Previous Section Back to Table of Contents Lords Hansard Home Page

3.12 pm

Lord Davies of Coity: My Lords, I, too, am grateful to my noble friend Lord Pendry for initiating this debate on tourism. This framework review on British tourism has, as has already been mentioned, information and statistics greater than I can possibly express in this debate, but I recommend it as a reading for your Lordships. As we should all be aware, tourism is vital to the economy of the United Kingdom. Last year, spending by overseas visitors was estimated to be more than £16 billion, which came from the 32 million people who visited this country. With the decline of the value of the pound, Britain is likely to remain a major tourist destination even during the recession.

14 May 2009 : Column 1164

This year, domestic tourism is also likely to grow. More and more, the evidence is that Britons will turn away from expensive foreign holidays and will look to holidaying at home. A recent survey by VisitEngland found that 21 per cent of people who went on holiday abroad in 2008 would consider looking to the United Kingdom for a break in 2009 to save money. This is a golden opportunity for the domestic British tourist industry. As we know, the whole economy benefits from a successful tourist industry. It benefits the local and national transport operators as most tourists do not take or use their own transport when on holiday. It benefits the local food manufacturers who produce goods that are either sold in the locality or used directly by hotels and restaurants in the tourist areas. It also benefits the distribution companies, which transport the goods and services needed in the various tourist locations up and down the country.

Retailing in particular is both a major beneficiary of tourism and vital to its success, whether it is food or non-food items for self-catering holidays, or simply a whole variety of things associated with being on holiday. One thing is certain: when people are on holiday, they spend a lot of money in the local shops. It is estimated at 15 per cent of the total holiday spend. In fact, the whole shopping experience is often an integral part of the overall holiday itself. Retail and tourism are clearly closely linked, and it is true to say that, without a vibrant retail sector underpinning it, the tourist destination could fail.

Tourism is also a major source of employment. Directly, as has been said, it employs around 1.5 million people. When one adds on those jobs indirectly linked to tourism, such as shop staff, the figure is considerably more. This is almost 10 per cent of all people in employment, and it is growing in a developing sector.

Look at how it has changed in our lifetime. Not only have the standard and variety of accommodation greatly improved, but there have been many other developments. We have seen the arrival of large theme parks such as Alton Towers, which has become one of the best theme parks in the world. With an international reputation, it has become a must-visit attraction for young, domestic and overseas tourists.

We have seen museums changed beyond all recognition, with many becoming hands-on attractions, with lots to do and explore. Many innovative ideas have been developed and come into practice, such as Legoland. Whole parts of run-down cities have been transformed to reflect the display and heritage of the city itself, such as the Albert Dock development in Liverpool, with its museums, shops and other attractions.

However, there still remains great potential for the tourist sector. As technology develops, new things will be possible that we are unaware of today. In the mean time, we have a tourist opportunity just around the corner. I am, of course, referring to the Olympic Games, to be held in London in 2012. It is a chance to show the world the attractions not just of London, but of the whole of the United Kingdom as well. The Olympic Games could be a massive boost to the UK tourist industry and the economy itself; if successfully sold, they could bring benefits for years to come.

14 May 2009 : Column 1165

Tourism is vital for this country. It is a major employer; it boosts many sectors of the economy. Therefore, it is an industry that we should do all that we can to support and advance for the benefit of the whole of the economy. As I live in the north west, I trust that I will have the indulgence of your Lordships to be somewhat parochial in drawing attention to Manchester’s contribution to tourism.

Tourism continues to play a vital role in the success of the Manchester city region. The latest industry figures have revealed that it generated £5.6 billion for the Greater Manchester economy in 2007. The Office for National Statistics has confirmed that during the same period, Manchester remained the third most popular destination in the United Kingdom with 971,000 international visitors, a growth of 6 per cent on the previous year. The significant investment made in Manchester airport has played a key role in this success, and together with the North West Regional Development Agency, the Association of Greater Manchester Authorities, and strong private sector partnerships nurtured over the past 10 years, Manchester is now well placed to improve its position.

Manchester can make a strong cultural offering. The second Manchester Festival takes place this summer and the city is building on its strong sporting tradition. It was home to the very successful Great Britain cycling team at last year’s Beijing Olympics. Manchester United and Manchester City football teams feature strongly in what the city region has to offer, and the city has built a world-class sporting events programme which covers events from the UEFA cup final, the FINA world short course swimming championships and the UCI world track cycling championships.

Finally, I hope that the Government will take what has been expressed in this debate into serious consideration. As president of the Manchester East County Scout Council, I have a long-standing commitment early this evening in the north-west, and therefore I hope your Lordships will forgive me for not remaining until the end of this debate. But I will read Hansard thoroughly on Monday.

3.21 pm

Viscount Montgomery of Alamein: My Lords, it is a pleasure to follow the noble Lord, Lord Davies, and I agree that it is a good idea to promote the north-west. This has been a wide-ranging debate and our general thanks are due to the noble Lord, Lord Pendry, for introducing it so comprehensively. As he pointed out, tourism is a vast industry generating great economic activity and much needed foreign exchange. It is very labour intensive and requires large long-term investment, especially in hotels.

We are all dependent to a certain extent—I know that I am—on the good information produced by the British Hospitality Association, which represents the entire hospitality industry and produces excellent background material. I have spoken in many tourism debates, including one held this time last year, but unfortunately not in the one in January that several noble Lords mentioned. I agree entirely with other speakers that the Government have done very little for tourism recently. This is especially curious in the current

14 May 2009 : Column 1166

economic situation, as the Prime Minister is always talking about spending our way out of recession. For example, the hotel industry has invested £25 billion over the past five years, but last year the Government abolished the hotel building allowance and many other capital allowances. That seems to be rather a contradiction.

In the shorter term, as other noble Lords have asked, why has there been no encouragement for people, both domestically and internationally, to spend their holidays in the UK in view of the pound’s weakness against both the dollar and the euro? The noble Lord, Lord Pendry, mentioned a good example from several years ago. The Government invested a small amount of money which in a year generated 1 million tourists who spent over £500 million.

However, another example of muddled thinking is the fact that the reduction of VAT to 15 per cent coincided with an increase in excise duty on beer, which meant that the counter price in public houses was completely unaffected but the administrative burden vastly increased. Whenever I can, I take the opportunity to spend time walking in the countryside. In the middle of the walk, I often stop at a pub, which is usually run by a small team, frequently a husband and wife. The result of the Government’s policy, as we have seen in the press, has been frequent closures of what are in fact social gathering centres for local communities. A great deal needs to be done.

Another strong recommendation from the BHA is to introduce daylight savings, which it suggests would increase tourism and leisure expenditure by £3.5 billion per year as well as impacting on road safety and CO2 emissions. This has been suggested many times in this House—Bills have been introduced and I have spoken on it a huge number of times—but the Government have always ducked it.

Generally, as other noble Lords have said, we need to reduce bureaucratic expenditure and the very numerous bureaucratic rules and get people back into productive work. Restaurants and hospitality present a huge job-creating opportunity. The Government should pay more attention to this and to the excellent and regular reports and recommendations of the BHA.

3.25 pm

Lord Rosser: My Lords, I thank my noble friend Lord Pendry for initiating this debate. As we have heard, the number of people deemed to be employed in the tourism industry depends on what activities are considered to be part of the industry, which is why figures quoted often differ considerably. The Culture, Media and Sport Select Committee in the other place said in its report last year that the tourism industry employed between 1.4 million and 2.1 million people in the UK, depending on what was recognised as falling within the scope of the sector. According to the Select Committee, there is a lack of adequate data about the tourism sector on which to base strategic and management decisions, although some progress is being made to improve the situation.

For the most part, the industry is not well paid, except for those at the top end. Seasonal labour and part-time working are key features. Its employees will be among those who have benefited most from the

14 May 2009 : Column 1167

introduction of the minimum wage and they will also benefit from the recent change in relation to tips. Labour turnover is 30 per cent and costs the sector, it is estimated, nearly £900 million a year.

One would like to think that a key priority for the industry as a whole is to find ways of improving levels of remuneration and creating better pay and career structures, although I accept that that is a more difficult change to make for a labour-intensive industry than for one where labour costs are less significant. Around 60 per cent of the workforce in the hospitality sector nationwide is from overseas; in London, the figure is around 80 per cent. I hope that a further priority in this sector will be to take steps to encourage the locally unemployed to take up positions in the sector as they arise.

Tourism is an industry that has seen considerable change in recent years in some areas, with the consolidation of smaller organisations into major tour companies directly offering the full range of tourism services: bookings, tours, hotels, airline services, foreign exchange and coaches. Most organisations in the tourism sector in the UK, however, are small and medium-sized businesses. Obviously this has its upsides, but a downside appears to be that very few small businesses, which account for 45 per cent of the industry’s workforce, access the funding that is available to them for developing staff skills. This is significant, since the UK is still perceived to offer poor levels of service and not to be very welcoming. Language can be a barrier and as a nation we do not put great emphasis on learning other languages, which may be affecting us adversely in the field of tourism.

There has been little growth over the past 10 years in the domestic tourism sector—tourism within the UK—which accounts for 80 per cent of the value of the industry. Inbound tourism into the UK from overseas accounts for the remaining 20 per cent. In inbound tourism, the UK, despite growth between 2004 and 2006, has underperformed in comparison to the world average and it is projected that the UK’s global share of this highly competitive market will continue to fall, although the recent decline in the value of the pound against other currencies may affect the situation.

As noble Lords have said, last year there were 32 million visits to the UK by overseas residents, who spent nearly £16.5 billion, while UK residents made nearly 69 million trips abroad, spending £36.6 billion. Calculations from a survey suggest that, over the last 10 years, expenditure by UK citizens visiting other countries has risen in percentage terms three times more than expenditure by overseas residents visiting the UK. Although there were 32 million visits to the UK by residents from overseas last year, this was a 2.3 per cent decrease from the previous year, with the decrease being greatest in the last quarter of 2008. It is forecast that inbound tourism will fall by 0.7 per cent this year, although, as has been commented, there is evidence from surveys and company bookings that more UK citizens may choose to holiday in this country in 2009.

The Government have done a great deal over the past decade to encourage visitors to come to Britain, through VisitBritain and the regional development

14 May 2009 : Column 1168

agencies, through support for arts and culture and our heritage, through investment in the Olympics and Paralympic Games, through free museums, through improving skills within the tourism and hospitality sector and through investment in our tourism infrastructure and the product on offer to visitors. Public sector funding of tourism stands at about £350 million channelled through a variety of organisations and there is further investment of £500 million a year in improving the industry’s skills base. This represents a level of public sector investment in the industry substantially higher than it was in 1997.

Although I do not have any figures, simply travelling around this country makes one aware of the increase in the number of tourist attractions and venues compared with even a few years ago. The tourism industry represents value for money for the country as a whole. Not only is it a major employer but there is evidence that money spent by VisitBritain on promoting and marketing Britain to potential visitors from abroad brings considerable extra income into the country. VisitBritain has exceeded its return-on-investment target of a ratio of 30:1, set by DCMS in the 2007 Comprehensive Spending Review, which indicates that money spent on marketing our country provides a real benefit to the UK economy for a relatively low cost.

Most visitors to the UK come from Europe and the United States. However, we also need to look to the future and the fact that, as the economies of countries such as Brazil, India, Russia and China grow and expand and their citizens’ standard of living rises, an increasing number of those citizens will be in a position financially to travel abroad. We need to ensure that we are providing the resources to tap into that potentially very large market for new visitors to the UK, including ensuring that the cost of obtaining a visa to visit the UK does not act as a deterrent compared with our competitor countries.

We also need to ensure, particularly at present, that the necessary resources are being provided to extol the virtues and attractions of the UK to our own citizens to encourage more of them to take holidays and short breaks in this country rather than abroad. That would be a further way in which the tourism industry can deliver for the economy at this difficult time, bearing in mind the gap between the amount of money spent by overseas visitors to the UK and that spent by UK citizens travelling abroad.

I hope that, when my noble friend the Minister responds, he will be able to say how the Government intend to assist the tourism sector to develop still further, building on the already substantially increased investment over the last dozen years. The sector has much to offer the economy of this country in terms of both jobs and income. With tourism around the world set to increase, we need to ensure that we are geared towards attracting a significant share of this expanding market to the United Kingdom as well as encouraging growth in tourism within the UK.

3.33 pm

Baroness Valentine: My Lords, I thank the noble Lord, Lord Pendry, for securing this debate. I declare my interest as chief executive of London First, a

14 May 2009 : Column 1169

non-profit-making business membership organisation that seeks to ensure that London can compete successfully with other world cities on exports, tourism and inward investment and so continue to generate substantial economic benefits for the whole of the UK.

I join previous speakers in calling the Government’s attention to the importance of tourism to our economy. It supports something like 2.5 million jobs in Britain; certainly in London the leisure, retail and hospitality sector accounts for one in five private-sector jobs, and, in our current economic circumstances, jobs matter. Tourism is one of the few economic sectors to have held up remarkably well this year in the face of the recession which is biting into so many other industries. London, for example, continues to attract more visitors annually than Paris and New York combined. With the pound’s exchange rate at historic lows against both the dollar and the euro, there has never been a better time for overseas tourists to get excellent value for money from their visit to the UK. However, to get full advantage for our economy while the pound remains so competitive, we need to get the message that the UK is now surprisingly affordable to a much wider audience of people across the world, and as quickly as possible.

As other noble Lords have suggested, experience has shown that investing in tourism marketing in this environment generates a return of at least £15 in visitor spending in the UK for every £1 we spend on promotion. So I am delighted that the Mayor of London, in co-operation with a number of boroughs, has seized the opportunity and committed £2.5 million to the Only in London tourism campaign. I am also encouraged by the tremendous response from London’s consumer-facing businesses, with innovative deals, eye-catching PR and real investment in their product, many of them linking to the Only in London theme. My personal favourite project, the revitalisation of Marble Arch, will only add to London's attractiveness for visitors and locals, thanks to the efforts of Westminster Council's leader.

However, we could do so much more to reinforce success. London First, together with other major business organisations, has written to the Secretary of State, calling for the Department for Culture, Media and Sport to provide further investment of relatively small sums—for government—in this campaign. I am speaking only of a few millions in this context, not the billions that we have come to see as a normal financial measure in our discussions about the problems of the financial services sector. Surely a few millions committed with a return of 15:1 for the economy is money well spent on taxpayers’ behalf. Supporting employment in the retail, hospitality and leisure sectors is more efficient than endeavouring to create new jobs in other sectors.

I make this point in relation to London but it is no less valid for the rest of the UK. I very much hope that the noble Lord, Lord Carter, will press his colleagues in government for an urgent response on this point.

While for ice-cream licking retail tourists we already top the league in London, perhaps I may now turn to another undoubted opportunity for tourism growth, both for the capital and for the UK as a whole—the market for large-scale conferences and conventions. This sector is often known as business tourism, but as

14 May 2009 : Column 1170

we all know, international meetings are a feature of life for professionals and managers in every walk of life—civil servants, academics, medics and, dare I say, even politicians.

Overseas visitors to conferences and conventions—perhaps I can characterise them as Burberry-buying business tourists—also contribute substantially to our economy, over £1.5 billion a year in London alone. However, in this sector we are by no means world-beaters. In the 1970s, London was the number one destination city internationally for conferences and conventions, but we now rank a lowly 17th behind Barcelona and even Vienna. Essentially the problem lies in our infrastructure—a familiar British disease, some might say. We lack a modern, large-scale, purpose-built convention centre and hotel complex that could house a typical world-wide conference of, say, 10,000 specialist orthopaedic surgeons, together with their partners and supporting staff. More than 100,000 delegate days of large-scale conferences are turned away from London each year, because our venues and accommodation are inadequate for these types of event. Meanwhile Paris with its Palais des Congrés, Barcelona with its business tourist facilities, developed to exploit the international profile from its Olympic Games, and even Vienna, with not one but three large-scale convention centres, all profit at our expense.

Repeated studies—most recently by KPMG in 2006—show that a publicly funded convention centre in London along the lines that I describe would provide substantial positive return on investment to our whole economy. Now the costs of both development land and construction are lower than they were a year or two ago, making the numbers even more persuasive. The potential is well illustrated by ExCeL in east London, the site of the recent G20 conference, which is already investing in increased conference space to house an additional 5,000 delegates, funded by its owner in Abu Dhabi. What is needed now is political and financial commitment from government and mayor to the creation of a purpose-built landmark convention centre.

Talk of nearly half a billion pounds of investment may send some running for cover. It is a substantial sum, but the prospective returns are at least as substantial. It is an investment with tangible financial payback and represents real value for money. I call upon the Government to work with the mayor and the capital’s business community to bring this project to reality, to attract conference visitors away from the more established venues in Europe and elsewhere, and to provide a lasting major contributor to the UK economy. I know that the mayor has written to the Prime Minister signalling his readiness to proceed. I call upon the Prime Minister to respond in equally positive terms.

3.40 pm

Lord Lee of Trafford: My Lords, I declare interests as a former Tourism Minister, a former member of the English Tourist Board, a former chairman of the Museum of Science and Industry in Manchester and chairman of the Association of Leading Visitor Attractions. I also have shareholdings in tourism, hospitality and transport companies detailed in the Register of Members’ Interests.

14 May 2009 : Column 1171

Next Section Back to Table of Contents Lords Hansard Home Page