§ 7.50 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 am pleased to have this opportunity, and I am grateful to the usual channels for giving it to me, to introduce tonight's short debate on tourism, in which I declare an interest.
606 Before sketching out the background and then raising concerns, I should like to take the opportunity of paying a brief tribute to our late friend, Lord Pitt of Hampstead. Reading the obituaries one realises what a bright diamond and what a multifaceted one he was. One wishes one had known him better and known him longer, but one also rejoices that one had known him at all. He was for several years a vice-president of the London Tourist Board and an active participant in our tourism debates, always fighting for more funds for the promotion of London. Noble Lords can imagine how delighted he was when, in the face of a difficult spending round, my right honourable friend the Secretary of State and my noble friend the Minister for Tourism were able to secure and then announce such funds on Budget day.
Tourism is, as those of us who have been involved in it know, one of this country's most important industries. It accounts for one third of all service sector exports—that is more than the financial services sector—and for well over 5 per cent. of GDP. Domestic and overseas visitors together spend perhaps £90 million each day. Around 1.5 million people depend on the industry for their livelihood. Those are impressive figures, as I am sure your Lordships will agree. But tourism has not in the past, in spite of the combined efforts of the tourist boards and the industry trade associations, got the recognition it deserves, mainly, I suspect, because it is a fragmented industry made up in many cases of very small businesses.
I have been most encouraged that the Government have paid more than lip service to the importance of the industry. The extra funds that I have already mentioned for the promotion of London are tangible proof of this enhanced commitment, and very welcome they are to us all. However, at the risk of seeming ungrateful, I want to sound a cautionary note and put down some markers for further thought.
I said that the figures I have just quoted about the tourism industry were impressive, as indeed they are, but other figures are less so, which should give the Government pause for thought. Between 1980 and 1991 international tourism to the United Kingdom grew at an annual rate of 5.7 per cent. That sounds quite good until one compares it with the world average of 8.5 per cent. We did not even keep up with the European average of 7.6 per cent. When one looks at the growth rates of the Americas—more than 10 per cent.—and the region with the fastest rate of growth—East Asia and the Pacific—where the average annual growth amounted to an amazing 15 per cent., one begins to realise the scale of the competition we are up against.
My message is that we cannot rest on our laurels and assume that people will automatically wish to take their holidays here. Domestic and overseas visitors have to be persuaded that this country offers what they want in a holiday. The Government, the tourist boards and the tourism industry all have a part to play in this.
When people talk about tourism they tend to think about international tourism and forget about people taking holidays in their own country. Yet there are very few—I should go so far as to say no—tourist facilities in this country which can survive on income from overseas 607 visitors alone. We ignore the importance of domestic tourism at our peril. Over the past 10 years, the balance of spending by British residents on overseas and home holidays has completely reversed. In 1983, less than half the money spent on holidays by the British went on holidays abroad. Ten years later, well over half the money flowed overseas, and I understand that the situation has worsened since then. We now have a negative balance of payments on the tourism account where we used to have a positive one.
When I spoke almost exactly two years ago in this House on the role of the statutory tourist boards, I mentioned my concern at the disparity in funding between the boards, and particularly between the English, Scottish and Wales Tourists Boards. The gap has in fact widened since then, with what I can only describe as further savage budget cuts to the English Tourist Board, whose grant-in-aid has been reduced from more than £23 million in 1988–89 to only £10 million in the coming financial year. The Scottish and Wales Tourist Boards have over the same period had their budgets increased, with the Scottish Tourist Board having just been given additional money specifically for domestic promotion, following a substantial decline in visitors to Scotland from other parts of this country. I fail to understand how the parts of Great Britain can be so differently treated. It is not enough for government to hide behind the excuse that matters pertaining to the scottish and Wales Tourist Boards are the responsibility of their respective Secretaries of State. The problems of attracting visitors, of stimulating investment and of reducing seasonality are no different in, say, Cornwall than in West Wales or Northern Scotland.
The British Tourist Authority—my erstwhile colleagues—continues to do excellent work overseas, each year picking up more and more accolades for its work. It has been voted top tourist office in countries as far apart as Australia, the US and Ireland. Equally gratifying to those who work for it is the number of foreign tourist offices which are now imitating our methods and as gratifying to my colleagues is the number of foreign governments who are coming to the BTA to ask how to do the job. However, the budget cuts inflicted on the English Tourist Board have hampered not only the English Tourist Board's work but also that of the authority. Since 1985, as a result of one of the numerous government reviews to which the boards have been subject, the BTA and ETB have had a joint chairman, occupied the same building and shared some joint departments serving both boards. The cuts and redundancies at ETB have left the BTA facing increased costs if it is to pick up the tab for things which the English Tourist Board can no longer afford to do or watch while valuable functions are dropped or drastically scaled down.
On a wider scale, in looking at facilities which are of importance to visitors overseas, the Government have, without apparent consistent reason, treated England, Scotland and Wales differently. Why has the English Tourist Board been required by the Department of National Heritage to review its involvement with accommodation classification and grading schemes, when the Scottish Tourist Board, with, I understand, 608 Scottish Office backing, has been developing similar schemes in Scotland? Why has the value of the English Tourist Board's work with tourist information centres been questioned when that of the Scottish Tourist Board and Wales Tourist Board has not? The overseas visitor has the same need for information on where to go and what to see, the same need for reassurance on accommodation quality, wherever he is in our country. I hope that the Minister will be able to reassure me today that the Government's commitment to these important aspects of the English Tourist Board's work is not in doubt and that funding will continue.
A truly national approach to the challenges facing the tourism industry is needed if we are to succeed in helping this country maintain, let alone improve, its market share. I hope that the Government will be working towards achieving this, not least by supporting the work of the national tourist boards against consistent criteria for England, Scotland and Wales in persuading our people to take more holidays here and in encouraging the highest standards in what we offer to our visitors from home and abroad, and by continuing to back the excellent work of the British Tourist Authority overseas. I understand that the boards are making substantial progress in working more closely together on marketing and development issues. May I hope to see the Government adopting a similar Britain-wide stance? It will be to the benefit of us all.
§ 7.59 p.m.
§ Baroness White
My Lords, I too wish to pay a brief tribute to our friend and colleague the late Lord Pitt of Hampstead. I first met him in 1959 when I lived in Hampstead. But much later on in 1964 I was the last ever Parliamentary Secretary in the Colonial Office, before it was absorbed by the Commonwealth Office. I found that David's reputation and his name opened many doors in the Caribbean which would otherwise have remained closed. There can be few people held in such esteem simultaneously in their own country and in high office in the United Kingdom, as was abundantly true of David Pitt. That includes, of course, his work for the London Tourist Board.
My own concern about contemporary tourism in the United Kingdom is centred in my own country, which is Wales. With the desperate decline in the major industries of coal and steel and in certain areas of agriculture, proportionately tourism is far more important for Wales than it is for England. The noble Lord, Lord Mountevans, who opened the debate will, I am sure, bear that in mind. It is a very obvious consideration to those of us who live and work in Wales.
I do not agree very often with the Secretary of State for Wales. What he is doing for local government is extremely disturbing. But in the matter of tourism he has been genuinely helpful. Last May he launched the Wales Tourist Board's current strategy, "Tourism 2000", which has won considerable praise.
The Wales Tourist Board is one of the four set up in 1969. It is now an independent statutory body financed primarily by the Welsh Office. In 1992 Wales obtained legal consent to market directly overseas, which was bestowed on Scotland in 1984. The Wales Tourist Board 609 has proceeded from strength to strength and taken over some of the responsibilities of the Welsh Development Agency in promoting private sector activities.
Should some noble Lords believe that these initiatives in Wales might fragment British overseas touring interests, I am assured that the precise opposite has happened. There is now the most carefully co-ordinated programme drawn up by the Wales Tourist Board with the British Tourist Authority and with BTA managers overseas.
People in Wales have become steadily more active and interested, especially where North America is concerned. Just recently we sent a delegation across the Atlantic which included not only officials and business people, but our outstanding soloist, Bryn Terfel, our "special ambassador" from the Land of Song. He sang at the Metropolitan.
At home the Wales Tourist Board has established excellent customer-care training schemes, particularly for small and family businesses, so far with over 20,000 participants. That is a pretty good record. In 1984 only two tourist information centres in Wales were open throughout the year. Now there are nearly 50.
I could go on but time forbids. We are doing very well, thank you, in Wales. Independence has paid off well. We should be allowed to expand and to thrive. I have no doubt that that is the best course for Wales and for Britain.
§ 8.4 p.m.
§ Lord Walpole
My Lords, I should also like to thank the noble Lord, Lord Mountevans, for giving me the opportunity of perhaps catching up with tourism. I have to declare an interest in that I run two very small tourist attractions. I have been a member of the East Anglian Tourist Board since it started. I was chairman for some six years and have been vice-president for the past six years, so I feel that I know something about tourism as it was.
It is getting late because of a certain Welsh question which we had just now. They are different from people in London. People in East Anglia, and particularly in Norfolk, Suffolk and Cambridgeshire, are also very different from people in London. They have felt that for a very long time. Over the past few years I have watched with dismay the amount of money which the Government have handed out to the national tourist boards diminishing in real terms, particularly to the English Tourist Board. As far as I am concerned, support from the English Tourist Board to the regional boards has also diminished; perhaps not as rapidly, but certainly it has diminished. This year the East Anglian Tourist Board will expect to get some £60,000 less from the English Tourist Board than it had the year before.
I ask the Minister this question: do the Government still support the concept of regional boards or do they expect members of the boards to pick up that shortfall? Is this in fact a form of creeping privatisation? I have noticed also that the London Tourist Board—bless it because when I was involved with tourist boards it was in a fairly parlous state—has managed to attract yet further money from the Government, I believe from 610 Vision 2000. I also noticed that in the last Budget statement a certain amount of what I would have called "tourist money" went to the CBI. I understand that it has a tourist action group which is looking into benchmarking.
Can the Government tell me how they view the London Tourist Board's work? Is it something particularly special? How do the Government view the work of the CBI in its relationship with the English Tourist Board? I am a little out of date, but can the Minister define what "benchmarking" actually means and why the national tourist boards cannot do it themselves?
The noble Lord, Lord Mountevans, has already touched on standards. Do the Government support the English Tourist Board's decision to give classification to accommodation more like that in Scotland than has been run in England for the past 10 years or so, or are the Government still sitting on the fence and not giving advice?
Do the Government still support the concept of tourist information centres being subsidised—as, indeed, they are —not in their actual day-to-day running, but in their training and the host of things which make tourist information centres places which the public should aim for? I believe that the native public should also go to tourist information centres. They are not just for foreigners. Do the Government believe, as I suspect, that the network of tourist information centres is now secure, mature and should be self-supporting? Perhaps that also should be privatised. I fear what would happen if it were. The larger tourism operators would in fact take advantage of it and any form of privatisation would militate against the thousands of smaller attractions, which would not be able to afford to use the network.
I now turn to green tourism. Not long ago that concept seemed to find favour with both the Government and the tourist boards. Perhaps I may quote from a recent letter from the English Tourist Board to the Council for the Protection of Rural England in response to a request for a meeting on the subject. The English Tourist Board stated:Having lost over half our total staff numbers in two years, it has become increasingly difficult to find time for some of the things which are important rather than urgent. Hence, at least for the time being, much of our work of 'sustainability' has had to be put on the back burner".That is to say, the English Tourist Board has not the resources to carry out green tourism. Would the Minister like to comment on that one? Finally, I understood that the Government were about to issue a policy statement on tourism. When will that emerge or are we in for a major statement tonight?
§ 8.10 p.m.
§ Lord Wise
My Lords, I am especially grateful to my noble friend Lord Mountevans for raising this question this evening, but perhaps I should say first that this debate gives me an opportunity to join in the tributes that have been paid to our late friend Lord Pitt. I valued his friendship and was always very grateful for the friendly and sound advice that he gave me so readily on 611 the many occasions on which I sought it. I shall miss him—perhaps not least for—how shall I put it?—his merry little chuckle.
The debate also gives us an opportunity to discuss briefly the tourism industry. I should like to dwell on the status of the smaller hotels. We all agree about the vital importance of the industry to our balance of payments problems. My noble friend dwelt on that. If tourism's importance is to continue, it is essential that visitors obtain good value for money whatever the standard of the hotel in which they choose to stay. They would then return home happily, spread the good news about the excellence of our accommodation, and other visitors would flock in. Sadly, I do not believe that that is always the case—certainly not in London in the relatively smaller hotels. There are innumerable complaints.
It is most important that there is some control to uphold standards. At the moment, hoteliers can fill in a form stating the type of accommodation and facilities that they offer and thereby obtain a relevant crown rating, albeit without the tourist board commendation. But there is no guarantee that those facilities will remain. The bar or restaurant may be open in the evenings or it may be closed. Such hoteliers advertise in tourist board brochures. When the foreign visitor sees four stars or a crown, he thinks that that is all that he needs to know. The fact that there is no tourist board commendation is immaterial to him because it means nothing to him. He probably will not understand it anyway. As the standards are lower in such hotels than in four-star commended hotels, prices are slightly lower so tourists go to those and are often bitterly disappointed. He may complain, but if he has booked for a week, he will have to pay for that. In any case, he probably will not be able to get in anywhere else. With his possibly small command of the language, he is at a tremendous disadvantage, but the hotelier does not care. He will never see the tourist again anyway.
I understand that the Department of National Heritage, which sponsors the British Tourist Authority and the English Tourist Board, has conducted a review of the work of the tourist boards. In its report it said that it wants to give priority to reinvigorating the accommodation sector and to further strengthening the grading and classification scheme. Indeed, holiday homes and caravan parks are already quality graded as an integral part of the classification inspection process. I wonder whether my noble friend the Minister can tell me whether the Government have ever considered legislation giving tourist boards powers to operate a licensing scheme on which it would be obligatory for all hotels to register. That could be self-financing given that at present in order to achieve commended status a fee has to be paid to the board. If all hotels participated, the fee would be correspondingly less and affordable, and revenue would be generated. Such a scheme within the quality grading and classification process would do much to improve standards and value for money in hotels of all levels. That power could easily be delegated to the tourist boards to enforce. It would bring about more competition within the industry as hotels would start renovating and upgrading in order to compete.
612 However, if individual small hotels are to start investing their capital in order to upgrade, they need more incentives for expansion. That means that there must be some relaxation in the very stringent planning regulations. If a small hotel wishes to acquire a vacant adjoining property in order to expand, it seems that at present there is very little hope of it being granted planning permission for a change of use. Even though it could clearly demonstrate that the demand was there, it is highly unlikely that it would get that permission. One often wonders why. In fact, one often wonders about planning.
I know of one relatively small hotel in London. It is an excellent hotel. It is absolutely first-class and, if not the best, it is one of the best of its kind in London. That hotel has a small plaque outside the front door showing its tourist board four-crown commendation. The plaque is not in anyone's way. It is not obstructing anyone's vision and I cannot see what harm it is doing, but it has to be taken down. Why? Because no other hotel in that area has such a sign. But that hotel is the only hotel in that area to be entitled to such a plaque, so why should it not let the visitor looking for accommodation know it? It seems to me to be bureaucracy gone mad, but I suppose that that is the planners' thinking.
Visitors from overseas want to come to London. They want to come to Britain. We do not want them to go away unhappy and if we are to compete with the other capitals and countries of Europe we must make sure that they do not. Given the powers, the tourist boards are the means of ensuring that.
§ 8.17 p.m.
§ Lord Holme of Cheltenham
My Lords, I too must express my appreciation to the noble Lord, Lord Mountevans, for making this debate possible and for his words about Lord Pitt, whom we have sadly lost. Many noble Lords knew David Pitt a lot longer than I did. I first met him 20 years ago when I signed him up as, I think, the first Labour parliamentarian to join the then National Committee for Electoral Reform. I know from talking to him just before his sad death that he was much encouraged by progress in that area. He was a good friend to many noble Lords and is very much missed.
Tourism is an important subject. The OECD predicts that by the turn of the century tourism will be the largest single industry in the world, so it is relevant to ask how we are doing in Britain. How do we measure up? There have been some signal successes and we should express our appreciation to the many people who work creatively in tourism for those successes.
Overall, however—the Government should be concerned about this—we are not doing as well as we should. Our market share of global tourism has fallen over the past decade from approximately 6 per cent. to approximately 4.3 per cent. Had we maintained our market share, it would have added about 10 per cent. in employment terms to the 1.5 million people who are employed in the tourism industry—in other words, perhaps another 150,000 jobs. It would certainly have produced in earnings or revenue another £9 billion to add to the £30 billion that tourism already represents, with all that that would have meant for our balance of 613 payments. So we are talking about something that is of the greatest possible significance to the national economy. If one is not doing as well as one should—I do not think that that point is arguable—I suppose that any competent marketing manager in industry would ask "Why?" and would raise questions about the product, its price and promotion. Such a marketing manager would ask, "What could we do better?"
As regards the product, this beautiful country may not have dependable sun, surf or snow, but it has some of the most incomparably beautiful countryside in the world. We have a wealth of historical buildings and a vibrant contemporary culture. There is nothing wrong with the product in Britain as a whole or in Wales, Scotland or the regions. This is an attractive place for people to visit. The answer must lie in the marketing—the way we present the country and the prices we set (the prices of our hotels are high compared to those in many other parts of the world); the service we offer; our salesmanship; and, above all, the marketing budget. Are we spending enough in the right way to promote this country's tourism around the world?
The noble Lord, Lord Walpole, asked about bench-marking. I do not want to anticipate the Minister's reply, but I believe that bench-marking means measuring oneself against the best of the competition. I wonder whether we are doing as well as we should internationally against the best of the competition. That is why the tourist boards are important and why it is important to have a clear statement of the Government's intentions and whether they are honourable; whether they see the tourist boards having a continuing and, I hope, an expanding place in the constellation of marketing effort that goes into British tourism.
There are problems. The Minister will know that Bill Davis, the former chairman of the BTA, said:the Government have no consistent strategy. I have served three different Secretaries of State, all of whom had their own priorities".There is a question about consistency. This is an area where we must think long term, as other countries and the regions of other countries do. There is the question of co-ordination. There are so many departments involved. There are the Departments of Transport, the Environment and National Heritage. In the Government's own paper Tourism in the UK they talked about establishing strong and co-ordinated leadership for all tourism sectoral interests. Co-ordination is demonstrably not as good as it should be. Now we have the cutbacks to which several noble Lords have referred. The English tourist boards have lost over half their staff numbers in the past two years.
I should like to ask the Minister about Northern Ireland, for which I have some responsibilities from these Benches. Now that Northern Ireland is relatively so much more peaceful and the prospects of it becoming permanently peaceful are improving, it must become a more attractive tourist location than it already is. It is a most attractive place to visit. Do the Government see the new situation demanding more investment to promote Northern Ireland? What are their intentions on that 614 score? Will they continue to work with the Republic of Ireland to present the island of Ireland's attractions as a whole, especially in the United States?
Perhaps I may conclude by urging three points of action on the Government. The first is that they reverse the cuts. The second is that they should promote green tourism and make it possible to do that in the context of ensured environmental sustainability. The final point is one that the Government should take seriously. Some kind of equalisation and review mechanism is needed. It cannot be fair that in south-west England, for instance, it is local residents, whether through the unified business rate or water charges, who have to bear the heavy costs of making that region more attractive to tourists because it benefits us all if visitors come here to go to that part of the world. Is it sensible that local residents should bear the entire cost, as they do at present?
§ 8.24 p.m.
§ Lord Graham of Edmonton
My Lords, I apologise to the House for how I look and how I sound, but I am not well.
I join with others in thanking the noble Lord, Lord Mountevans, for initiating the debate. From this Front Bench I want to respond to the moving tributes that have been paid to our dear comrade David Pitt. They were made first most eloquently by the noble Lord, Lord Mountevans. We all know that David Pitt was a man of immense energy, passion and emotion. He made countless friends for the causes he espoused, none more so than for the Caribbean. Undoubtedly, his West Indian credentials will have helped, but it was his deep love of London and its peoples which fitted him so well for his role as deputy chairman of the London Tourist Board. There never was an opportunity to promote or protect London or the Caribbean which he allowed to pass. He brought to both, his unique blend of wisdom mixed with humour, and laced with plain common sense. His stature in tourism, as in all other fields, was of the highest. We mourn a good man who left an indelible impression on the London and the Londoners whom he loved, and who loved him in return.
§ Lord Graham of Edmonton
My Lords, we know of David Pitt's abiding love for London and Londoners. He undoubtedly loved not just the stupendous, prestigious tourist attractions such as Buckingham Palace, the Palace of Westminster, the Changing of the Guard, the Tower of London and the like, he would equally love what I call "the other London". In many a London borough there are fascinating places known to few visitors from abroad, and even from within Britain, but nevertheless worthy of visits.
I discovered an interesting hybrid called Discover Islington —a small struggling group, surviving on a shoestring, trying to serve those who live and work in that borough, and which, hitherto, merited support from, among others, the English Tourist Board. But not any more. That funding has dried up. Using public as well as private money, it opens up vistas of the other London about which we know but which needs sorely to be opened up and supported by us all. Perhaps I may ask 615 the Minister a direct question. Will he look, or look again, at the type of initiative represented by Discover Islington? Sir John Egan can safely be left to nourish pomp and pageantry, but we need also to nourish that other London so beloved by David Pitt.
The other night I was a guest at a dinner given by ABTA for parliamentarians who take an interest in tourism. Mr Colin Trigger, the ABTA president, invited his fellow travel industry colleagues to brief us on their concerns. One which gained much support was along the lines that while they seemed to be moderately successful in encouraging British people to holiday abroad, the sad conclusion, based on much evidence, was that the product with which they were in competition—Britain—was declining as a competitor. That was not due to an absence of major attractions—our heritage and our history—but merely to the fact that nationally Britain did not take seriously the need to compete as vigorously as other countries. I asked, "What or who carried most responsibility to redress that?" Back came the emphatic reply, "The Government".
ABTA members are concerned not merely in sending Britons abroad, they convinced me of their concern to make it a two-way traffic. I share ABTA's view that despite the valiant endeavours of many people, the Government are required to lead them to a better future, or, as Adele Bliss, the chairman of the British Tourist Authority, said, when she introduced the BTA annual report last October:If Government can shift its focus more towards accepting the high returns on its investment in tourism rather than seeking to minimise its commitments, whenever possible, then tourism will have the best chance it has had for a decade".If it be the quality of its scepticism which impresses the Minister, he must have been suitably chastened when those who were dubbed "the knights of tourism" visited recently his right honourable friend the Secretary of State in what was undoubtedly the most unprecedented deputation of all time. The Minister knows that their message was to ask the Government to take tourism seriously; that it required tourism to be given a much higher priority in government economic thinking. The Minister will know that Sir Colin Marshall, chairman of British Airways, said to his right honourable friend:The industry remains an also-ran in terms of budget considerations and status within the political forum. In the past, tourism to this country took care of itself. However, as more and more nations world-wide identify the industry's importance as a creator of wealth and jobs, competition is hotting up and we can no longer afford to be complacent".That charge of complacency is one which the Minister tonight should take head on, for the evidence for the charge is plain for all to see.
Adele Biss painted two contrasting scenarios of tourism in Britain. It is easy to be carried away by euphoria based on statistics without being aware of the reality underneath. I believe that the emergence of the new Secretary of State, Mr. Stephen Dorrell, is good news for tourism. He has started to bang the drum for Britain, comparing the delights of Huddersfield with a week-end in Paris. Do not ask me which I would choose! He caught the headlines, however, which is his 616 job. He sounds genuine in his aspirations to see Britain climb back up the league table of attractive countries to which world holiday-makers trek.
In 1980, 60 per cent. of Britons took their holidays here. By 1993 that figure had declined to 45 per cent. The BTA makes a valid point when complaining of a lack of focus and a haphazard approach to the industry by the Government. There are 220,000 tourism businesses—that is, businesses large and small which depend upon tourism. There are 510 local authorities, more than 100 city convention bureaux and four national tourist boards.
It is not just a question of funding, it is a question of leadership. Since 1980 we have seen Britain's share of world tourism decline from 6.7 per cent. to 6.3 per cent. in 1993. It is a challenge to us all—but mostly to the Government. We need increased investment by way of tax incentives, rather than taxes such as the new £5 and £10 airport tax on all incoming holiday-makers.
I know that the Minister, the noble Viscount, Lord Astor, is fighting the good fight. He has earned our thanks for his success in securing more funding for London. We wish him well as, together with his noble friend, he seeks to extend the battle world-wide.
§ 8.32 p.m.
The Parliamentary Under-Secretary of State, Department of National Heritage (Viscount Astor)
My Lords, it is a great privilege to be able to associate myself with the tributes which have been paid by my noble friend Lord Mountevans and others to Lord Pitt in the course of this debate. His accomplishments were many and wide-ranging. He was a distinguished medical practitioner, he was a leader in improving race relations and he was prominent in local government and as a Member of this House.
For much of his life, Lord Pitt worked tirelessly on behalf of the people of London. He was clearly aware of the significance of tourism to this city and gave freely of his time and abilities to play a part in its development. He was vice president of the London Tourist Board and chairman of the policy committee of the London Convention Bureau. Speaking in this Chamber in May 1993, he reminded noble Lords that tourism is particularly important to London. That remains equally true today.
The figures confirm it. About 55 per cent. of overseas tourists to the UK stay in London for at least part of their visit. London receives about 17 million visitors a year, of whom around 10 million are from abroad. Spending by visitors is around £4.5 billion. It is estimated that tourism creates some 200,000 jobs; that is to say, around 7 per cent. of London's working population is employed in tourism.
These figures and the evidence of our own eyes confirm that tourism is of great importance to London. There is also a great deal of evidence which suggests that London is crucial to the performance of the nation's tourism industry. Our capital city is one of Britain's greatest assets in attracting overseas visitors and in persuading British people to take a holiday in this country. In every field, London is a world-class city. You can find other cities with shopping as good as 617 London's. You may find a few places—but not many—which can rival London in the arts and entertainment. Perhaps there is the odd city which can match London's heritage and pageantry. But I doubt that any city in the world can offer all of these in the way that London can.
The Government fully recognise the importance both of tourism to the capital and of London to UK tourism as a whole. In November my right honourable friend the Secretary of State for National Heritage announced that an additional £2 million would be provided to the British Tourist Authority over the next two financial years in order to fund projects which will improve the promotion of London in overseas markets. It will not be provided to the CBI, as the noble Lord, Lord Walpole, suggested. The money will be paid to the British Tourist Authority, which, in partnership with the London Tourist Board, will fund projects to market London.
§ Lord Walpole
My Lords, I referred to a separate grant to the London Tourist Board but perhaps it was to the BTA. My comment about the CBI related to benchmarking.
My Lords, I apologise if I misheard the noble Lord but I wished to clear the matter up. The money will be matched by the BTA from its existing resources to create a total public sector contribution of £4 million to the initiative. The work will be taken forward in partnership with the London Tourist Board and London First, who aim to bring in matching funding from the private sector. The partner organisations will have at their disposal a fund of up to £8 million over two years to add to the already substantial resources which promote London to potential overseas visitors.
The benefits of this promotion will not be confined to the south-east. London is an important gateway to the rest of the country. Many of those overseas visitors who are attracted to London will visit other parts of the UK during their stay. We want to encourage more to do so in order that the benefits from tourism can be more widely shared.
My right honourable friend's initiative will make possible a very significant improvement in the promotion of London. I believe that the benefits from that work will be shared by the whole of the United Kingdom tourist industry.
It is easy to under-estimate the very significant contribution of tourism to the economy of the United Kingdom as a whole. In 1993, the UK received almost 19.2 million visitors from overseas, a 3 per cent. increase on the previous year. Expenditure by overseas residents amounted to £8.9 billion, a 13 per cent. increase on 1992. Figures for the first nine months of 1994 are even more encouraging, with overseas visits up by 6 per cent. on the same period in the previous year and expenditure rising by 8 per cent. Taken as a whole, the tourist industry generates an annual turnover of about £33 billion, which is 5 per cent. of this country's gross domestic product. And it creates an estimated 1.5 million jobs.
Perhaps even more importantly, tourism is, and is likely to remain, an industry with considerable potential for growth. Employment in the sector has increased by 618 30 per cent. during the past 10 years, compared with a growth of 5 per cent. for all industries. And it is widely predicted that by the year 2000 tourism will be the world's biggest industry.
The noble Lord, Lord Holme of Cheltenham, claimed that lack of government support had prohibited the industry from growing at a similar rate to tourism in other countries. The noble Lord produced figures. The calculation was based on the premise that Britain could have maintained its 1980 share of the domestic market. However, since that date there has been a vast increase in the number of people able to afford foreign travel. The market has utterly changed and other northern European countries have experienced exactly the same trend. In fact, Germany's balance of payments deficit is more than four times that of this country. There is also little evidence that government promotional spend has a great deal of effect on large-scale trends. A recent world tourism organisation survey found that amounts spent by governments on promotion bore little relation to their country's tourism earnings.
§ Lord Holme of Cheltenham
My Lords, I am grateful to the Minister for giving way. Is he saying fatalistically that our share of global tourism is therefore bound to decrease and continue to decrease?
My Lords, no, I am not saying that. I am saying that the figures given by the noble Lord compared the industry in 1980 with that of today. However, it has been the subject of great change. If, for example, the economy of this country continues to improve in 1995 more people may take holidays abroad. That may widen the gap. We wish to attract as many people as possible to the country. The real point is that the market has changed over a period of time. The market for people going abroad is entirely different from the market for people visiting this country. Therefore, I do not believe that it is valid to compare them.
We must remember the importance of the tourist industry to all that the Department of National Heritage represents. It is the single most important part of the department. It provides much of the business for the arts and heritage. The spending of overseas visitors on what we might call "cultural tourism" is estimated at around £2 billion in 1993. More than one in three seats in West End theatres are occupied by tourists from overseas. Forty per cent. of those who go to London museums and galleries and over two-thirds of those who go to the capital's historic properties and cathedrals are visitors from abroad.
Tourism heightens the profile and increases the revenues of many artistic and cultural activities. It brings significant benefits and opportunities to all sectors of the national heritage, and it is for that reason that its development is a priority for the Department of National Heritage.
In recognising the very great strengths and achievements of the tourist industry, it is important that we do not become complacent. Britain's share in the international tourist market has fallen over the last 10 years or so, and we feel very strongly that the industry could improve its performance. We need to ensure that the industry offers the consumer good quality, wide 619 choice and value for money. The industry must provide what consumers want, and it must market its products effectively at home and abroad.
We cannot, of course, prevent people in this country taking their holidays abroad. We must accept that there are different markets. People visit different places for different reasons. There are different products. The Department of National Heritage is determined to support the industry and to be its advocate in government at every level.
But a great deal of the responsibility must lie on the members of the industry. Government can and will offer advice and seek to strengthen incentives to improve. But in the end it is the industry which determines what is available to offer to the consumer. Investment and improvements in the quality and competitiveness of our tourism product can, in the end, only be brought about by the industry itself.
Government support for the industry continues largely to be channelled through the British Tourist Authority and the English Tourist Board. Grant in aid to the boards for 1995–96 is £44.5 million. Regional tourist boards, which are independent and not statutory bodies, including the London Tourist Board, continue to be funded for the delivery of specific programmes.
§ Lord Graham of Edmonton
My Lords, I appreciate the noble Viscount allowing me to intervene. Perhaps he will say a few words in support of the initiative which I mentioned called Discover Islington. The people involved in that initiative are not the big boys. They are working on a shoestring and are supported by local authorities and their residents. Those people are attempting to say to tourists visiting this country that almost every borough has something worth seeing. Although the initiative does not receive funding, I am sure that it deserves at least a few kind words from the Minister.
My Lords, I was coming to that point. I am not aware of the details of that scheme. As the noble Lord described it, it sounds particularly interesting. I should be grateful if he will send me some information about it.
§ Lord Parry
My Lords, the fact is (is it not?) that it would be very easy for the Government and the Minister to accept the argument that it is impossible to judge the value of the stimulation of effective marketing and the amount of money invested in it. I have heard that argument over the past 15 years. The fact remains that if that is not done, then our share will decrease.
My Lords, I have absolutely no doubt that the money spent via the various statutory boards has a significant effect in this country and, indeed, abroad. The formula for funding the regional tourist boards was agreed between ETB and the regions and was based on scale, need and performance. Regions can apply for additional funding for specific projects from a tourism development fund.
Recent work with the boards is designed to ensure that the activities of both the ETB and the BTA are based on a rigorous analysis of the needs of the industry and do not substitute for activities which the industry 620 should carry out for itself. We have asked the ETB to concentrate its efforts on strategic functions aimed at developing the quality of the product. It needs to work closely with the BTA and others to identify the types of holiday and the facilities that today's tourists are looking for. We aim to work with the industry to ensure that Britain provides the right products, and offers good quality at reasonable prices.
I know the importance to the industry of the classification and grading scheme for the accommodation sector. A widely recognised and used rating system makes it easier for the consumer to choose what he wants and to distinguish between good and poor. That acts as an incentive to operators to improve and reap the rewards of providing a quality product.
The ETB runs a number of grading schemes, the largest being the crown accommodation classification and grading scheme which covers all serviced accommodation. The ETB is currently reviewing a number of issues which relate to the scheme. It will make known its proposals in due course.
I must say to my noble friend Lord Wise that as far as I know, the industry does not support a statutory grading scheme. We want to make the crown scheme work so well that the industry will wish to join it and feel that it is to its advantage to do so. We do not believe in making new, burdensome regulations. We believe in deregulation.
There is clear evidence that the ETB plays a vital role in tourist information centres and that its work serves to encourage the TICs to provide a wider range of services than might otherwise be available. As a result, a substantial number of visitors are being inspired to travel further afield in this country. I have asked the English Tourist Board to give thought to how the services provided may be further enhanced and in particular to give further thought to the part which the TICs may play in making it easier to book a domestic holiday and in disseminating information on holiday prices.
The BTA is seeking to improve the allocation of its resources among overseas markets. The aim is to ensure that public funding is directed to those areas which will have an impact on visits to this country which will not be achieved by the private sector if left to itself. The authority is looking at the potential growth of particular markets and market segments and at the scope for increasing and improving the private sector's marketing effort.
The noble Baroness, Lady White, informed your Lordships of the successes and the work done by the Wales Tourist Board. I agree with the noble Baroness that it is doing an excellent job. I encourage the BTA and the Wales Tourist Board to work together where it is in both their interests to do so.
The noble Lord, Lord Walpole, asked about the CBI tourism action group. We are extremely pleased that it has established such a group. My department and the statutory tourist boards will collaborate with that group where it is appropriate to do so. As I said, the boards will continue to be the primary instrument through which government policy on tourism is implemented. 621 The noble Lord asked about benchmarking. I believe that that means identifying good practices in the industry and seeking to draw the attention of all businesses to those good practices so that the lessons can be applied.
My noble friend Lord Wise asked about tourism signing. That is an extremely important issue. It is one of the main areas of concern highlighted in my department's investigation into regulations affecting the tourist industry. We reflected those anxieties in our contribution to the Department of Transport's recent review of signing policy. We are currently discussing detailed proposals from the Department of Transport. I hope that it will be possible to relax the existing criteria and to introduce new arrangements which will be better able to meet the needs of tourists and the tourist industry. It is too early to say exactly what form the new arrangements will take but I hope that they will be in place in good time for next year's summer season.
The noble Lord, Lord Holme of Cheltenham, mentioned Northern Ireland. The BTA will continue to co-operate with the Northern Ireland Tourist Board and the tourist authorities in the Republic. I am sure that they will not be slow to appreciate the possibilities created by the new situation that is emerging in Northern Ireland.
In summary, the Government continue to be committed to doing all that they can to help improve the performance of the tourism industry. The statutory tourist organisations will continue to play a full part in those efforts. Tourism is a very successful sector of the economy and has great strengths. The figures for the first 10 months of 1994 are very encouraging. The Government and the boards will continue to play their part in the development of the industry, but the onus is on the industry itself to recognise and build on its strength. It must be prepared to change where change is necessary. We all have a part to play in ensuring that the United Kingdom remains one of the world's foremost tourist destinations.