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Mr. Peter Ainsworth (East Surrey) (by private notice): To ask the Secretary of State for Culture, Media and Sport if he will make a statement on the consequences of foot and mouth disease for the rural tourism industry.
The Secretary of State for Culture, Media and Sport (Mr. Chris Smith): The tourism industry has been badly affected by the foot and mouth outbreak. The industry is a huge and successful part of the economy. It employs about 1.8 million people and contributes as much as £64 billion to the economy. We have been in close touch with industry representatives, the English Tourism Council, the British Tourist Authority and other parts of government during the past two weeks and have been carefully assessing the impact. We have also been in close contact with the Scottish Executive, the National Assembly for Wales and the Northern Ireland Assembly. The impact is mainly on rural areas throughout the UK, but the problem also affects our towns and cities, as visitors from Europe and elsewhere are deterred from coming here at all. That loss of business should be debated with sensitivity and care.
Early on, we agreed with the ETC and the BTA that we were determined not to fuel the damaging media coverage that is already so badly affecting our overseas markets and day visitors. Stories of cancellations and loss of business have to be reported, but they will not help the industry to achieve bookings, especially overseas, where the context is less well understood.
Within the Government, I have been making the position absolutely clear, reporting the difficulties faced by the industry as they have grown and ensuring that the needs of this vital part of the economy are known. I reported to the Cabinet this morning.
As we approach the Easter break--usually a time when a large number of bookings are made--all those involved are very worried about the loss of trade. People in many hotels and attractions have been laid off, businesses are closed and some parts of the countryside are very quiet indeed. The holiday season is gradually starting again and the usual growth in bookings is not materialising. The ETC has advised us that the loss of business is probably of the order of £100 million a week and has suggested that the impact might even reach £250 million a week if the outbreaks continue well into the main season. Those are serious losses.
In everyone's interest, the first priority must be to tackle the disease itself. Our discussions with the industry suggest that it understands fully the need to control the outbreaks of foot and mouth disease, not only to secure agriculture in rural areas but because the image and success of the countryside as a tourist destination is so closely tied up with it. The farming community does so much to look after the countryside that visitors and tourists enjoy visiting. It has the fullest support of the tourism industry, walkers groups and all those who enjoy recreation in the countryside. My right hon. Friend the Minister of Agriculture, Fisheries and Food will make a full statement about that tomorrow.
It would also be appropriate for me to say something about sport. The Government are not recommending the cancellation of any sports event. Any decisions will be for the governing bodies of sport, which should take a common-sense approach that is, above all, proportionate to a realistic appraisal of the risk involved. Therefore, sporting activity, just like any other activity, should not take place within infected areas. However, events elsewhere need not be affected, provided that reasonable precautions are taken.
My hon. Friend the Minister for Tourism, Film and Broadcasting is in Devon now. I will be in Cumbria on Friday and Saturday meeting representatives of the tourism industry. My hon. Friend has been told that more accurate and detailed information will help people organising activities to decide how to stage them, and help visitors to decide where and when to travel. That applies equally to sport. We shall put that matter to the rural economy taskforce to be addressed urgently, as one of its first tasks.
I assure the House that the impact on the tourism industry in rural Britain will be properly addressed and that, when the time comes and the outbreak is over, we will do everything that we can to restore the image of Britain and the British countryside as a tourist destination.
Mr. Ainsworth: I thank the Secretary of State for his reply. Many people in the tourism industry and across rural Britain will find it highly unsatisfactory that, rather than offering a statement to the House on the present crisis in rural tourism, Ministers have had to be persuaded to come here by the Opposition. However, I assure the Secretary of State that Conservative Members will give every support to sensible measures aimed at limiting the scale of the crisis and offering help where it is needed.
It is certainly true, as the Secretary of State said, that plenty of tourist and visitor attractions that are not in rural areas are still very much open for business. However, no part of the rural economy is immune to the consequences of foot and mouth disease. Its effect on farmers has obviously been devastating. As the Secretary of State rightly said, the Government's first task has been, and remains, the containment and eradication of the disease. However, it in no way belittles the problems of farmers to recognise that tourism represents as much as 20 per cent. of economic activity in large areas of the countryside and that it is responsible for up to 400,000 jobs overall. Many of those jobs are now at risk. Employees are already being laid off or asked if they will take unpaid leave.
In areas such as Devon, Cornwall, mid-Wales, the Lake district and the borders, business in hotels, guest houses, restaurants and pubs is reported to have declined by up to 80 per cent. in the past two weeks. There is clearly an immediate and pressing problem with cash flow, which needs to be addressed as a matter of urgency.
The Secretary of State did not comment on the idea of establishing action zones or safe zones. That idea seems to have been floated by a Minister in the Department of the Environment, Transport and the Regions. We have to express some reservations about such a scheme.
To deal with the pressing problems of cash flow, have the Government considered the British Hospitality Association recommendation that VAT should be deferred for three months for the worst-affected businesses in rural areas, such as hotels? If so, what action will be taken? Clearly, the business rate is a major fixed item of expenditure. The bills come in regardless of the collapse in trade, so is not it time that the Government considered offering business rate relief for a limited period to small rural businesses affected by the crisis? Has the Secretary of State considered that? If so, what action will be taken?
Has the Secretary of State considered the Federation of Small Businesses' suggestion that the Government might follow its example and make loans available to businesses affected by the crisis? I appreciate that it is not easy to define which tourism businesses, or businesses of any sort, should be eligible to benefit from such relief measures, but there is no reason to exclude everybody from help just because that is difficult.
As for the medium term, what proposals do the Government have for putting in place a recovery plan for the rural economy and rural tourism businesses? For example, what extra funds will be made available to the BTA to restore confidence in our main overseas tourism markets? A major marketing effort will be required to attract overseas tourists back to Britain, but, above all, people in rural Britain and in tourism businesses affected by this appalling crisis want action from the Government to deal with the situation.
I note that the Chancellor has revealed that the Government have underspent their budget this year by £1 billion. If this desperate crisis is not a reason to spend some of that money, I would like to know what is.
Mr. Smith: This is of course a time for addressing serious problems seriously and the majority of the hon. Gentleman's remarks were certainly in that spirit. May I tackle the main points? The first is the notion of establishing safe zones, which I did not speak about and which is not specifically on the agenda at present. My right hon. Friend the Minister of Agriculture is in charge of Government policy on the management of the disease and he will address the House tomorrow on precisely how the disease can be combated, particularly in those areas where no outbreaks have yet occurred.
On compensation through a variety of possible means that the hon. Gentleman suggested, those are matters that we shall wish to address in due course. Ultimately, it will be for my right hon. Friend the Chancellor to make decisions about them, but we shall consider seriously the impact that has been felt across the rural economy and how best to address that impact. The recovery plan for rural tourism matters for our overseas markets and, in particular, our domestic markets. We shall be in close discussion with the ETC and the BTA about how the best possible promotion of rural tourism can be put in place as soon as the outbreak is over.
Perhaps the most important message of all--I am pleased that the hon. Gentleman agrees--is that the countryside is indeed open for business. For example, South Hams district council in south Devon has just issued an extremely good notice to visitors, setting out clearly what they can and cannot do. Among the things that visitors can do are exploring towns, taking river boat trips, walking on beaches, visiting castles, abbeys, gardens and garden centres, looking around pottery centres, visiting the aquarium in Plymouth, playing golf, visiting local antique shops and art galleries and enjoying locally produced food and drink.