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9.59 am

Mr. Ronnie Fearn (Southport): I welcome the new Minister to the first real debate on tourism that we have had, at least since the last Session. Having spoken to members of tourism bodies over the summer, I am pleased to learn that the hon. Lady is already regarded as a well informed and enthusiastic Minister. I trust that she will raise the profile of tourism in Government, as it is one of our largest and most job-creating industries. Its success and growth are vital to a modern Britain.

I am also pleased that the Minister has acceded to my request that she visit the beautiful and go-ahead resort of Southport. She will have plenty to see--both our traditional heritage, and the new investment that is taking place. Thanks to European, lottery and other funding, Southport's new promenade and sea defences have now been completed. The new town centre gardens have been opened on famous Lord street, the pier is to be renovated, and preparations are being made for the construction of a major new indoor complex.

As I see it, British tourism is approaching a crossroads. Year on year there has been growth in the industry, but two major obstacles lie in the way. First, owing to the very success of the industry up to this point--it is now the fifth largest in Britain--it has grown so large that a measure of strategic planning has been essential to overcome the problem of fragmentation, and also to protect our environment from the excesses that uncontrolled and sustained growth in an industry brings.

We need a permanent strategic body that does not merely cover the same ground as the Department of Culture, Media and Sport. I ask the Minister to consider establishing a tourism commission for England, consisting of representatives of the industry and Government. The DCMS should be involved, but so should the Department of Trade and Industry and the Department of the Environment, Transport and the Regions. We must get away from the image of tourism as solely part of culture, rather than part of economic development.

The tourism commission should also include tourism business leaders, as well as representatives of small businesses and other interested bodies. It could draw up a modern and relevant remit for the essential English tourist board and the British Tourist Authority; it could propose new planning regulations relevant to the needs of resorts and other tourist sites, and take evidence from trade unions and the Low Pay Commission. Tourism is one of the lowest-paying industries, with the least job security. The commission could also advise Government on their new transport policies. Tourism in England has no ombudsman, and standards vary considerably; a commission could set those standards, and appoint a watchdog to monitor them. Being a strategic rather than an operational body, it would not require any significant funding.

I trust that the Minister recognises that those issues need to be tackled in the medium and the long term if the industry is to be stabilised, and I hope that the Department's forthcoming tourism forum document will contain proposals to that effect.

The second obstacle to progress is the cost of tourism in Britain, compared to other European countries. As the Secretary of State for Culture, Media and Sport observed at a recent dinner of the Tourism Society, to attract overseas visitors we must market ourselves on quality.

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To secure that quality, however, we shall need investment for the upgrading and maintaining of standards. I am glad that regional development agencies will have a major responsibility to tourism. Investment for tourism projects, which can be highly influenced by the exact needs of the location, should be directed at the projects themselves, rather than being decided centrally. It is, however, essential for funds available to tourism through regional development agencies to be spent on investment. Regional tourist boards have done a great job so far on their small budgets, especially in obtaining partnership moneys, and they should be maintained; but they must take on a new role, liaising with regional development agencies.

The lottery, through the national heritage memorial fund, has been a valuable source of money for the less commercial and non-commercial aspects of tourism, and for some major renovation projects. For example, although our Victorian piers and parks are not in themselves big money spinners, their presence attracts visitors, thus generating business for many resorts. I am keen for RDA funds for tourism to be used widely as match-funding for such investments. Many traditional resorts are members of the excellent British Resorts Association, whose advice should be sought on all aspects of regenerating our seaside towns.

With the ending of section 4 grants, small businesses in England and Wales lost access to funds to upgrade their facilities; yet the emphasis is now on quality. Small businesses in tourism have short seasons, and work to tight budgets. Because tourism is not an industry in which major profits are generally made--except in large London enterprises--funds from within the industry are seldom available to cover even the relatively small sums that are required. RDAs should have the option of helping to fund that sort of investment as well.

Another aspect of quality is who will monitor it. If, as is widely rumoured, the English tourist board's remit is to be reassessed, the Government must make alternative arrangements for the monitoring of standards. Another job for a tourism commission would be the drawing up of national guidelines, and the appointment of an independent monitor. That monitor should not work on a commercial basis, unlike the various bodies that currently grade hotels.

Notwithstanding new initiatives in respect of quality, prices and costs still matter. According to figures released by the British Tourist Authority, tourism receipts, for the first time, did not grow last year. We still have many visitors, despite the crisis in Asia, but the strong pound is reducing their spending power significantly, and they are not staying as long as they used to. The big issue relating to price, however, is that many more Britons are taking advantage of the relative cheapness of travelling abroad. If prices continue to be so high that it is cheaper for most people to take a summer holiday abroad--not even taking the climate into account--our domestic tourism may go into long-term decline, unless the Government take steps to redress the balance.

The introduction of the euro across the channel, but not in the United Kingdom, may damage us. International and business travellers will need to change their money into just one currency. Selling our holidays to Europeans will involve the expense of currency exchange, which will push up costs in comparison.

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Mr. Jenkin: Will the hon. Gentleman give way?

Mr. Fearn: I will certainly give way to my friend from the Select Committee.

Mr. Jenkin: Is the hon. Gentleman suggesting that the vast majority of people who visit this country come from Europe? If so, he is much mistaken. People come from throughout the world. For instance, we have many visitors from the United States, south-east Asia and Japan, in whose decision-making the European currency issue is not paramount.

Mr. Fearn: The Americans have certainly been a major contributor to the industry so far, and American tourists will continue to come here; but as I am sure the hon. Gentleman has noticed, the Japanese are no longer visiting the country in such large numbers.

It is plain that, from the point of view of tourism--for which currency exchange is a major cost--the sooner the euro is introduced here, the better. I am pleased that the Government have moved to a position of "when" rather than "if". At least our attitude is becoming clearer, and that is much better for industry than the limbo in which we have been living.

Mr. Nigel Waterson (Eastbourne): Is the hon. Gentleman going to mention his party's proposals for the abolition of the BTA, and explain why he considers its abolition to be good for tourism?

Mr. Fearn: I have already mentioned the BTA twice; I have also mentioned the English tourist board. The proposal for abolition is not final, and there has been no firm statement in any of our documents.

Until recently, much of the work of the DCMS has been preoccupied with the "cool Britannia" image and similar diversions. Issues such as the strength of the pound, and one of the highest VAT rates levied on hotel accommodation providers anywhere in Europe, have been brushed under the carpet. The VAT crisis is particularly important, and the Government should tackle it.

Earlier this year, Deloitte and Touche published an extensive report on the likely effects on the industry, and revenue for the Treasury, of a cut in VAT on accommodation to the European average. The Government have had plenty of time to assess the report's findings. I ask the Minister--as I asked her predecessor--whether she has made any decisions on the basis of those findings, and whether she intends to press the case for a reduction of VAT to average European levels with the Treasury. Both this and the previous Government have pledged to equalise VAT rates across Europe as part of the establishment of the single market and the deal to end duty-free, which in itself will cost jobs. So far, however, the Treasury is stonewalling on the subject; nothing has happened. By equalising VAT, the Treasury could help tourism and raise revenue in the medium and long term.

Tourism needs to be a higher priority in investment and economic development, and there should be both a closer concentration on the quality of the product that we offer the consumer and a national long-term strategy for development. So far, such a strategy is lacking.

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