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5.32 p.m.

Lord Pendry rose to call attention to the place of tourism in the United Kingdom economy; and to move for Papers.

The noble Lord said: My Lords, I am pleased to have secured this debate as I believe that the tourism and hospitality industries are not given enough prominence in either this House or another place. I immediately declare an interest as chairman of the All-Party Parliamentary Tourism Group and, for five years, shadow Minister for Sport and Tourism.

Those of us who take an interest in tourism are well aware of its importance to the UK economy. Tourism in Britain is not often acknowledged as a huge contributor to the economy—to paraphrase a Select Committee report in another place it is a "sleeping giant"—but tourism is our fifth largest industry. In fact, tourism ranks fifth in every English region in the country and is much higher in Scotland and Wales. Worth 76 billion in 2002, tourism affects the lives, as we know, of every citizen. Over 2 million men and women work in tourism—more than 7 per cent of the working population—and the Treasury receives nearly 8 billion in tax every year from the sector. So it is clear that tourism plays a huge role in our national prosperity.

The past three years have seen a series of crises hit the sector. Foot and mouth and September 11th led to a massive loss to the sector of about 8 billion in 2001. Many businesses collapsed, despite the assistance provided by the Government. The first half of 2002 saw the beginnings of a recovery, but tourism is once again in trouble. I want to draw the attention of the House to the current situation—which is affected by the consumer-led economic slowdown and the situation in Iraq—and what should be done about it.

The British Chamber of Commerce quarterly economic survey showed a significant decline across the whole economy, particularly among small businesses—tourism is of course disproportionately made up of small businesses, more than 125,000 of them, from cafes to B&Bs and small attractions—and all this in the context of a slowdown in UK consumer expenditure and the Chancellor's lower economic growth estimate for this year, down to between 2 and 2.5 per cent.

This bad news has been reinforced by a sharp loss of confidence among tourism businesses. Surveys have shown that in the first quarter of 2002, 66 per cent of businesses were "more optimistic" about the future for

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the sector against only 5 per cent which were "less optimistic". By the last quarter, only 28 per cent were "more optimistic" and 44 per cent were "less optimistic". There are also some worrying signs of a decline in employment levels.

The build-up to the war in Iraq has of course been a major concern, affecting the willingness of people to travel generally and, in particular, to countries involved in the conflict. Together with the outbreak of the SARS virus and the advent of the ever-present global threat of terrorism we are seeing a decline in the willingness of people to travel across the world, which mitigates against growing inbound tourism—a vital contributor to wealth and jobs.

The latest visitor numbers for 2003 are robust for international visitors from Europe but potential travellers from long-haul markets were more subdued by the approach of war and visitor numbers are down. It is visitors from the US and other long-haul destinations who spend the most when they come here.

For UK residents holidaying within Britain, the fragility of consumer confidence has also seen a deterioration in tourism. The number of trips and overnight stays taken in England were up by only 2 per cent on 2001, the "low tide" year of foot and mouth and September 11th.

After the events of 2001, it was clear that the Government should review the public structures in place to support the tourism industry. Last year the Treasury contributed 20 million towards the extremely successful "Only in Britain, Only in 2002" campaign in key overseas markets. This was matched by 20 million from the industry. Longer term, the Government decided to merge the British Tourist Authority and the English Tourism Council into VisitBritain, a single lead national agency for tourism, which now has a domestic marketing responsibility for England. Campaigns within the UK, Europe and other key overseas markets are already in the pipeline.

The Government's moves are admirable. In Dr Kim Howells tourism has a real champion, as was his predecessor Janet Anderson, but we shall have to wait to see the long-term success in the future as the structures bed down. But the short-term situation caused by the Iraqi situation and a drop in consumer confidence demands action now. I am confident that the Government are monitoring the situation and are considering what assistance they can give to struggling tourism businesses. I look forward to hearing from the Government Front Bench what is the Government's current view.

I believe that there is a need to consider resurrecting the Government's policy towards PAYE and VAT holidays for tourism businesses. Flexibility in the payment of business rates, tax and national insurance contributions proved a lifeline during the foot and mouth outbreak. It could prevent the need to lay-off staff and thereby save many businesses at this tough time. Another taxation measure could be to make trips to Britain instantly cheaper by reducing or suspending air passenger duty for a specified length of time.

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Secondly, DCMS Ministers should consult with the Treasury over whether to put extra one-off resources from the reserves behind another large campaign this year along the lines of "Only in Britain, Only in 2002", together with industry match-funding.

Thirdly, the British Tourist Authority has faced a standstill budget for many years. Costs and wages have risen in line with inflation but not its grant-in-aid. Even worse, the budget for the English Tourism Council has been in severe decline. Both bodies performed successfully against their briefs. Now that the Government have merged them into VisitBritain it is surely time to update the grant-in-aid for the long term and correct this shortfall.

We all know that money alone does not necessarily deliver the right results without the necessary reforms, but the Government have now made the necessary reforms and we should see the investment that goes hand-in-hand with those reforms to achieve the results the country needs.

While appreciating the recent structure changes, marketing on its own is not enough. We need to ensure the industry has enough people with the right skills to deliver a quality product. We need better co-ordination between the various agencies and to establish a properly funded sector skills council for tourism, hospitality and leisure.

I believe the Labour Party has a good tourism record. After all, it was Labour that introduced the original Development of Tourism Act 1969, creating our national tourist boards. I was proud, as shadow Minister for Tourism, to draft Labour's first ever policy on tourism and hospitality, Breaking New Ground, before the 1997 election. Surely it is now time to revisit the 1969 Act. Devolution to Scotland and Wales and further tourism responsibilities moving to the English regional development agencies and possibly regional assemblies will mean that the realities of devolution, the existence of VisitBritain and the formation of an England marketing advisory board within VisitBritain are not reflected currently in legislation. The Government have pledged to update the legislation, parliamentary time permitting. My argument is that tourism should be high on the government agenda and the time should be found now. If the Government have belief in their reforms, they should put them on a statutory footing.

Our heritage, coastline, countryside and cities already attract much tourism activity but we should enable innovative local changes so that tourism links in with local community needs as well as those of the visitor. In my own area, the traditional fell-walking activities and Great Parks at the foot of the Pennines are supplemented by events such as the Tameside brass band festival, which includes the route of the revamped, cleaned, regenerated canalside in Stalybridge. As the local MP at the time, I was proud to play a part in bringing the local authority and the Millennium Commission together to provide the necessary funding for that development. As a result of the canal being restored, the inward investment into Stalybridge is to the tune of some 80 million. At the end of the

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Stalybridge town centre project, it is estimated that that will double within five years to approximately 160 million.

Synergies between tourism and the fields of sport, arts and culture surely make up a major key to success. I am on record in your Lordships' House encouraging the Government to back the Olympic bid for London for 2012, as the potential rewards for the whole economy are huge and the benefits will spread across the country. I look towards Barcelona and Sydney as shining examples of what could be achieved here.

The Government's introduction of free entry to national museums and galleries is a fundamental step towards improving access, although we should look at steps to assist other independent museums, galleries and attractions, especially those in the regions. Could the Government consider extending the VAT recovery scheme to all museums and galleries? Could the National Lottery Commission be encouraged to target funding towards tourism-related projects? I look forward to hearing the Government's view on that.

I now wish to turn to the need for government support for our seaside resorts. Speaking as one who was brought up in the seaside resorts of Broadstairs and Ramsgate, I have a certain affinity with those who argue the case for the restoration of our resorts. I would like the Minister to promise to convey to the Secretary of State the need to read a report about to be published by Sheffield Hallam University which smashes many of the myths surrounding the state of many of our resorts.

For instance, the study examined 43 principal resorts. Combined, these resorts have an adult population of working age of 2.9 million, which compares with a figure of 3.2 million for the whole of Wales. Between 1917 and 2001, the number of people employed within these resorts actually increased by some 217,000.

So where does this leave the traditional seaside resort? Well, it still leaves them with many difficult social and economic issues to face, often of a similar nature to those experienced in inner-city areas. On the positive side, it leaves them with a new understanding that tourism is not the root cause of their difficulty, but actually a major part of the potential solution. It leaves the Government with a better reason and a much stronger justification for their continued keen interest in seaside resort tourism. It also gives much greater incentive to encourage RDAs and other key bodies to invest in resorts' general infrastructure and now, critically, directly into tourism-related projects.

Previously, it has been very difficult to justify an enthusiasm for resort tourism when the perceived wisdom suggested that it was a failing industry. If, as I understand to be the case, the Sheffield Hallam report shows clear evidence that resort tourism is alive and well and capable of more growth, it should be much easier to identify specific methods of tackling the social and economic problems, while in parallel working to stimulate more tourism growth to improve the economy for the benefit of all residents and visitors alike.

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Britain has some of the greatest tourism assets in the world. Through regeneration, an improved transport infrastructure, and working in partnership across a range of fields, we can ensure that UK residents visit and enjoy more of their own country, and that international visitors want to return. Only when government can draw together industry, regional agencies and local authorities can we ensure that Britain gets its fair share of the economic benefits of a successful, sustainable tourism sector that can compete with the rest of the world. I beg to move for Papers.

5.46 p.m.

Lord Montagu of Beaulieu: My Lords, first I must declare my interest and involvement in tourism. Since I made my first speech on tourism some 50 years ago, it is more or less a question of confirming it.

The whole House will be very grateful to the noble Lord, Lord Pendry, for raising this important subject this afternoon. Before he was elevated to this House, he was very active in another place and has always been a great friend and supporter of tourism.

What is rather depressing in re-reading these old debates over the years is finding the same old problems being brought to the attention of successive governments by speakers from all parties in the House. It is very easy for us to say, "We told you so", as, over the years, there has been a complete failure by successive governments to invest in tourism. Instead, they have—mistakenly, I think—concentrated on altering and interfering with structures. For instance, as far as England is concerned, first we had the English Tourist Board, with its relevant powers, then we had the English Tourism Council, with no powers, and now we have another body called VisitBritain, which apparently has some resources to market England. What was wrong in recent years was the presumption, which was quite wrong, that the regions would together be able to market England competently, even though they are all in competition with each other, leading to a fragmentation of efforts.

It took an apparently unrelated crisis, foot and mouth disease, to reveal the true value of tourism to Britain and the inability of the then tourist agencies to react positively as they had neither the staff, the experience nor the resources to carry out the necessary marketing, so money had to be rushed from the Treasury for these purposes.

The benefits of tourism are felt at all levels of the economy. Tourism is worth four times as much as agriculture and sustains four times as many jobs. It generates more than 15 times as much tax to the Exchequer, yet successive governments' recognition of tourism has been limited and very short lived.

While the creation of the new marketing body for England is generally welcomed, the additional funds made available of 10 million over three years are just not enough. The RDAs are indeed providing some additional funds at the regional level, but at the same time, resources to the centre have been cut, and

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England no longer has a fully competent national tourism body. Successive Select Committees have identified governments' substantial under-investment in tourism.

Now we are in a period when the financial outlook for Britain is worsening. The Chancellor of the Exchequer has reduced all his expectations. Authoritative and independent analysis expects that the position could become very much worse in the future. Britain needs to make use of every opportunity to invest more and help boost the economy. Tourism is one of the few industries capable of making a massive contribution, but for the past decade we have been losing out, with the net positive balance of payment on the tourism account declining in 2002 to a negative balance of 15 billion. The situation could even get worse, but that is not inevitable; the deterioration could be reversed.

The BTA has proved the value of investing in the ability and experience of attracting tourists to Britain against the ever-strengthening competition of other countries. For every 1 that the BTA is able to spend promoting Britain, an additional return of 28 is earned. How can that opportunity be repeatedly ignored?

After foot and mouth disease and the impact of September 11th, the Government responded with additional funding. Now, with the Iraq war and SARS impacting on our tourist industry, typically it has been announced that no additional funding from Government is planned. Tourism has always been vulnerable to major disruptions, and the cost to our industry and to jobs can be enormous. We need an early commitment from the Government to be prepared to provide a long-term investment to help Britain to improve the tourism infrastructure and win its share of demand against ever-growing competition from other nations. More than ever before, we cannot afford to neglect our tourism potential. We do so at our peril.

5.51 p.m.

Lord McNally: My Lords, when I joined this House seven years ago, one of the earliest debates in which I participated was on tourism. In that debate, I also followed the noble Lord, Lord Montagu of Beaulieu, with some sense of awe, since his name is associated with one of our most successful tourist enterprises. Indeed, I pointed out at that time that he and I occupy almost diametric opposites of the tourist experience in that he was one of the pioneers of saving our stately homes heritage through tourism. My experience was of selling coffee on top of Blackpool Tower. The highlight of that experience was an article in the local newspaper with the headline "Tower Top Tommy"—one of the more favourable pieces ever written about me.

My Blackpool background meant that I never treated tourism as a second-rate industry. I was brought up with the knowledge and appreciation of the jobs and the wealth that tourism created. It also left me with the conviction that there is a difference between service and servility. Being in service industries is in no way demeaning; indeed, one of the great satisfactions, as

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any good chef will say, is being able to provide good high-quality service to a satisfied customer. That is one of the things we need to encourage. We must get rid of for ever the concept of "rip-off Britain". It will take the efforts of everyone involved to ensure that what people get when they come to Britain for their holidays is of the highest value and quality.

The problem is that tourism has been something of a Whitehall orphan. It has been bounced around various Whitehall departments and has always been a subsection of a junior Minister's responsibility. Although the approval expressed by the noble Lord, Lord Pendry, is, I am sure, appreciated, I remain unsure whether Kim Howells wants to be tourist Minister or art critic. That is part of the difficulty.

When one listens to the noble Lord, Lord Pendry, one is always tempted to say that he was the best tourist Minister we never had. Certainly, the work he did in opposition on tourism and hospitality was a document that cut across party dogmas in giving a blueprint and a way forward for the tourist industry. In his opening remarks, he rightly highlighted the trials and tribulations that the tourist industry has gone through in the past few years. It is not treating the situation frivolously to suggest that it is almost like watching "The Perils of Pauline" in that there has been 9/11, foot and mouth, various acts of international terrorism and recent wars. The industry has been buffeted, buffeted and buffeted again. Now there is the possibility of an economic slowdown influencing it further.

But there is an opportunity in this challenge. We may see, perhaps only for a short time, a change in tourist patterns. The exotic holidays, which were becoming increasingly attractive to British tourists, may seem less so in a rather more dangerous world. This represents a real opportunity for the British tourism industry to sell its benefits to the British people. The more exotic holidays may also be less tempting to some of the foreign tourist markets, and we may also attract them. Most importantly, the British tourist industry and the relevant agencies should use this year to attract British tourists back to holidaying in Britain.

I have done some pioneering myself. I have a young family: a 7 year-old, a 9 year-old and a 12 year-old. Without being too pious, I decided some time ago that part of their education should be to discover their own country as well as having the opportunity for foreign travel. In recent times we have been to Torquay, Weymouth, the Gower, Blackpool and the Lakes. Going to Blackpool was of course an essential part of their cultural development. They enjoyed the Tower Circus and the Pleasure Beach, as I did 40 years ago.

In those visits, as the noble Lord, Lord Pendry, said about the Sheffield Hallam study, I found that the state of British tourism—especially of our seaside resorts—is nowhere near as decrepit as some of the publicity suggests. There are really good family holidays, with good entertainment, at our leading resorts. To visit the Gower or the Lakes, or to do, as we did, and take the road from the Lakes to Leeds

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through the Yorkshire Dales National Park to join the M1 gives one a breathtaking realisation of our national heritage.

I pay tribute to the management of our national parks. I was extremely impressed by the signage and facilities, which make a visit to a national park such an added pleasure for a townie like me. One can judge which directions to take. There is plenty of help available; there are many facilities. So that side of tourism is there and waiting for the British people. However, leadership is required if people are to take advantage of the opportunities. As the noble Lord, Lord Pendry, indicated, funding will also be necessary. We need a sense of urgency if we are to capture that opportunity.

Not only the holiday areas can benefit; opportunities exist also for the larger cities. The message is coming home to cities that tourism is important, and they are responding. Just over 10 years ago, I did a study for the Mersey Enterprise Board about the type of things that attracted people to Merseyside. It was amazing to learn what a strong selling point Merseyside's artistic, cultural and sporting assets were in attracting tourists. As anyone who has gone to Manchester, Liverpool or Birmingham will know, the combination of cultural and other assets makes a city visit extremely worthwhile. The competition for designation as City of Culture has demonstrated how one asset can be balanced against another and the sense of community that is delivered. As for sports tourism, the Manchester Commonwealth Games have left a lasting legacy which will boost that city's tourism. I therefore strongly endorse what the noble Lord, Lord Pendry, said about going with vigour for the Olympics.

I realise that tourism has some severe problems. However, from my recent visits to tourist areas around England and Wales I know what those areas have to offer and the quality of which British tourism is capable. That potential really does deserve a response from government and government agencies. During these times of international uncertainty, we should grasp that potential gap in the market. Having attracted Britons back to Britain this year, the tourist industry at every level should also ensure that, because of the quality of what they experienced, people are determined to come back again and again.

6.3 p.m.

The Lord Bishop of London: My Lords, I, too, wish to address that issue of quality. I welcome this debate on the place of tourism in the British economy and am grateful for the opportunity. I should, however, declare an interest as chairman of the Cathedrals and Churches division of the Church of England.

Noble Lords will be aware that, in the beginning, mass tourism and religion were partners. Thomas Cook was, of course, a notable Baptist temperance campaigner. The very first package tour that he organised was an 11-mile rail journey from Leicester to attend a sober rally in Loughborough. An inclusive price was charged for both food and transport, and so mass package tourism was born.

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The partnership between religion and tourism is not only an historic theme; it is a very contemporary theme as well. Religious buildings of all kinds in our country are not only magnets which draw tourists and their money to major heritage sites such as neighbouring Westminster Abbey or York Minster; they also divert tourists into the depth of the countryside, perhaps with Mr Simon Jenkins' guide to the Thousand Best Churches in hand. Religious buildings can even draw people to very unfashionable parts indeed. There is a trickle of tourists to the church of St John's Hoxton—which, with English Heritage, we have recently restored, including a marvellous painted and rather genteel Church of England Apocalypse overhead. It has attracted quite a stream of tourists to Hoxton, which is not the usual sort of venue that comes to mind.

So religious buildings such as the spectacular Hindu temple in Neasden attract millions of visits each year. I wonder how many tourists would miss the pleasures of visiting Wells, for example, if the cathedral there did not act as a magnet. As we heard, such attractions bring great economic advantages to the areas in which they are set. They also contribute powerfully, and incidentally, to a deeper sense of local identity, not least for the newer British communities.

However, that comes at a cost to those responsible for the upkeep of tourist magnets and attractions. The steep rise in visitor numbers which we have experienced in the past 30 years has also seen an increase, quite rightly, in the legislation covering the care of visitors, especially the care of children and—remembering the previous debate—the care of those afflicted by disabilities, and the accessibility of attractions to them. At the same time, stricter regulation aimed at conserving our tourist attractions has resulted in an increase in the cost of maintaining them.

Of the million or so visitors who come to Canterbury each year, many are French or German. They assume, of course, that the Government bear the cost of maintaining such an important and attractive part of the heritage of the whole community and not just one faith community. Such visitors are often astonished to discover that what they take for granted in their own country is not true in Britain, where thousands of volunteers—and we are not whingeing about this; we are proud of it—connected to all the faith communities of the country do the work and raise the money that is a charge on public funds in nearly every other European country.

Canterbury Cathedral, for example, has never received an English Heritage grant. However, if you have a million visitors a year, the building needs to be presented and preserved—we have heard the accent on quality and a memorable experience—in a way that offers the tourist a welcome, an experience and, if required, an education. Even visitors from Great Britain—currently increasing in numbers for the reasons we have heard—assume that the 3.50 charge to visitors at Canterbury is just netting a little money on the side for the cathedral over and above what it receives from a generous public purse. That is how

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they perceive it. Such charges are in consequence often resented and comparisons are drawn with the free entry policy at museums and galleries.

Yet—and this is the crucial point for this debate—the money from visitors at such a place is not used to keep the services going or even to keep the building standing. In Canterbury's case, it is used chiefly to provide the facilities to cope with the demands of mass tourism, to care for the visitors and keep them secure and to make good the wear and tear of a million pairs of feet.

In a country such as ours of voluntary religious communities, it is the business of each faith community to finance the religious purposes of its shrines. In the case of the Church of England cathedrals, their primary purpose is defined by legislation as being centres of worship and mission. No one is asking for any kind of state subsidy for such activities. However, it is important to all those who care for quality in our provision for the tourists at home and abroad, and extremely important for all those involved in tourism—we have heard again and again the statistics which illustrate the sector's importance to the economy and the employment it provides—that heritage sites should be properly resourced to offer a memorable experience to very numerous and very diverse visitors.

English Heritage has a modest annual budget of 2 million for its Cathedral Repairs Grants Scheme. It seems to me that the larger sums available to promote tourism and sustain attractions must be viewed with a strong assumption that there must be an argument for considering the eligibility of clearly defined aspects of visitor welcome and presentation. Those aspects of spiritual heritage attractions should be considered on a similar footing to some museums and galleries as beneficiaries of those programmes.

So, while welcoming the debate, I hope very much that it can help us to see certain aspects of the challenge of maintaining such a significant part of our communities' inheritance in a new and possibly constructive way.

6.10 p.m.

Baroness Dean of Thornton-le-Fylde: My Lords, I congratulate my noble friend Lord Pendry on initiating the debate. I congratulate him especially on calling attention to the importance of tourism to the United Kingdom economy.

Tourism certainly makes an important contribution to the United Kingdom economy. It fosters growth in the building industry, the motor industry and the aircraft industry. Many industries get a spin-off from tourism. But putting that on one side, as has been said, our tourist industry was worth over 70 billion in 2002. However, the figure will be less this year. Some 2.1 million people are directly employed in tourism and 127,000 businesses are involved in it, 80 per cent of which have an income not exceeding a quarter of a million pounds a year. The latter point is probably one reason that tourism and the economy do not necessarily go hand in hand in the public's perception.

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Britain is good at tourism. We have the fifth largest tourist industry in the world. Yet it does not have the high profile that many of our other industries have. Perhaps the onset of foot and mouth started to make the public realise the impact that such events have on the lives of people in rural communities who are involved in tourism. Certainly, those who were not convinced that the foot and mouth epidemic had a negative impact on the tourist industry must have been convinced that the tragic events of 11th September had a negative impact. Then the war with Iraq broke out and now there is the problem of SARS. I cannot think of any other industry that has suffered four such consecutive crises. The tourist industry must be reeling and wondering what is coming next.

The tourist industry is going through a tough period. We can see that in this great capital city of ours. Last night I went to a West End theatre that was half full. The other day I got into a taxi and the driver told me that I was the first fare he had had for an hour. I said that I thought my fare would be only about 3.50 but the driver said that it was better than nothing. Those involved in the tourist industry are under economic pressure. Hotel occupancy rates are well down.

The campaign to encourage people to visit Britain is certainly very important. A fall of 15 per cent in visitor numbers is anticipated compared with last year. ABTA says that bookings are down by 16 per cent. Although ABTA tour operators deal mainly with outbound tourism, they employ 133,000 people here in Britain. Certainly, the decline that they face may well result in job losses in a sector where I gather the average net profit is just over 1 per cent. So they do not have much of a margin to play with.

Some 2 million people work in the tourist industry and, as I said, last year the tourist industry was worth over 70 billion. I compare that sector with the industrial sector. Yesterday headlines in the press announced the 1,100 redundancies—that is an approximate figure—at Corus. The media gave that matter huge coverage. The tourism industry is four times the size of the agriculture and farming sector in the UK with four times the number of employees. About a third of a million people work in the farming industry. Yet at no time during the foot and mouth crisis did the media give much coverage to the impact of the crisis on the tourist industry and on people's jobs in that industry. As my noble friend Lord Pendry said, the VAT and pay-as-you-earn holiday that was granted at that time was a lifeline. As he said, perhaps we should consider doing that again.

It is generally recognised that the tourist industry is having a tough time. It is one of our new industries. It has grown and has to some extent taken the place of our former great manufacturing industries in terms of the number of people it employs. I refer in that regard to the shipbuilding industry, the steel industry and the coal mining industry. Tourism is an industry with a large economic involvement in our communities. Although it appears glamorous, it is a terribly important part of our economy.

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The industry will bounce back; I do not think that there is any doubt about that. After the Gulf War the industry recovered very quickly. It was starting to make a strong recovery after the foot and mouth epidemic when the events of September 11th occurred. It seems that each time the industry recovers, something else has come along in the past two years to knock it back.

The industry needs nurturing. I do not think that it is whingeing or pleading poverty. However, it is an important sector of the UK economy. The noble Lord, Lord McNally, was right to refer to ABTA. At the moment 10 per cent of its work is within the domestic holiday market. Some 61 per cent of its members have said that they will invest more in the domestic holiday market. In Germany, for example, domestic holidays account for half of travel agents' business. Their overseas business probably mainly involves holidays in Spain.

Should an industry that is so important to our economy have its own Minister? My noble friend Lord Davies of Oldham will say that tourism has its own Minister, Kim Howells. The industry considers that he is a very good Minister. However, when the tourist industry—which employs 2 million people—is in crisis, it is not helpful for Kim Howells to devote day after day to the Ofcom Bill. As I say, Kim Howells is a very good Minister but this very important industry would gain a higher priority in his portfolio if he was able to devote more time to it.

There is a strong case for bringing the tourist industry under the remit of the DTI. I should be surprised to hear my noble friend Lord Davies of Oldham agree with that point. However, one could argue that tourism is an economic rather than a heritage matter. That point should be considered.

I hope that the industry will enjoy a period of stability to enable it to recover. My noble friend Lord Pendry mentioned the sum of 20 million that was allocated last year to promote the tourist industry. That was very helpful indeed. Last year the Prime Minister appeared in an advertisement to promote Britain. After the events in Iraq he probably has Beckham cult status in the United States! I hope that the Prime Minister will take a lead in promoting this country in advertising. We need to get back international visitors.

The infrastructure of the industry is also important. I declare an interest in that I chair the Freedom to Fly Coalition. That body tries to ensure that we have the aviation and infrastructure capacity to meet customer needs in the UK over the next 30 years. Two thirds of our visitors arrive by air. On the Continent air travel is recognised as an important part of the economy. Amsterdam Airport has expanded and has the potential to have six runways, although it does not have six at the moment. Charles de Gaulle Airport has expanded its capacity, as has Frankfurt Airport. Heathrow is no longer the No. 1 airport in Europe. It serves fewer destinations now than some of our European competitors. Our competitors are investing

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in new infrastructure as they want to attract this important industry. Our rail infrastructure is also very important in this regard.

Like anything else, the industry is terribly competitive. It is also price-sensitive. It has recently carried out some work comparing itself with Europe on taxation. One example that it took was an American family of four coming to Britain. Tax accounted in the UK for 18 per cent of their spend, whereas in Europe the average was 12 per cent. One could say that, in the UK, the tax taken from the spend was 50 per cent more than the average taken in Europe. That could be looked at, certainly so that no more tax is put on an already heavily burdened industry.

The debate is important to our economy and to jobs. At the moment the industry is seriously challenged, but it will come back. If we look at all the statistics, we can see that it will be buoyant. We have to do what we can to nurse it along, to make sure that it is ready to face its challenges and to take the opportunities raised by the noble Lord, Lord McNally, in trying to develop the domestic holiday industry.

6.21 p.m.

Lord Patten: My Lords, I listened with interest and respect to the noble Lord, Lord Pendry, this afternoon, as I did over the years on many afternoons and evenings and, once or twice, during the now-vanished all-night sittings in those more heroic days when men were men down the corridor in another place and before we all became politically correct. Alas, I cannot wholeheartedly agree with his optimism of "A little more tourism, with a little more government help and intervention, will cure most economic ills", even though I greatly welcome the chance that he has given us in an excellent speech to debate the issues. I wish to concentrate on tourism in rural areas.

I do not believe—I am so far the only dissenting voice—that tourism is some universal good. Sometimes at worst it encourages the "theme-parking" of Britain, and even the de facto destruction of that which tourists travel so far to go and see. Most of us enjoy going to look at something. However, sometimes the urge to become a tourist seems to be found in our growing national condition of rootlessness—the sense that the only way to enjoy the earth and the United Kingdom truly is to travel to places where one is not.

Much of that rootlessness and dissatisfaction with where we are is because of the prior destruction of so many of our towns and cities, and their social, economic and built fabric, in post-war years. I applaud very much the thoughtful approach of the noble Lord, Lord Rogers of Riverside, and other noble Lords who wish to make urban life more desirable again—to make people wish to root themselves and recreate more at home, as people lucky enough to live in the country often do.

After all, visitors to homes and houses, whether in town and city or the country, are often struck not only by the beauty of the architecture or the interior, but by

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the lingering sense to be found inside some such places of a calm that radiates from the making of a home by families and people who stayed put in the town and the countryside. One side of the coin of the generation of tourism is the fact that that cannot always easily be found by those who live in crowded urban conditions whom we have not served well since 1945.

I intend to concentrate on rural areas, however, where local people do not think all the time that tourism is some blessing. Tourism can bring pollution, traffic congestion, overcrowding, and sometimes downright environmental damage. The income generated by tourists all too often does not stay in the local area but is siphoned off to other areas, so local people are not benefited.

The countryside and those interested in rural tourism do not need more quangos, statist intervention, policies, campaigns, subsidies, or the invaluable ministerial time of Dr Kim Howells. I listened with great interest to the suggestion of the noble Baroness, Lady Dean of Thornton-le-Fylde, that the responsibility might be moved to the Department of Trade and Industry with its seven Ministers; that department is itself a sort of job-creation industry for Ministers. One of those Ministers could take on the responsibility if she feels that ministerial responsibility is not being exercised properly.

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