tourist industry who are extremely anxious about the fact that the Government 319 are not as committed to a thriving tourist industry as they believe they should be. When my noble friend replies, I hope that he will answer that point.
I begin by saying why I think the tourist industry is so important for our country as a whole. The most important issue facing the country today is unemployment. I believe, as do many people, that it is difficult to see an end to the recession until the unemployment figures start to come down. Tourism is a growth industry, even in these times. It now employs 1.5 million people, some 25 per cent. more than in 1981. Those people are employed in real jobs catering for the real needs, interests and entertainment of people generally.
Even in 1991, a year hit by the effects of the Gulf War, there were some 16.8 million overseas visitors to this country. In 1990, 58.4 million people took holidays at home that lasted one or more nights. I believe that those figures are increasing. That is a success story. It is true, of course, that many of the jobs created are part-time jobs but they are valuable to certain groups of people, for example students who want to work during the summer vacation when most of the tourists come.
The second reason why I think the tourist industry is so important is that it is now the fourth highest earner of invisible exports. Overseas visitors spent some £7.2 billion in the United Kingdom last year and the numbers of visitors are set to increase, inevitably with the opening of the Channel Tunnel and presently with the devalued pound making the United Kingdom a much more attractive place to visit. Indeed I have read that if theatre and restaurant earnings were added to the figures, tourism would be the highest invisible exports earner. Those figures have to be set against all the advertising and offers—these were clearly spelt out by my noble friend Lord Mountevans —that come from other countries that wish to persuade British people to go abroad for their holidays. I am not in any way against that, but we need to recognise what our own tourist industry does for the balance of payments.
Thirdly, the tourist industry accounted for over 4 per cent. of the United Kingdom's GDP in 1989. It would be helpful to know, if the Minister can tell us, what it accounts for now. The tourist industry is therefore a success and it seems to me that in public life, as elsewhere, one should build on success and make sure that it continues and increases.
I turn now to what my noble friend Lord Mountevans has identified, rightly, as one of the present problems; namely, the funding of the tourist industry, quite particularly the funding of the English Tourist Board. The fact is that the Government have announced a substantial reduction in the funding of the English Tourist Board from £15.3 million in 1992–93 to £9 million in 1995–96. If, as I understand it, the funding of the regional boards is maintained at the present level—that is, around £6 million to £7 million a year—that leaves some £2 million to £3 million for the English Tourist Board. That is less than one-tenth of the funding for the Welsh and the Scottish Tourist Boards. At the same time the projected budget 320 increase in the Department of National Heritage is some 8 per cent. I am afraid I find it difficult to escape the conclusion that the Government are not as fully committed to supporting the tourist industry as they might be.
I sometimes think this arises because as a country we are ambivalent about the tourist industry. Of course we like the jobs it creates and the wealth it brings, but, oh dear, what complaints there are. There are complaints about all the people coming in, the crowds, the extra buses travelling round London and all the extra people visiting places that we like to have to ourselves. Sometimes tourism is regarded as a kind of froth industry because it is not part of our industrial base. However, the fact is that tourists will continue to visit this country. I believe that tourism is now the largest industry in the world. It must surely be in our own interest, let alone the interest of visitors, either from this country or from other countries to make tourists welcome.
Where do the Government's priorities lie? I hope very much that they will look seriously at the level of expenditure within the total budget of the Department of National Heritage. If it is too late to do anything this year—that may well be the case—I sincerely hope that my noble friend Lord Astor will impress upon his right honourable friend the Secretary of State the need to look seriously at the funding for next year. I ask that because I now wish to consider in detail the funding for the English Tourist Board.
No explanation has been given as to what the Government mean by the statement that the tourism industry in England has "matured". I am not sure that I fully understand the use of the verb in that context. Nor do I believe that the Scots or Welsh would like to be described as immature, as the opposite seems to be implied. However, I am not here to debate such points because this is far too serious a subject.
It must not be forgotten that the tourism industry is not like an enormous multinational company. On the contrary, as the noble Lord, Lord Pitt, and the noble Earl, Lord Glasgow, have pointed out, thousands of small companies and the self-employed make up the tourist industry. The regional boards can help to co-ordinate the marketing and information services and stimulate investment in the industry through a mixture of private sector, local authority and central funding, but many tasks remain to be done by the English Tourist Board.
It would be helpful if my noble friend could say how he believes that the following needs which are currently catered for by the English Tourist Board will be met—for above all it is important that the industry should be always looking to the future. Some of the key roles of the English Tourist Board are as follows. First, leadership: it is important that the English Tourist Board continues to represent tourism on behalf of the region and the industry at a national level. That includes representations on policy matters of all kinds, including government and European Community legislation affecting the industry. Secondly, strategic policy: the English Tourist Board provides the strategic policy framework which ensures that the regions are operating to common goals. 321 Thirdly, research: the English Tourist Board research role is fundamental to the efficient planning and marketing of the industry at a national and regional or sub-regional level. It also provides a pool of expertise on which the regions can draw. Fourthly, coordination: there is a danger of the 11 regional boards duplicating their efforts. Fifthly, but by no means least, information collection: the board provides the framework and systems necessary for controlling and operating information collecting and dissemination on a national basis. That includes the setting of standards for accommodation grading schemes, tourist information centres etc. Those are very important issues. It would be helpful if this evening we could be given an answer to them.
To conclude, I hope very much that my noble friend will stress to his right honourable friend the Secretary of State the importance of the tourist industry. I believe that its importance to the country as a whole cannot be overestimated, particularly in the difficult economic times in which we find ourselves. It has been a success story. I believe that we should build on that success. I hope that he will be able to indicate that the Government have a whole-hearted commitment to making it work in all parts of the United Kingdom.
§ 9.33 p.m.
§ Lord Walpole
My Lords, I too should like to thank the noble Lord, Lord Mountevans, for putting down this Question this evening. I come from what might be regarded as the other end of the industry—the same sector as the noble Earl, Lord Glasgow, although I am based in Norfolk and he is near the gulf stream—a much more pleasant place to be at the moment. Therefore, I should declare an interest.
I have run what is called an "attraction" since 1969 and two since 1989. I have been a member of the East Anglian Tourist Board since its inception. Prior to reorganisation I represented Norfolk County Council on the board and since 1980 I have been an associate member. I was chairman from 1982 to 1988 and I am still a vice-president. I think that I have declared all the interests I have in the board.
While I was chairman I survived two reviews, two departments of state, three—or was it four?—Ministers and two different chairmen. I find myself here tonight seeking information from another Minister from another department, while another review is taking place and another chairman is about to leave. I am confused. I hope that the noble Viscount will be able to enlighten me before the evening is complete. I have come to the conclusion that tourism in England is the pass-the-parcel portfolio, but I am not clear whether anyone wants to be holding the parcel when the music stops.
I too read the Chancellor's Autumn Statement and, for old time's sake, I checked to see what was happening to the English Tourist Board. The figures have been cited several times already. Furthermore, I understand that agreement has been reached between the chairman of the 11 regional boards and the chairman of the board of ETB that, in line with the wishes of the Secretary of State, support for the 322 regional boards will remain constant until 1995–96. While the regions welcome that because it produces some stability for them, they are extremely worried about the future of ETB with the resulting lack of funding—on paper anyway.
I am sure that I speak for all the regions when I say that they need the English Tourist Board. They need the board to co-ordinate activity, to advise the Government, regions and industry on policy issues, and to provide leadership. That is important.
I ask a simple question. On the figures that we have, do the Government intend that the English Tourist Board shall cease to exist? The Secretary of State has stated that support to the regions should,be targeted much more closely than at present on areas where the need is greatest and tourism could be an instrument of economic regeneration".That means more money going to the regions, but which ones? The department is pressing the English Tourist Board to devise a new system to implement the policy. Assumptions are being made that such a scheme would give priority to existing assisted areas. Regions believe that a new scheme would be impracticable within the constraints of limited funds available. Furthermore, they believe that any appropriate activity should be based on tourism potential, rather than on assessment of industrial decline.
In my region, unemployment at Great Yarmouth —and, my goodness, does not its Member of Parliament refer to it on many occasions?—is 15 per cent. That is similar to Barnsley or Doncaster. Both the latter have long had assisted area status. Clacton has an unemployment rate of 20 per cent. That is higher than Hartlepool at 18.6 per cent. or Liverpool at 16.8 per cent. In East Anglia tourism can help economic regeneration in Yarmouth and Clacton. It can also help to produce employment in rural areas.
The prime objective of the regional boards, and the East Anglian board in particular, is,to encourage the improvement of the general longterm economic performance of the tourist industry in the region".The small sums available should be used to support what we already do well, but perhaps could do better: to develop and promote tourism in the resorts and the countryside and to increase the overseas visitor spend in our heritage towns. That is much more likely to create employment than switching money to parts of the country whose intrinsic appeal to the domestic or overseas visitor is doubtful. Any new scheme would inevitably absorb a disproportionate amount in overheads.
I must ask the Minister whether he would agree that, as no additional funds are available to the English Tourist Board or regions, economic regeneration through tourism is more likely to be achieved by building on the good work currently undertaken by the regional boards rather than by diverting money elsewhere, which could prejudice existing operations.
Next, after the most excellent debate in the House on 21st January, may I urge the Minister to put on his green hat? With his right honourable friend the Minister of Agriculture urging farmers to diversify, and with rural deprivation, I suggest, almost as bad as urban deprivation, does he understand that tourism in 323 the countryside is important but requires special extra skills of management, research and consultation? Central guidance in this is essential, otherwise the countryside will be littered with four by four race tracks, clay pigeon shooting, golf courses and war games. All our cliffs and other beauty spots could be bestrewn with caravans and tents, while the roads to them are improved and widened to the detriment of wildlife, thus ruining the countryside and the very peace and quiet that the visitor had hoped to find.
In conclusion, may I suggest to the Minister two little thoughts? The first is not an easy concept but I always feel that the yardstick by which tourism should be judged is not quality, nor value for money nor even friendliness. All those matter, but what is important is what people visit and whether it is up to expectation. Things that exceed expectation are fabulous. Those that do not fail.
Perhaps my second thought is a little simpler. Tourism is about enjoyment, so let us enjoy this debate. Let all the visitors to our countries enjoy themselves. But could the Minister and the Secretary of State at least look as though they are enjoying themselves when discussing tourism? Thank you for smiling, Minister!
§ 9.42 p.m.
§ Lord Montagu of Beaulieu
My Lords, first I must declare my interest as the President of the Southern Tourist Board, a post I have held since its inception. Due to the lateness of the hour, I intend to restrict my remarks to the regional tourist boards. At least the latest tourism review recognises that there has been great progress over the past 20 years in tourist infrastructure, facilities and marketing. But I think there can be no doubt that that was due in no small part to the splendid work of the English Tourist Board, as well as the regional tourist boards. They are at the sharp end of tourism, keeping the wheels of the British tourist industry well oiled.
It now appears that the Government believe that they can scale down the level of central support for the English Tourist Board and that regional tourist boards should be increasingly independent and self-financing. That may well be so, but I think I can speak on behalf of all regional tourist boards when I say that we are all in favour of regionalisation and devolved powers. Indeed, I go further and say that we are also in favour of privatisation of any services, if they are cost-effective and efficiently run.
However, the fundamental truth is that the regional boards are naturally competitive and will never be able to function properly together in carrying out an effective national tourist policy without a strong catalyst at the centre; that is, an English Tourist Board which can so much more efficiently carry out research, information collection, hotel classification and also very importantly, as mentioned by my noble friend Lady Young, the scrutiny of European Community legislation. Those are all tasks on which it would be pointless duplication of resources for the regional tourist boards to carry out independently.
324 I am sure that I shall not be offending my fellow regional tourist boards when I say that from time to time the English Tourist Board plays an important role in settling disputes between regional boards, even knocking heads together when required.
The regional tourist boards view with great apprehension the planned reduction over the next few years of the grant to the English Tourist Board resulting in the reported potential redundancies of 70 key staff. I fear that once the structure of the tourist boards and their relationship with the centre has been altered it will never be possible fully to repair the damage. Not only do we need strong and active regional boards, we also need a well-funded, efficient organisation at the centre. I am not alone in hearing rumours that the real intention of the Government is to starve the English Tourist Board into extinction. Perhaps my noble friend will dispel those rumours. After all, England gets 80 per cent. of all tourists in this country, and if Scotland and Wales need a board so does England.
Another matter that affects the regional tourist boards, touched upon by the noble Lord, Lord Walpole, is what I believe to be the misguided idea of using tourism as an instrument of regional economic development and planning. I submit that everywhere in Britain that has tourist potential has or is being developed or perhaps does not want to be developed. Looking at the empty hotel rooms and some declining seaside resorts one can hardly claim that new tourist areas are either necessary or viable. One cannot force people to go where they do not want to go. That has been tried unsuccessfully before, and will fail again. Unattractive areas cannot be made attractive by government decree. In any case, I believe that the regional tourist boards have quite enough to be getting on with as it is without trying to turn the decaying industrial back streets of Britain into family theme parks. The lack of on-going development and the disappointment that followed the garden festivals should be lesson enough.
I have been involved in tourism for 40 years and during that time I have seen a small amateur weekend industry turn into a multi-billion-pound business making a major contribution to Britain's foreign currency earnings. It now employs 1.5 million people, most of whom work in small businesses which are the backbone of the industry. On a personal note, this spring I shall be welcoming the 20 millionth visitor to Beaulieu since 1952.
The great success of tourism owes much to the work of the statutory boards, particularly the BTA whose work in various countries round the world is second to none. Unfortunately, in recent years there has been government review after government review. That has unsettled everybody and prevented the boards from doing the job they were set up to do—to sell Britain at home and abroad. Let the regional boards get on with the jobs they are doing so well but at all times maintain an authoritative and effective central tourist board to give leadership to the industry. Let us have no more penny-pinching cuts that result in the boards being nothing better than advertising agencies producing glossy leaflets. Those of us who 325 have helped to bring British tourism up to the high standard it enjoys today feel they deserve a sincere expression of appreciation for past efforts and, hopefully, a vote of confidence in their ability to achieve greater things in the future.
§ 9.48 p.m.
§ Lord Redesdale
My Lords, I should also like to thank the noble Lord, Lord Mountevans, for giving us this opportunity to look at the tourist industry. It was a subject on which I was privileged to make my maiden speech not very long ago when the noble Lord, Lord Pitt, asked an Unstarred Question on the tourist industry, focusing mainly on London.
Many of the topics I wanted to cover have already been mentioned. I agree with the noble Lord, Lord Mountevans, in his comparison of Paris, Newcastle and York. He said that he knew which he would opt for. I would also opt to go to Newcastle. It has many delights though none as obvious as Paris.
Answering the debate introduced on 17th July 1991, the Parliamentary Under-Secretary of State at the Department of Employment, stated at col. 262:The Government have certainly played their part in supporting the industry. In 1990–91 we spent some £530 million on tourism and leisure-related activities in Great Britain, and that excludes the cash injected by local government. A major element was, of course, the money we made available to the national tourist boards, and our commitment to them is clear and continuing".The proposed cuts in the budget of the English Tourist Board do not indicate that the Government are showing anything like the clear and continuing commitment to the English tourist industry that the Minister said was the Government's policy a mere year and a half ago. The proposed £5 million cut in the grant to the tourist board will benefit not the tourist industry but the Treasury. If the Government believe that the English Tourist Board has almost no role to play in the future of tourism in this country, as the small grant it is to be allocated would suggest, it would be a gesture of support for the industry as a whole if the money that was to be removed from that tourist board's budget could be transferred to the grants of the regional boards.
Tourism, it has been pointed out, is worth £24 billion to the economy of the United Kingdom. If that figure is taken to be the level of spending for 1993–94, the projected grant for that year of £85.6 million represents less than 0.4 per cent. of the money earned by the country through tourism. When even the most frugal of companies is prepared to spend at a minimum 5 per cent. of earnings on marketing, it is perhaps surprising that the Government's commitment to promoting tourism—one of the country's largest industries and certainly one of the most profitable—is slightly derisory.
The Minister will probably answer that it is up to the private sector to fund marketing. But, as will be shown, perhaps the Government should be relied upon more heavily. Tourism is a business that by its nature is extremely competitive. The English Tourist Board was set up under the Development of Tourism Act 1969 to give greater cohesion to the industry and to help rationalise and promote its development. That 326 aim seems to have been lost by the present Government, who appear to have opted for making cuts that will benefit the Treasury in the short term while failing to realise the potential and long-term monetary gain that could come to the country.
Indeed, considering that 1.4 million people are employed in tourism at present and that the figure may rise, it is possible that false economy in marketing England as a tourist destination may inflate the social security budget in the not-too-distant future. Tourism is a vulnerable industry. The Gulf War meant that fewer long-haul visitors came to this country, and tourism has also been hit by the worldwide recession. If this country is not marketed abroad more aggressively, it is obvious that visitors who would have come here will instead go to those countries which spend more on advertising.
The British Tourist Authority, which has the task of marketing Britain overseas, has been given a very small increase in its budget—a mere £1 million. This, considering that devaluation has cut its spending power by 20 per cent., seems not appropriate. Given that devaluation has taken its toll, I wonder whether the Minister will increase the budget.
The role of the ETB is to attract tourists and to make English people see Britain as a tourist destination. All too often, British people do not even consider Britain as a place to go on holiday. Perhaps they go for a short break, or perhaps for a family outing; but it is very rare that one hears of people from the South going north for a holiday, or even people from the North coming south for a holiday. I feel that with the opening of the Channel Tunnel, more people in the South will go to France for their holidays. As has been pointed out, that will be quite a drain on the country's economy.
I would like to bring forward one point. One of the ETB's main roles is the national classification scheme. If that is taken away, it will be a major blow to the tourist industry in many regional areas.
An area with which that I am associated—Alnwick, in Northumberland—relies heavily on the classification that the ETB gives; namely, the crown scheme for serviced accommodation and the key system for self-catering. Those schemes have improved the quality of accommodation in the area. It is only with the granting of a title such as "recommended" or "highly recommended" or "de luxe" that a self-catering establishment can charge higher rates. Quality is one of the major reasons why people come back to the area. It is only through quality that people will come back.
I doubt very much whether the Minister will say that any more money is available for the English Tourist Board. I believe it is the intention of the Government that private enterprise should pay for itself. However, in an industry so fragmented, it seems ridiculous to expect people such as self-caterers in Alnwick to be able to market themselves effectively.
§ 9.57 p.m.
§ Lord Wade of Chorlton
My Lords, I join other noble Lords in thanking my noble friend Lord Mountevans for proposing the debate. I strongly 327 support those who have drawn attention to the economic importance of tourism. What concerns me and has brought me to speak in the debate is the number of people in the tourist industry, both from the tourist boards themselves and those who are running tourist businesses, who now show conviction that the Government are no longer giving the importance to tourism that they used to.
Let us consider the entrepreneurial aspect of tourism. My noble friend Lord Montagu pointed out that tourism is a business that needs to attract people; it is a business that needs to be aware of the customer and a business that ebbs and flows as the demands of the customer change. So it is a business made up—as the noble Lord, Lord Pitt, pointed out—of a whole diversity of people with ideas, with enthusiasm and with the ability to create tremendous economic strength for the nation. If they begin to think, as they quite clearly do now, that the Government do not believe that their industry is as important as it was, their enthusiasm will tend to wane. That is clearly a view held by many. I believe that noble Lords have emphasised that point.
Another point of concern is that, as a person very close to the rural economy, I am anxious to see as many economic opportunities as possible allowed in the rural community to take the place of the traditional agriculture which has previously been the base of its economy. I believe that tourism can play a much more important part than possibly it is being encouraged to do at the moment.
The noble Lord, Lord Walpole, painted a rather bleak picture of the countryside being covered by all kinds of tourist activities, but that is not what happens in reality. We are talking about very marginal impacts on what we see. It is nonsense to put forward a scary picture to the effect that, when you encourage economic development in the rural community, you will be inundated with roads and businesses sprouting up. That is not what promoting tourism is about. It is about encouraging the involvement in those extra businesses which allow economic growth of those who are on the edges of towns, who are already involved in some kind of tourist activity and who are already close to an area to which people can be attracted. There is a great deal that Government can do to give encouragement and support in that area. I am aware of a major, British-owned leisure company which now finds that investment is going to other parts of Europe, including Germany and France. It wishes to develop, but it finds that delays regarding planning applications, controls and regulations make investors go elsewhere. That is not in our interests.
I agree with all noble Lords who say that it is the Government's role to ensure that tourist boards have the financial support that they need, but that it is not just a question of finance. We must have a clear policy from the Government and the Department of National Heritage in order to see the economic benefits from tourism. We must help it to grow and must encourage entrepreneurs so that they do not feel that, every time they want to do something, for every one person who helps them there are three hindering 328 them. That is the picture generated within our tourism industry and the Government can play a great leadership role in changing people's views.
Like my noble friend Lady Young, I urge my noble friend the Minister to ask the Secretary of State to look again closely at the role that can be played by the department in encouraging tourism. Tourism is an industry and the department's other responsibilities are less industrially based. I share the strong feeling of many people that there is a tendency within the department to move resources to those areas which are not industry based and which provide what one might call the luxuries in life, and away from the more important industrial and economic aspects of tourism. If we are to achieve all the things that people ask for, the department and the Government have a prime responsibility to put our taxpayers' money where it will do the most good in the short term. The encouragement of tourism and the creation of more wealth in both our rural and urban areas is of prime importance.
§ 10.3 p.m.
§ Lord Cochrane of Cults
My Lords, I am grateful to my noble friend Lord Mountevans for introducing this subject and to my noble kinsman for speaking so wisely from the Benches opposite. I must declare an interest in that I am chairman of a privately run caravan park, an industry that is often considered to be the bane of the countryside and of the planners. We have been in business for rather less time than my noble friend Lord Montagu of Beaulieu and have not grown at such an astounding rate. I congratulate him on that. However, we have pleased our bankers for the last 22 years and have made a profit every year.
Having been chairman of this company for some time, one of the most difficult tasks that I have every year, apart from dealing with government departments, is to make the speech at the annual Christmas lunch for the staff, because the message is basically the same every year. As no one has mentioned this point, I shall risk boring your Lordships with it. When you are in the holiday business, you are selling packages of happiness. It is a very large investment. People buy a weekend, a week or even a fortnight if they are rather more fortunate, of happiness and enjoyment for themselves and their families.
The important thing for those engaged in the industry is to recognise that the people who come to us for their holidays expect to be satisfied, pleased, looked after, welcomed and made to feel secure. If they do not feel that, there is a considerable chance that they will not come again. If one does that, even if it rains every day, one is rather better placed. That is very important. Of course one needs money to provide the facilities. Ours are relatively elementary. No, they are good but not luxurious. More than anything, it requires the devotion of one's staff—and leadership by one's senior employees to enthuse the staff on wet days, dry days, cold days and windy days—to look after our basic raw material, the customers who come.
As I am speaking last before the gap, virtually every line that I was going to play has been stolen, so I shall divert the attention of the House for a moment by 329 congratulating the noble Baroness, Lady Hamwee, on her fortitude in sitting through three debates and, what is more, speaking in all of them.
With regard to Scotland, where I live, it seems to me that the present proposal to review the work of the Scottish Tourist Board and the official organisation of tourism in Scotland is singularly ill-timed. A review is going on in Scotland of local authority boundaries and whether authorities should all be unitary, or conceivably some of them not. The former is much more likely. Until the boundaries of the local authorities are defined and settled there is no possibility of setting up a realistic pattern of regional tourist boards.
Inevitably some heed has to be taken by those defining regional tourist board boundaries of local authority areas, but these should not be compulsory boundaries. In every regional tourist board area one must have a major selling attraction and a large enough area to be recognisable. I do not know of a particular example in Scotland, but if one saw a brochure labelled "South Hams", would one actually want to go there? I believe that it is somewhere near Salcombe. Indeed when I saw for the first time a bus labelled "Alder Valley", it took me quite a long time —I still do not know whether I am right—to realise that it came from Aldershot. It is perhaps true to say that Alder Valley sounds rather better than being "shot". That is the point. The regional tourist boards must be of a large enough area and must have something within them worth selling.
Next door to the area where I live is Kirkcaldy. It is very difficult to sell much in Kirkcaldy. Indeed, the description—I may well be pilloried when I get home —"First prize, a week in Kirkcaldy; second prize, a fortnight" is probably still valid, as it was at one time, until it was renovated, for Wigan, although I have never been there. That is by the way.
The really vital duties of regional tourist boards cannot be carried out without central direction. The Scottish Tourist Board is financed directly under the general block grant of the Scottish Office; and long may that continue. I am sure it will. This gives a much more local view of what is necessary and needed. Unfortunately, for historic reasons the government bodies controlling and directing tourism in Scotland are immensely fragmented; some rightly, some wrongly.
At the top of the tree, holding all the money, except that which those like myself in the industry are prepared to chip in, is the Scottish Office. Then we have the Scottish Tourist Board. But paralleling that, beyond the Great Glen, we have Highlands and Islands Enterprise. It used to be known as the Highlands and Islands Development Board. Under that are the local boards. At the side somewhere—I am not quite sure where—we have Scottish Enterprise, which is reputed to have large amounts of money and a great deal of clout. Then standing still further to the side we have the British Tourist Authority.
That is a very undesirable fragmentation. That has been recognised in the Scottish Tourist Board's review in which it has put forward a claim to take over all of their functions with the exception of the Scottish 330 Office. Unfortunately, in that it is wrong. The Highlands and Islands Board is working in an area of great economic poverty and deprivation, where tourism and its development is one of the very few avenues by which the country and its inhabitants may be bettered. As I have said before in this House, the countryside, like it or not, runs on money.
The grant and development projects in the Highlands and Islands area, which is really the other side of Loch Ness, are quite different and must be treated differently. I do not sympathise with the claim of the Scottish Tourist Board to take over that area; otherwise I have considerable sympathy with what it proposes. It is unfortunate that I have not yet received its detailed plan. I have only seen a leak of it in a Scottish paper and I hope that it is true.
For a tourist board there are three vital duties which have been touched on. I shall go through them as quickly as I may. First, there is the control of standards. That has got to be done at national level, and I mean at a national level. There must also be co-operation between the three national tourist boards for Wales, Scotland and England; otherwise the regional tourist boards will fragment the arrangements.
I have received a letter from the National Caravan Council which says that it cannot now readily get an agreement from 11 regional tourist boards, whereas formally it had to negotiate with only one. I have a letter from the British Home and Holiday Parks Association also saying that it is its policy to negotiate only at national level. Their resources of time, manpower and patience even do not allow any other conclusion.
The second factor which is vital to the Scottish Tourist Board is that it administers grants. I have touched on that already in relation to both Highlands and Islands Enterprise and the Scottish Tourist Board. These have not been available in England for some time, but in Scotland they have been. They are welcomed and valuable. I have to admit to having had some myself, although in the past the procedure has been extremely long-winded and the accountants' fees for producing cash flow forecasts, profit analyses and all the rest of the stuff they charge for cost a great deal more than one would like, and it was probably meaningless at the end of the day.
The third vital function of a national tourist board, as has been remarked, is to lead the area tourist boards in the direction in which it sees tourism, as a considered policy, should go. One of the snags of the present area tourist boards is that they tend to be local authority dominated. To put the matter briefly, that leads often to a very nasty attack of all the things which are said to be wrong with British Rail. They feel themselves impenetrable to criticism and all that kind of thing. I do not feel that at all about British Rail, but merely remark on it because that has been said.
As far as Scotland is concerned the important thing is that we should have distinct marketing. We are a separate nation, but we are also part of the United Kingdom. For that reason, I hope that the Scottish Tourist Board and Highlands and Islands Enterprise will co-operate more closely in what they are doing in 331 advertising and publicity than they have done in the past. It is to be hoped that the changes at the top of the British Tourist Authority will also make that liaison easier.
I realise, as my noble friend Lord Mountevans said, that there is great fragmentation in control. Apart from my noble friend Lord Astor on the Front Bench there should be another row of Ministers to answer all the questions which us tiresome Scots were about to raise. But that is not the way that this House works, in this case unfortunately. I am grateful to my noble friend for introducing this subject and I look forward with interest to the Minister's reply.
§ 10.14 p.m.
§ Baroness Hamwee
My Lords, I put my name down to speak to this Unstarred Question because I wanted to ask one simple question of the Minister, but, given the position in which I find myself on the list and in order to do justice to the importance of the topic raised by the noble Lord, Lord Mountevans, perhaps I may say just a word or two more than one short question.
This is the third debate today in which the Government have been warned against making false economies. That was mentioned by my noble friend Lord Redesdale and by many others of your Lordships. Tourism requires investment and will pay a very great return on it. I was struck by the expression used by the noble Baroness, Lady Young, that the industry should be allowed to build on its own success.
Although the importance of the industry has been well demonstrated this evening by your Lordships, British tourism may not remain a successful industry. It needs to hold its own in the international market. It needs to develop strategies for that and to look to its different markets. I understand that the main overseas market for London is largely American, with central London hotels depending greatly on the patronage of the Americans, to the extent of 40 per cent. in the case of the Ritz. We are aware, of course, of how sensitive Americans are to what happens in all sorts of ways in this country. The fortunes of the market depend on exchange rates. The number of visitors can ebb and flow. The world is a changing place.
In looking at the importance of London and its competitiveness on the world stage, I have been aware during the past few years of two attributes—two policy areas—which are important for tourism as well as for everything else. One of those is the quality of life. The noble Lord, Lord Walpole, asked the Minister to put on a "green hat". That would be just the thing to complete his outfit this evening. I am sure that the Minister is aware that noise and pollution are not only threats to the quality of life of those of us who live and work in London but may also be deterrents to visitors to London.
The quality of our transport is also important. It can be a great deterrent to visitors who may not be 332 confident that they will get the service they expect. I spoke a couple of months ago at a conference in Paris when the Ile de France region was attempting to assess how Paris could keep its place on the world stage. Transport was very much in people's minds although the campaign that the region had been running was called "Qui sourit?"—and taxi drivers were being urged to smile. This country's policy development is a little more advanced, but our transport is a major issue. The promoters of our major tourist attractions are in a very good position to promote the use of public transport and I believe that they have a responsibility to do that. We are all aware of the cultural change that is required in relation to transport. I hope that the Government will encourage those major attractions to lead the way.
The noble Lord, Lord Pitt of Hampstead, spoke eloquently about the place of tourism in urban regeneration. I endorse his remarks.
London is important, so the arrangements for London are important. Without making any particular comment on the current proposals, I do not agree with the noble Lord, Lord Mountevans, who described reorganisation as leading to "bleeding". Sometimes reorganisation and review can staunch the flow of blood and may be a good thing.
A review is taking place upon which I should be glad to have the Minister's comments this evening. It relates to the London Forum, which was a commitment in the Conservative election manifesto. I was not entirely clear then what was intended, and I am not a great deal clearer now. I bear the private sector no ill will—on the contrary—but I question the announcement about the relationship of the London Forum to the London Tourist Board. The announcement was made by the Secretary of State for the Environment at the launch of the London First organisation. It was not expected by the London Tourist Board, which had not known that there was to be an announcement about its future role and the relationship of the two bodies.
The private sector's involvement and expertise are important. I welcome that. However I wonder whether we can run London using highly skilled people who can give only a limited amount of time and meet only infrequently. They have a great deal to contribute, and they will contribute it, but they are not given the forum—I hope that your Lordships will forgive the pun—to contribute what they can and to do what is required.
My second point is a related one. The Government stand off too much from the boroughs, especially in London, in relation to tourism. We do not yet know the membership of the London Forum. I shall be glad if the Minister will comment upon what I have heard: that there is to be no local authority involvement. If that is so, it may be because of the continued fear—I should say that it is a misplaced fear—that it would become a campaigning body. I think that the ghost of the GLC has now been laid to rest!
Local authorities have a part to play. My noble friend Lord Glasgow questioned the boundaries of the various tourist authorities and suggested that they 333 were set for the convenience of local authorities. I am sorry if that is the impression that he has; most local authorities prefer to see themselves as serving rather 334 than existing to be served. Local authorities can and should be involved. They are not everything, but neither are they nothing.
§ 10.22 p.m.
§ Lord Graham of Edmonton
My Lords, it is a pleasure and a privilege for me to take part in the debate. I begin of course, as most other speakers have, by warmly congratulating the noble Lord, Lord Mountevans, for giving us the timely opportunity to discuss this matter. He has brought to bear his perspective and experience of the subject. He has given us all—I hope that that includes the Minister and his colleagues—the chance to reflect.
The noble Baroness, Lady Hamwee, has shown her stamina as well as her wide experience not merely by sitting through three debates—an experience I share —but by speaking eloquently three times. She told us that the other two debates, like this one, were used by the participants to warn the Government of the results of not understanding fully the consequences of what they believe to be their imperatives in reducing expenditure or changing policy.
I have listened carefully. The word "politics" has not entered into the debate, but this debate, like the other two, is all about politics. The decisions were taken by politicians. There are political imperatives which drive the Government to make their policy. The Minister should not be afraid to say that political decisions have been taken: from the announcements in the Autumn Statement and in many other ways. Politics is all about people.
Noble Lords have declared interests, which I respect. I was not sure how to declare my prime interest until I noticed that I am wearing my Co-op tie. My connection is with the Co-operative movement, which is strongly involved in the tourist industry. As other noble Lords have said, at the end of a long debate there is not much more to be said.
I begin by quoting the words of someone who was certainly one of the blue-eyed boys of the former Prime Minister, the noble Baroness, Lady Thatcher. She appointed him some three years ago and his term of office is coming to an end. Mr. William Davis said —and this is from the Guardian so it must be true:The Government's attitude had made it impossible for me to continue. I have had three years of battling away, but it seems that the Government is making up tourism policy as it goes along".I know how much this Minister respects the words of chairmen of quangos who are appointed by himself and his colleagues. Therefore, he must respect those words. Mr. Davis continued:I have served two different departments, and three different Secretaries of State".We should reflect upon those words. Every noble Lord who has spoken tonight has had a special case to make. I do not say that disrespectfully. I have given to your Lordships the words of the chairman of the British Tourist Authority. Perhaps he is disgruntled and in high dudgeon about something. Perhaps the Minister will tell us whether or not that is so. However, those are the words of that gentleman on his departure. Before he said that, one would have assumed that Mr. William Davis and his colleagues, although working under difficulties, were satisfied that the Government were doing their best.
I am staggered at how this Government, who boast that they want value for money and improved 336 employment and that they want to assist small businesses, preside over the state of the tourist industry and the tourist boards. The Government have much to their credit but I cannot believe that they are proud of the manner in which they have presided over the industry.
What are we talking about? We are talking about an industry which brings £25 billion into the country. As the noble Lord, Lord Redesdale, said, any business which managed to drum up business of that magnitude and yet spend the parsimonious sums in sustaining and improving it that this Government have spent would not survive. The tourist industry is entitled to ask what the Government are playing at. Are they taking for granted that the industry will always survive, that it is resilient and able to keep going?
The Minister must explain to the House the rationale behind cutting down the resources of a successful business; that is, the English Tourist Board and the British Tourist Authority. Reference has been made to the fact that funds for the English Tourist Board have been cut from £13.9 million for 1993 down to £10.8 million for 1994 and to £9 million for 1995. By the time that £9 million has been eaten into by regional grants, the board is left with £3 million to promote better tourist opportunities. That is ludicrous and ridiculous. The Minister must go some way towards reassuring me about those matters.
There are 200,000 small businesses which make up the totality of the tourist industry. The Government pride themselves on establishing small businesses. Of course, it is a fact that there are now 200,000 small businesses but they were large businesses when this Government came to power—10 years later the Government have reduced them to being small businesses. They cannot be proud of that. We should look at what other countries do; for example, on the Continent, Japan and America. We should look at what the different states of America spend in encouraging tourists from other countries. What the Government spend is appalling.
In the context of what the Government say they want to do, which is to reduce unemployment and to expand employment, the Government's actions are almost criminal. Reference has been made to the 1.5 million people who are employed in the industry. The Government's present policy in this matter is therefore incomprehensible. Can the Minister tell us the rationale behind cutting down the Section 4 grants to the English Tourist Board over the past few years? They have not only been cut down but have been removed altogether. Comments which have been made in the House tonight need to be addressed.
What is the intention of the Government in respect of the English Tourist Board? Is it the Government's intention to cause its slow death by one means or another? We are all politicians and we can all see the drift and the trend here. How on earth can the British Tourist Authority and the English Tourist Board with a staff of 360—they face about 70 redundancies—do a better job with a 20 per cent. cut in their staff? The Government must give us an answer to that.
337 I was interested in the comments of the noble Lord, Lord Walpole, about Yarmouth and Clacton where unemployment has risen to 20 per cent. I smiled when he said those towns were not the Barnsleys and the Doncasters of this world which have always had to suffer high unemployment. The Clactons and the Yarmouths of this world have not been used to unemployment. It is a great pity that some Members of Parliament become concerned about unemployment rates only when they affect their own constituencies while other constituencies have suffered high rates of unemployment for years.
What must the Government do to enable the boards to survive and expand? I do not know now whether I am making a charge or a plea to the Government. However, I assert that the Government's behaviour in this matter is inconsistent with their normal policy. Many noble Lords have said that the Government's jumping from one policy to another and the switching of responsibility from one ministry to another has had a devastating effect on the industry. Other noble Lords have asked whether the Government are taking tourism seriously. I question whether they are. I believe they are taking it for granted. They believe that no matter what they do the industry will survive.
The Government should make a real effort to try to knit together the disparate elements that make up the industry. I am not referring merely to the big businesses and hotels and the Thomsons of this world. I am talking about the little people too. There needs to be a partnership between government and the industry. There needs to be a feeling in the industry that this Government respect and elevate the stature of our tourist industry to the same extent as other governments in other countries do for their tourist industries.
I respect the Minister. He has come to the debate dressed for the occasion and we all appreciate that. He and his honourable friends should demonstrate that they are proud of the success of our tourist industry and are willing to fight their corner. More than once in these debates I have argued the case that we want a tourism Minister to adopt a higher profile. We want a Ministry of Tourism and we want a Minister of Tourism. I say with no disrespect to the Ministers concerned that as long as tourism is tagged on as just another part of an expanding portfolio it will simply be regarded as one other job the Minister has to do in a range of others. I do not believe that that is good enough. Mr Robert Key, the present Minister responsible for this matter, has my highest respect. I have seen him perform and I know he is diligent and takes his job seriously. However, I am concerned that the Government are not taking this issue seriously. I believe the present trend is short-sighted and short-term and the industry is being short-changed by the changes in policy that are being made.
I hope that the noble Viscount will take advantage of the opportunity provided by the debate tonight to convey those views to his colleague. We recognise that decisions are not within his brief, but I cannot believe that he has been other than impressed by the sincerity of the views that have been expressed and the 338 underlying anxiety that there is, if not a crisis, then a crisis of confidence in the Government's attitude towards the industry. I very much hope that the Minister will say something kind for the benefit of the people outside the House. We are hardened politicians, but there are men and women throughout the industry who are worried by the trend and the drift in this matter.
§ 10.35 p.m.
My Lords, I, too, must begin by expressing my gratitude to my noble friend Lord Mountevans for giving us the opportunity to discuss tourism this evening. I am pleased to have this chance to set out the Government's approach to this important industry, which makes a major contribution to the economic and social well-being of this country.
I am also delighted to be able to pay tribute to the very valuable contribution which my noble friend Lord Mountevans has made to the industry, particularly through his work with the British Tourist Authority.
I should like to endorse everything that has been said about the importance of the industry, particularly the comments of my noble friends Lady Young and Lord Wade. Tourism contributes some £25 billion to the economy, which is the equivalent of 4 per cent. of our total gross domestic product. One and a half million people work in tourism; more than in construction or transport. The United Kingdom, despite climatic disadvantages and despite ever-increasing international competition, is still fifth in the world in terms of tourism earnings.
This is a very successful industry, and one that has made impressive progress in the past 20 years. We know that tourism worldwide has shown astonishing growth. The World Tourism Organisation calculates that international tourism arrivals rose from 25 million in 1950 to 429 million in 1990. The fact that Britain has kept pace with that growth in the past two decades, and that our share of world tourism has been maintained, testifies to the strength of our domestic tourism industry.
A good share of the credit for that record of success goes to the statutory tourist boards and to the non-statutory regional tourist boards, which also receive government support. The boards' role has been to provide leadership and innovation, and to get all the different component parts of this diverse industry working together.
The industry has followed the lead taken by the boards. Trade associations, marketing consortia, and partnerships between sectors and between the private and public sectors have sprung up all over the country. The number of national operators has increased, and they are now exploiting markets opened up by the tourist boards. Short breaks, off-peak breaks, theme and special interest holidays are but a few examples.
Of course fragmentation and diversity are features of the tourism industry and can hinder the fully effective operation of the market. However, the industry has changed and developed over the past 20 339 years, and the Government have to respond to that change by reconsidering their own role in the development of tourism.
That is the background to my department's recent review of tourism policy, the conclusions of which were announced in November by my right honourable friend the Secretary of State for National Heritage. Public expenditure constraints also reinforce the need to ensure that government funds are used as cost effectively as possible. Thus it is essential to direct the necessarily limited resources available to those areas and activities where the industry is most in need of help.
Our review concluded that the work of the British Tourist Authority in promoting Britain overseas should have top priority. International tourism is fiercely competitive, and Britain would undoubtedly lose out if we did not continue to promote ourselves overseas. Ideally the costs of that marketing would be borne by those who sell the product and who stand to reap the rewards. But the industry, unaided, would not put sufficient money and effort into overseas promotion.
We have therefore decided to maintain the exchequer grant to the BTA at planned levels. The BTA runs an effective overseas operation and one which is recognised as a role model by other countries, particularly in its success in securing a third of its funding in partnership with the industry.
The tourism review also concluded, however, that the case for putting taxpayers' money into domestic tourism promotion is now much less strong. The task is intrinsically easier than overseas promotion since knowledge of the product is much greater among British residents and since individual operators have a much greater chance of reaping direct benefits from investment in promotion.
But the review also found that there are areas of England which do have tourism potential but where the industry is not able fully to exploit that potential unaided. We believe that there is still a case for selective central government investment in areas of this sort, particularly so in those where the growth of tourism could make a contribution to their economic regeneration.
The need for assistance is not uniform across the country. By targeting resources on areas where there is tourism potential we can be better assured of the effective use of grant-in-aid. Funds will be targeted on areas with tourism potential which the industry is unable to exploit fully.
We believe the English Tourist Board still has an important strategic role to play in supporting the development of domestic tourism. The board's expertise in demonstrating to the industry what can be done—for example, national research—and in advising government on tourism matters is still a valuable resource. Its role in directing funds where the industry is most in need of assistance, via the regional tourist boards, will continue.
We believe that there is a central role for the English Tourist Board but with the emphasis on developing and directing the overall strategy rather 340 than carrying out large scale central operations. I am glad to be able to tell my noble friend Lord Montagu of Beaulieu that we have no plans to abolish the English Tourist Board but we have concluded that an increasing proportion of the available resources should be channelled through the regional tourist boards and that the overall scale of the English Tourist Board's own activities should now begin to reduce as a consequence of the increasing ability of the industry to take responsibility for investing in its own future. We are currently discussing with the English Tourist Board its plans for the future in the light of those decisions.
The review that I described covered the work of the BTA and the English Tourist Board, both of which are the responsibility of the Department of National Heritage. I also wish to say something about the current policy regarding the Scottish Tourist Board on behalf of my right honourable friend the Secretary of State for Scotland.
In Scotland, the Government remain committed to supporting the tourism industry, and the current structure for delivering that support has served the interests of the industry well over many years. Ministers are, however, concerned to ensure that the means by which that support is delivered are still appropriate. They are therefore consulting those involved in the tourism industry in Scotland on whether the existing arrangements are effective, and, if not, on how they might be improved. In answer to the noble Earl, Lord Glasgow, who gave us what one might call a scenic tour of the Clyde, we hope that an announcement on the results of the consultation will be made in the summer.
The Government continue to support tourism through the various statutory bodies. They will also, of course, continue to provide support for many key elements of our national tourism product such as museums, galleries, the built heritage, the royal parks, palaces, the arts and sport. Next year, despite the current difficult public spending round, the Department of National Heritage will spend nearly £1 billion, much of which will directly benefit tourism.
In answer to the noble Lord, Lord Walpole, we are happy to keep this parcel that has been handed to us at the Department of National Heritage. I can also tell him that I have even spoken to the Great Yarmouth Tourist Association, his local area, on the very subject of tourism.
The Department of National Heritage was established to provide for the first time a clear focus within the Government for those activities which lie at the heart of our national life. Those matters are also the life blood of our tourism industry. Our heritage in all its manifestations has been shown by many surveys to be the magnet that draws foreign visitors to our shores. Indeed, if one looks at the activities of the Department of National Heritage, tourism is a core activity and the cement that binds all activities. It is the factor that links all the other tasks.
The noble Lord, Lord Pitt, and the noble Baroness, Lady Hamwee, asked me about London. The Government are committed to the promotion of London as a world class capital city and as a centre of 341 business, culture and tourism. I agreed with much of' what the noble Lord, Lord Pitt, said on the importance of London. The formation of the Cabinet sub-committee on London demonstrates the determination of the Government to look at matters affecting the city at the highest possible level, to ensure that policies affecting London are co-ordinated and to ensure that things get done. I should also tell the noble Baroness, Lady Hamwee, that the setting up of the Transport Working Group for London, led by a Minister with responsibilities for transport, also illustrates that commitment.
§ Baroness Hamwee
My Lords, perhaps I may ask the Minister whether it would illustrate a greater commitment and openness of mind if the Cabinet committee would discuss the issues which it is considering with those of us who represent London directly. With the committee's agenda not being public, we are not in a position to give it the support we would like.
The noble Baroness may certainly come along to talk to the Ministers involved in that Cabinet committee. Indeed she has been to see the Secretary of State at the Department of National Heritage, although I was not at the meeting.
Perhaps I may turn to the London Forum for a moment. The Secretary of State for the Environment has invited Sir Allen Sheppard of Grand Metropolitan to chair a new private sector London Forum which will promote London. I am advised that there will be an announcement on membership shortly and that the Forum is likely to be launched in March.
Detailed discussions on the merger with the London Tourist Board are taking place between Sir Allen Sheppard and Sir Hugh Bidwell, the London Tourist Board chairman, who is also deputy chairman of the forum. The London Forum and London First will complement each other. The forum will promote London overseas as a centre for business and finance as well as culture and tourism, whereas London First will concentrate on tackling problems which hinder the promotion of London. They will share a chairman and chief executive, which will help to ensure that they do not duplicate each other's work.
These new bodies will not encroach on the work of the BTA. The essence of the forum is that there will be a small hand-picked group of high profile people with their own network and contacts who can make a strong individual contribution. It is a different body with a different remit.
The noble Lord, Lord Pitt, also asked me about the funding of the London Tourist Board. I appreciate very clearly the difficulties which the London Tourist Board has experienced in securing local authority 342 funding. However, this is obviously a matter for negotiation with the board and the local authorities. Its funding from the English Tourist Board was £829,000 in the year 1991–92.
The noble Lord, Lord Redesdale, talked about devaluation. There has been a cry from the industry over recent years about devaluation. I cannot claim that the sole reason for the Chancellor of the Exchequer leaving the ERM was the tourist industry, but that has given a major boost to the industry. A competitive pound makes a great deal of difference to the numbers and spending of overseas visitors.
I hope that I have been able to explain our policy towards statutory tourist boards in this country. The Government's recognition of the importance of tourism and our commitment to the industry should not be in doubt. Nor is that commitment to be gauged solely in terms of the funding we provide for the boards. We are determined to provide the framework for the industry to flourish. This means removing barriers to enterprise and unnecessary regulation and allowing the free operation of the market.
Tourism is an industry with 1½ million employees, 6 per cent. of Great Britain's total. There is more employment in tourism than in construction or transport. Employment has grown by 27 per cent. in the past 10 years, compared with 2 per cent. for all employment sectors. Tourism, by its very nature, provides a huge variety and number of jobs across a whole range of industrial sectors and at all skill levels. It is particularly rich in entry level jobs for young people, as my noble friend Lady Young pointed out. It offers both full-time and part-time opportunities. Increasingly, it can offer a wide range of vocational qualifications. It is a proven growth sector, with potential for further rapid growth. We look forward to its continued expansion, we recognise its importance. We in the department will do our share to help the industry to realise its full potential.
§ Lord Graham of Edmonton
My Lords, before the noble Viscount sits down, would he care to comment on the observations, from his wide experience, of Mr. William Davis, when he resigned?
My Lords, Mr William Davis was chairman of the English Tourist Board and the British Tourist Board for three years. As has been said, we recognise the importance of the work done by both boards over that period.