Moved By The Earl of Glasgow

To call attention to the opportunities and challenges facing the United Kingdom tourism industry; and to move for Papers.

1:58 pm
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The Earl of Glasgow (Liberal Democrat)

My Lords, I feel that this may be a very opportune moment to have a debate on tourism. The credit crunch and consequent devaluation of the pound may present an opportunity for British tourism. On the other hand, it is equally possible that tourism may suffer the fate of other industries in time of recession. The way it goes will depend to a large extent on being able to change the Government's view on tourism.

Successive Governments seem to have regarded tourism as something of only limited importance. The portfolio for tourism has been moved from one department to another and tourism Ministers, when they have existed at all, are constantly being replaced and never being given the opportunity to shine. The tourism industry is of vital importance to the economy of this country. If official figures are to be believed, it is the fifth-largest generator of income, adding 85 billion to the economy and employing 1.4 million people.

However, in spite of these impressive figures, British tourism is not in a particularly healthy state. A world tourism and travel study has forecast that, over the next 10 years, the UK tourism industry will be one of the worst-performing in the world. The study predicts that out of 174 countries, the UK will experience the 10th-worst level of tourism-revenue growth, and a 20 per cent decrease in global market share. Every year, we attract a smaller share of the world market. We have to ask ourselves, is this primarily because we offer the visitor a less attractive product than most other countries, or is it because all other comparable countries—and many much smaller than us—take tourism much more seriously and spend considerably larger sums selling themselves in the marketplace?

The one part of Britain that has the resources to market itself successfully is London. Apart from all its obvious attractions, London has all the advantages, including—crucially—most of the main gateways into Britain. Fifty-five per cent of all foreign visitors come to or pass through London, so there may be a tendency for Ministers to equate the crowds of Italian and Japanese tourists blocking the streets of London with a thriving British tourism industry. The fact is that London is not Britain. I must admit that when such figures as 85 billion per year and 1.4 million employed are bandied around, the Government may have reason for scepticism. The question is, how do you define a tourist and what should be classed as part of the tourism industry?

The traditional image of a tourist is that of a foreigner who spends one or more nights in one or more hotels or guest houses and visits museums, visitor attractions and famous landmarks, spending money in restaurants and gift shops. Of course, he always carries a camera. Alternatively, he may be one of a group of youngsters touring Britain in a camper van, spending nights camping in a tent and eating and drinking in the local pub. However, many other groups are also classified as tourists. For instance, there are businessmen who fly to Manchester or Birmingham for a conference. They stay in up-market hotels and are referred to in the tourism industry as "business tourists". What about our relations in Australia who stay in our house for a few weeks? They may not do much for the neighbouring hotels, but they are still foreign visitors and bound to spend money here.

You may conclude, then, that a tourist can be defined as anybody who changes dollars, euros or yen into pounds and spends money in Britain. You would be wrong because foreign visitors account for only 20 per cent of the tourist spend. Eighty per cent comes from the domestic market. By far the greater amount of tourist income comes from British citizens taking short breaks in Brighton or Blackpool, going to business conferences in Glasgow or Birmingham, renting a holiday cottage in Sutherland or walking in the Lake District. Then you have the day trippers, who take the family out for a day at a nearby visitor attraction. I own a visitor attraction near the Firth of Clyde on the west coast of Scotland. Sixty per cent of our visitors come from the Glasgow conurbation some 30 miles away. Only about 10 per cent are traditional foreign tourists. We also have the coach parties, schools groups, Boys' Brigade outings and corporate entertaining in the castle to add to our tourist number.

There are all sorts of tourism. There is golf tourism, green tourism and, in Scotland anyway, more specialist forms such as fishing, stalking and grouse-shooting tourism. Bucket-and-spade and beach tourism have been declining for a long time for obvious reasons. Many of our traditional seaside resorts, which still depend on visitors for their economic survival and have had a particularly difficult time in the past 30 years, have had to invent new ways of attracting them.

What, you may ask, is a tourist? He used to be defined as someone who spent at least one night away from home. Now the definition has been refined to anyone spending more than eight hours away from home. When, then, is a tourist not a tourist? I suggest that it is someone who does not intend to spend any money. That is when he ceases to be a tourist. Regardless of how "tourist" or "tourism" are defined, and in spite of government scepticism about how tourist spend is calculated, it is unquestionably a huge and disparate industry, vital to the economic health of our country. In remote parts of Britain, such as the Welsh mountains or the Scottish highlands, it is the only industry that enables these small communities to survive.

Of course, not only people working in tourism benefit from a thriving tourism industry. It is not only the hotels, guest houses, visitor attractions and tour operators who flourish, but the museums, cathedrals, country churches, pubs, restaurants, golf courses, shops and manufacturers of souvenirs, such as mugs and T-shirts saying "I love London" or something worse. There is practically no person or business in Britain that does not benefit directly or indirectly from a flourishing tourism industry. However, if you discount London, Britain's tourism industry is one of the least successful in Europe, yet—surely—it has at least as much to offer as any other European destination. We have cultural attractions second to none, history and heritage, castles, gardens and stately homes, the best and cheapest golf courses in the world, some marvellous festivals that take place throughout the year, outstanding scenery and wild and remote places to explore.

The most common excuse for our poor performance is the British weather. It is certainly very unreliable, as those of us who live in the west of Scotland will confirm, but not everybody is looking for the sun. Not everybody wants to lie on beaches, getting brown now and dying of skin cancer later. Another reason given for our poor showing in the international tourism stakes is that England is perceived as being an unfriendly, unwelcoming and overpriced tourist destination in comparison with the competition. Based on the results of visitor surveys, Christopher Rodrigues, chairman of VisitBritain, has said that bad service and grumpy Britons are at least partly responsible for this perception. The likes, he says, of Basil Fawlty still patrol some hotel check-in desks. Some hotels are still blighted by grumpiness and a failure to offer basic services, such as fresh soap. I think it is quite true that some British hotels do not provide the sort of service and facilities that modern-day visitors have come to expect from their holidays abroad. However, I do not believe that the average Briton is any less friendly to visitors than the average Frenchman or Spaniard. We in Scotland have a better reputation for friendliness than those in England, but some of our hotels still leave a lot to be desired.

My car broke down on the M6 outside Wigan some years ago. In a very grumpy mood, I was forced to spend the night there. I am now convinced that Wigan is the kindest, most helpful and most visitor-friendly town in Britain. Nothing was ever too much trouble for the people of Wigan. Although Wigan pier may not be the most inviting visitor attraction in the country, I recommend to your Lordships that, next time you drive north, you take the time to make a small diversion and soak in the atmosphere of that wonderfully friendly town.

If the English really are perceived as being unfriendly to visitors, this is a serious problem. As someone who has spent the past 25 years of my life in the tourism industry, I have no doubt that the single most important thing that a visitor wants is to be cared for and made to feel welcome. It is obvious, really, but so easy to forget. We come back to the same place again and again because we like the people who run the hotel, not necessarily the hotel itself. Being made to feel welcome should start as soon as you arrive in the country. However, if you arrive at Heathrow or Gatwick, for instance, you are made to feel the opposite of welcome. BAA, it seems, is interested only in getting you to part with your money. You are funnelled down channels with retailers on both sides, trying to sell you luxury items—once classified as "duty free"—that you could very well do without.

Gateways to Britain are particularly important to the visitor experience. Why are there no immediately accessible tourist information centres with friendly staff visible all over the airport, or in railway stations, whose job it is to ensure that you have a pleasant stay and to help you to find what you are looking for? Britain in general needs many more tourist information centres located in strategic places all over the country, not only to provide information but to send out a message that says, "You are welcome here, and we want you to have a good time". The Irish can do it; why can't we?

I urge the Government to consider investing taxpayers' money in providing this country with more tourist information centres and in training staff to man them. Local tourist boards and local councils have been abandoning them over the past 10 years due to their expense. But these TICs can do more than anything to change the visitor's perception of Britain being an unwelcoming place.

In the past, one of the other main reasons given for Britain's poor performance in the international tourism market was the relative strength of the pound against the currencies of other Western countries. Basically, Britain was too expensive. It did not give value for money. But now that the pound is so much weaker, that is no longer the case. Surely this is our opportunity to market Britain much more aggressively, particularly to North America and the other European countries, now that they can afford to come here.

Conversely, British holidaymakers will be thinking twice about whether they can afford their planned holiday abroad. Surely this is the time to consider staying in Britain and helping the British economy at the same time. For the benefit of you English, I recommend Scotland for your holiday—maybe taking in Wigan on the way. The Scottish weather is not always as bad as you may have heard. When it is good, Scotland has the most dramatic and beautiful scenery in the world. We really are friendly, even if you do not always understand what we say.

VisitScotland has this year spent a lot of time and money promoting "Homecoming Scotland", a campaign aiming to persuade people of Scottish descent from all over the world to return to the country of their roots. This coincides with the 250th anniversary of Robert Burns's birth. Dozens of specialist events associated with "Homecoming Scotland" will take place all over Scotland. I recommend that noble Lords visit Edinburgh during the festival in August. It is by far the largest yearly arts and music festival in the world, and something that everyone should experience at least once.

Speaking again for the whole of Britain, this year's economic woes could be a great opportunity for the tourism industry. The weak pound should encourage more foreign visitors to spend their holiday money in Britain, and more Britons to spend their money at home. It is one of the few industries that could benefit from this depression and, perhaps more importantly from the Government's point of view, provide employment, be it seasonal or temporary, for many of those who will find themselves out of work this summer.

British tourism can thrive only if the Government are prepared to invest more money in the industry. Yet VisitBritain, whose job it is to sell Britain abroad, has recently had its budget cut from 49.9 million last year to 40.9 million in 2010. Surely it needs more money, not less. It needs the resources to market Britain even more over the whole world. I urge the Government to consider spending money to establish more tourist information centres, particularly at the gateways into Britain. This cannot be done by local councils or area tourist boards. They do not have the resources.

I endorse an idea put forward by VisitScotland and supported by the Scottish Parliament: the establishment of a tourism development bank that would enable small businesses in the tourism industry to borrow the money they need to improve and develop their product. I hope that the Minister will be able to prevail upon his colleagues and persuade them that it is in the country's interests, particularly at this time, that the tourism industry is given a much higher priority.

2:15 pm
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Lord Pendry (Labour)

My Lords, I congratulate the noble Earl, Lord Glasgow, on securing this important and timely debate. From the outset, I declare an interest: I am the chairman of the All-Party Parliamentary Group on Tourism and was the shadow Minister for Sport and Tourism for five years.

It is unfortunate that we seldom have opportunities to debate the importance of tourism and hospitality in this House. That must surely be strange when we consider the importance that both those industries have to the UK economy, not only in revenue terms but also for employment. Successive Governments have never really grasped the significance of tourism—not only the economic arguments, but its impact on the well-being of the nation at large. One has only to think about the relationship between tourism and the 2012 Olympic Games to understand that.

Some argue that there are perhaps some—dare I say it?—"green shoots" emerging. I was heartened by the words of the Prime Minster at the VisitBritain and DCMS national tourism summit in Liverpool last week when he indicated that the Government were taking a fresh view of the British tourism industry. At that summit, there was a clear understanding by Ministers that Governments have not, in the past, given the appropriate recognition to the economic importance of the industry.

The PM set the tone of the summit by clearly spelling out tourism's growing importance in the next decade, seeing the potential of attracting visitors not only from the emerging European countries but also from China, India and Asia, and pointing out the UK's tourism industries' proven ability to take advantage of downturns in the economy. Of course, we have one now, but we have had them in the past as well.

We all know that talk can be cheap. Tourism needs specific undertakings that will not only benefit the industries of tourism and hospitality but the country at large. However, I know from talking to some of those who were at Liverpool that it seemed to them for the first time in some years that the Government were moving in the right direction, albeit in a difficult period for the overall economy.

The executive summary of the British Tourism Framework Review, which I am sure many noble Lords will have seen, sets out clearly Britain's tourism strengths and weaknesses. We can be proud of our strengths. We have superb cultural assets, some of which the noble Earl pointed out. These include great heritage, the world's best museums and galleries, unrivalled theatres, more Michelin-starred restaurants than France, great cathedrals of sport such as Aintree, Ascot, Wembley, Lord's, Wimbledon and Old Trafford, and stunning and diverse landscapes. In VisitBritain we have not just a national tourist board of which we can be proud but, according to the World Travel Awards, the world's best tourist board for five years, as voted for by national tourist boards around the world.

The whole House will be acutely aware that, as has been pointed out, tourism is being hit alongside other important industries and, I dare say, will continue to be hit for some time because of the downturn in the economy. So, more than ever, the strengths, adaptability and ingenuity prevalent in the tourism bodies of the country will undoubtedly be needed to mitigate the problems that tourism will face.

Although tourism has not escaped the economic effects of the downturn, it has been cushioned to some extent by the weakness of the pound, as the noble Earl pointed out. This means that Britain is at least 25 per cent less expensive for visitors from the eurozone countries and 37 per cent less expensive for Americans, Britain's most important market, than this time last year. We know that Britain is an attractive actual and aspirational destination for these important markets, but coupled with the fact that Britain has never been better value for overseas visitors is a hugely positive opportunity. We must equip VisitBritain with sufficient funds to exploit this opportunity and aggressively and creatively to market this country to mitigate the worst effects of the recession. This may well be a welcome temporary silver lining but surely what is urgently needed is a national strategy, for which many leaders in the industry are calling.

The All-Party Parliamentary Group on Tourism and the Culture, Media and Sport Select Committee in the other place entirely supported the industry's vehement criticism of the Government's cuts to VisitBritain's budget in the recent Comprehensive Spending Review. The cuts might have been justified if VisitBritain was not efficient, but it is. They might have been justified if the economic climate and the imminence of London's 2012 Olympic and Paralympic Games did not warrant additional marketing funds, but they do. I strongly recommend to the Minister that this is exactly the time to invest in marketing and equipping VisitBritain with the funds needed to do the job.

In conclusion, I return to a hobby-horse that I have mentioned in this House and the other place over many years: the need for joined-up government. The Minister for Tourism has relatively few policy responsibilities that cut across her desk. Most policies that genuinely affect tourism lie elsewhere in Whitehall: transport, visa prices, aviation, local government spending, regional development agencies and so on. I strongly suggest to my noble friend that, given this, the Minister for Tourism should chair a Cabinet committee of relevant Whitehall Ministers to create a joined-up approach to growing the tourism industry in this country and to reducing the obstacles to our international competitiveness. Let us hear from the Minister when he replies that the encouraging words of the Prime Minister in Liverpool will be spelt out in positive and specific action plans for tourism in the months and years ahead.

2:22 pm
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Lord Inglewood (Conservative)

My Lords, I begin my remarks, as did the noble Lord, Lord Pendry, by thanking the noble Earl, Lord Glasgow, for initiating the debate. Like him, I reiterate my registered interests. I am president of the Cumbria Tourist Board, a part-owner of the Pheasant Inn, Bassenthwaite Lake, in the Lake District, Cumbria, and the owner of an historic house that is open to the public.

It seems absolutely axiomatic that the events in the financial markets over recent weeks will have a major impact on this very important industry for our country. I think in particular of, first, the credit crunch; secondly, the impoverishment of our own citizens that will result from the recession; and, thirdly, the consequences of the collapse of sterling against a number of other currencies.

Fist, as regards the credit crunch, it has been widely discussed in this Chamber over the past few days and weeks that the banking system is still pretty well paralysed. It is incredibly important—this is as true for small business as it is for big business, and much tourism is small business—that that system should be loosened up. It is not necessarily a matter of not being able to get any money. We are told by all kinds of people, not least bankers themselves, that money is available, but somehow nobody is prepared to take any decisions, which is absolutely hopeless for people trying to run businesses.

Secondly, there is the whole issue of the impact of the impoverishment of our citizens on the domestic tourism industry. I am fairly relaxed—I use the word in a technical sense—about that, because, although some of our current customers will cease to be customers, as they will have less money, many new customers may be available, as I am afraid that many people who have gone abroad for their holidays will find themselves priced out of the market and will decide to take a holiday at home. We must be careful in reading the runes in respect of this part of the current crisis.

Thirdly, there are the consequences of the collapse in the value of sterling against other currencies. I suspect that this may be the silver lining to this particular gloomy cloud, because it is absolutely inevitable that inbound tourism will take advantage of this. Our prices, and hence our products, will become much more attractive than they have been. One of the characteristics of the industry, certainly in my area, is the complete absence of Americans, which has been the case for a number of years.

It is absolutely clear that many businesses are extremely apprehensive about what will happen over the next months and years. As regards my hotel business, in December takings were something like 15 per cent down on the previous December. I gather that that is probably typical. Indeed, some people are worse off.

Against that background, the most important thing that the Government can do—I reiterate what has been said about other sectors of the economy—is to get the banks lending again and get the money flowing. It is incredibly important that the vampires in the Treasury stay off the neck of this industry. We do not need tax increases, we do not need national insurance increases and we do not need increases in business rates. All those things would do is exacerbate an extremely difficult situation for those trading. Of course, it is necessary to have regulation. In the world in which we live, we cannot throw all regulation out of the window, although that is rather a wonderful idea. However, the regulation that we have needs to be administered sensibly and sensitively and must not be heavy-handed. We need to bear in mind the underlying purpose for which the rules were first put in place.

The tourism industry often complains to me—I think that this was touched on by the noble Earl, Lord Glasgow—that it does not have a big enough voice or command enough attention in government. While I understand what it is saying—in certain circumstances, things would be a great deal better if it were listened to a bit more carefully—I generally respond that in my view the less the Government have to do with tourism, the better things will be in the round for tourism. I stand by that proposition.

However, given the nature of the predicament that the industry is facing and its economic characteristics, it is important to be absolutely clear that that is not to say that the Government should do nothing; far from it. In the context of the industry in Cumbria, which is the part I know best, it is time to shift the emphasis of the promotional material that has been published, either directly or indirectly, under the Government's aegis. After the considerable success of the promotion of Liverpool as the city of culture, there should be a change of emphasis towards visiting the countryside, particularly visiting national parks and areas of natural beauty. I urge VisitBritain to initiate a spring campaign entitled "Return to the Countryside".

2:28 pm
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Lord Lee of Trafford (Liberal Democrat)

My Lords, I start with a quotation:

"Tourism matters. It is a major source of jobs and wealth creation across Great Britain. But in many ways it is a forgotten industry, and one that features all too seldom in the political or economic debate".

Those are not my words but those of Richard Lambert, the director-general of the CBI, in a foreword to the recently produced British tourism framework review, Achieving the Full Potential of the Visitor Economy. His words were sad in some respects but very true.

I join in congratulating my colleague and noble friend Lord Glasgow on choosing this timely and apposite debate. I certainly go along with all he said about Scotland. Last year I had the privilege and pleasure of fishing on the Tweed, playing golf at Loch Lomond and attending the Edinburgh Military Tattoo. I have not as yet visited his castle but I look forward to doing that in due course. I welcome the noble Lord, Lord Carter, to the Front Bench, because I think that I am right to say that this is the first debate on tourism that he will have answered. Given that he has a split ministerial role between DBERR and the DCMS, he is in many ways the ideal Minister to answer this debate and help us to take the industry forward.

I declare my interests: I was Tourism Minister in the late 1980s, I was on the English Tourist Board in the 1990s, I served three terms as chairman of the Museum of Science and Industry in Manchester and I have been chairman of the Association of Leading Visitor Attractions—the million-visitors-a-year club—since its formation in 1990. We have 42 members, including Westminster Abbey, the Blackpool Pleasure Beach, the Eden Project, Historic Scotland, the Churches Conservation Trust and—I am delighted to say—the Palace of Westminster itself. I have a number of shareholdings related to travel and tourism listed in the Register of Members' Interests.

I shall briefly touch on the history of the relationship between tourism and the Government. In March we will celebrate the anniversary of the Development of Tourism Act 1969, which first established a statutory framework for the national tourist boards. I think that I am right to say that my colleague and noble friend Lord Rodgers, as President of the Board of Trade, brought in that legislation. Since then there have been 20 Ministers with responsibility for tourism, and I understand that they will all be invited to a celebratory lunch in March for that anniversary.

Ministers and shadow spokespersons come and go, but the sad reality that has been hinted at is that, irrespective of party, tourism has never been taken seriously by Governments of either main persuasion. I am delighted to follow the speech of the noble Lord, Lord Pendry, who has been a great champion of tourism over the years, but I recall that many years ago, when he was first appointed as shadow tourism spokesperson, he told me that he went to the filing cabinet and pulled out the file marked "Tourism", and at that stage it was empty. When I was Tourism Minister, I remember also talking to the chairman of the Northumbria Tourist Board, who told me that the only way that she could get money for tourism was to raid the fire brigade's budget.

Things have improved somewhat over the years but, by and large, Ministers and Governments have just fiddled with the structure of the tourist boards. We have had countless summits, reviews and strategy documents that must have cost an absolute fortune. I believe that when a new Minister arrives at the Department for Culture, Media and Sport, the officials immediately say, "Now, Minister, what would you like? We can let you either have a tourism review or produce a strategy document". Not a great deal more happens. Something new called, I gather, the tourism advisory council will be created. I am not sure why that is needed, when we have a very effective Tourism Alliance. Nevertheless, it gives Ministers something to talk about in their speeches before they move on to other ministerial offices.

I know that I sound cynical; I am very cynical, because I have seen what has happened over 20 years. Tourism has moved from the Department of Trade and Industry to the Department of Employment, the Department of National Heritage, and now the Department for Culture, Media and Sport. All the past chairmen of our national boards have departed from office disillusioned with the reaction of the Government, not with the industry. There has been a steady reduction in funding for the National Tourist Board. There is to be a 19 per cent reduction over the next three years, which has resulted in VisitBritain having to reduce its staff overall by 30 per cent, and I think that I am right that the reduction will be 40 per cent in London.

Tourism is not in the title of the DCMS, yet it is our fifth most important industry. The role of the chairman of VisitBritain is seen by the Government as a six-days-a-month appointment. The chairman has always spent more time than that at the job, but that is the way that his role is perceived by government, which is, frankly, absurd. At the end of the day, it does not really matter what individual departments think or do. What we have to do is get the message across to the Prime Minister and the Chancellor of the Exchequer, where the axis of power lies in this country. Until they change their perception of tourism, nothing will really happen.

That is why I welcome the noble Lord, Lord Carter, to the Dispatch Box, because his is well known as having considerable influence with No. 10, where he came from, and with the Prime Minister. I hope we will see some changes, because, as the noble Lord, Lord Pendry, said earlier, the Prime Minister attended the tourism summit in Liverpool and paid customary lip service to the successes of the industry and its opportunities. However the test will be what action the Government take. Will they take tourism seriously for the first time, because, at a time of rapidly rising unemployment, a very worrying economic situation and a weak pound, perhaps tourism's time has come?

I recall that more than 20 years ago the noble Lord, Lord Young, brought tourism with him from the DTI to the Department of Employment, because of the job-creation potential of the industry, when at that stage unemployment was the dominant issue. In the latter 1980s, during the broad period when I was Tourism Minister—although I do not claim any personal credit for this—the tourism and hospitality industry was creating some 1,000 net new jobs a week. In my speeches at the time, I referred to the complementary nature of the industry as between service and manufacturing, because tourism was still dismissed as a semi-candyfloss industry.

There is a link between manufacturing and service and, 20 years ago, I noted that the largest contract for steel placed at that time was by the Blackpool Pleasure Beach for the new big ride there. We calculated then that 80 per cent of the content of new hotels was of UK-manufactured origin. Regarding our aerospace industry, think of the number of aircraft built for the tourism industry and for holiday travel.

Today, I suggest that tourism and hospitality can play a significant role in creating employment and boosting our economy. There is a great opportunity for a double tourism whammy, with the weak pound attracting overseas visitors, and a weak economy and rising unemployment here sadly meaning that more people stay at home and take more modest holidays. There are some encouraging trends: in the past two or three months Eurostar has experienced a 15 per cent increase in inward passengers. Most of them are shoppers, so the trick will be to convert those shoppers into tourists by encouraging them to extend their stay. On the domestic situation, the Caravan Club is reporting something like a 40 per cent increase in bookings to their campsites this year.

Despite some of the comments that have been made, there has been an improvement in the quality of our hotels and restaurants in recent years. There has been a substantial development in new budget hotels, the skills of the industry have improved, and I am sure that there is fresh soap in the hotel of the noble Lord, Lord Inglewood, knowing the standards that he has set.

We have to build on the opportunities. The industry is appealing to the Government for 6 million—that is all—to promote a "value Britain" campaign, under the slogan, "Britain has never been more affordable". Similarly, regarding the 2012 Olympics, on which we are spending billions of pounds on capital accounts, so far the Government are refusing to put in any extra money to support VisitBritain's marketing campaign. No commercial organisation would spend so much capital without some supportive revenue.

Apart from money, the industry has a number of other requests. It seeks better co-ordination between government, VisitBritain and the regional development associations; the lifting of some regulatory burdens; and a ministerial tourism group chaired by a senior Minister—it is important to have that. We need infrastructure improvements. I pay tribute to the improved train service from Manchester to London, which is now first class, with three trains every hour. I am sure that the noble Baroness, Lady Valentine, will be referring to London. We certainly need a major new convention centre in London. Double summer time would also be much appreciated.

Tourism, then, offers a rich jigsaw of attractions in this country, in heritage and the countryside, and in our resorts. We have so much to offer the overseas and domestic visitor. I urge the Government to respond to the industry's pleas tangibly and, for the first time, to take tourism seriously.

2:41 pm
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Baroness Valentine (Crossbench)

My Lords, I thank the noble Earl for securing the debate, and I echo many sentiments that previous speakers have expressed. For too long, the tourism sector has been considered as "nice to have" or as some sort of luxury, but that view is out of date and surely not shared by most noble Lords.

We are in the middle of the sharpest downturn that any of us can remember. The whole UK—London in particular—suffers more day by day, as yesterday's employment data confirm. We must hope that the Government's various interventions, the arrival of Obama and concerted international measures can help us at least to see the bottom and, on a not too distant horizon, the beginnings of recovery.

The collapse of Lehmans, in particular, sent shock waves beyond banking. It acted immediately on consumer confidence, almost like a wrecking ball. Confidence is still desperately fragile. Retailers and restaurateurs, hoteliers and visitor attractions have mostly—not all—survived Christmas and the January sales. The injection of cash into London's West End by overseas visitors can be like CPR—a vital electric shock to the heart of the UK economy. Those euros and dollars enter the UK economy and, like the tourists themselves, filter out from London to spread a boost across the country.

Where do we go from here? It is vital that the economic contribution of tourism, of hospitality and of visitor-targeted retail is acknowledged. It is not a frippery but a sector worth over 100 billion annually to the UK economy, over 8 per cent of GDP and over 2.5 million jobs. Whether that means that the departmental responsibility should pass from DCMS to DBERR may be worth debating, but the point is that the value of the sector can usefully be compared to that of manufacturing, broadcasting or construction, all currently sponsored by the latter-mentioned department.

The Motion that we are debating refers to opportunities. The most immediate is the impact of the current exchange rates. The economic downturn has not reduced the attraction of London, Stratford or Oxford's heritage offerings. The recession has not damaged the cultural offerings of London, York or Edinburgh. The landscapes of the Lake District, Snowdonia and Dartmoor have not become less dramatic because of a global downturn. They are still fabulous, unique and special but, to quote a well known retailer's strap-line, they have become surprisingly affordable—to overseas visitors, at least.

Tourism has a disproportionate effect in London. Fifty per cent of all visitors to the UK include London in their itinerary. It also supports a much wider range of businesses than are usually considered under the heading of "tourism". There is retail and transport, for instance. Tourism-led businesses, such as hotels and catering, also employ many who are less skilled. That is of increasing importance, now we have so little labour-intensive heavy industry. So, it is important that our Government and our political leaders more widely acknowledge, encourage and support businesses in the tourism sector. Now is the right time to do so. I can see no clearer win-win intervention for government to make than this. It does not take months to turn around or have complicated side-effects, and we know that it works. I paraphrase the 1950s TV series, "Flash Gordon": "You've 24 hours to save our retailers and hoteliers". Now is the time, not just for Gordon but for Boris.

It is all the more disappointing, then, to learn of significant government cuts in the funding of tourism promotion, as was alluded to earlier, with 1.9 million cut from so-called DCMS gateway funding to promote London to would-be visitors from North America and Europe. It has recently been demonstrated that the American campaigns generate a return of over 15:1. That is, 15 of economic benefit to UK plc for every 1 spent in promotion: not so much "Buy one, get one free", as "Buy one, get 15 free". Does the Minister fancy that as a good deal?

The Government have trumpeted their 10 billion of support to SMEs. If each RDA were to receive just 0.1 per cent of that to plough into proven tourism marketing activity, it could keep the visitors coming and strengthen the economic lifeline that they provide. Compared with the vast sums invested in banks and SMEs, that is a rounding error.

In the longer term, the 2012 Olympics provide a fabulous opportunity. In the next four years, we must concentrate our efforts on putting on a good show and telling the world about London—not just a good show, but a West End show. We must invest not necessarily huge amounts of money but time and effort to make London's West End product more desirable to the new visitors we seek to attract. Marble Arch, for instance, would benefit from a status beyond that of an oversized traffic bollard, and, in making Marble Arch, our public realm, our theatres, shops and restaurants the best they can be, London can beat any city in the world.

I offer the Minister something that government Ministers rarely get: a quick, affordable and deliverable win. In the great scheme of things, a very small investment could yield very high returns. Now is the time. I implore the Minister to return to his colleagues and evangelise on this theme. We have the world's leading visitor attractions: from the O2 to the "Angel of the North", from the British Museum to Stonehenge. We must do all that we can to show them off to the world.

2:47 pm
Photo of Lord Greaves

Lord Greaves (Liberal Democrat)

My Lords, I too, congratulate, my noble friend Lord Glasgow on securing this debate and, in the context of what I hope to say in the rest of my speech, I declare an interest as a member of the British Mountaineering Council and of Pendle Borough Council.

I hesitate a little to take part in these debates; they are full of experts in tourism and economic development, and I am neither of those. I pay particular tribute to the work that my noble friend Lord Lee of Trafford has done in the north-west. He was wrong about one thing: we do not have a new, 15-minute railway service from Manchester to London but a new, 15-minute railway service from London to Manchester. That is the important thing.

I suppose that I bring to the debate some personal experiences, those of a person who could have come in his big leather boots for tramping over the hills and mountains. I could have brought my dainty little rock-climbing shoes, which I still wear occasionally. I could even have come in my cycling tights, although the Doorkeepers might, in their usual polite manner, have had something to say about that.

I last took part in one of these debates on 3 November 2005, when my noble friend Lord Clement-Jones asked a Question for Short Debate. Then, I talked about mountain walking, mountaineering and climbing and other adventure sports—in general, informal, outdoor recreation. That covers a lot of people in this country; perhaps one third of them undertake some kind of informal, outdoor recreation regularly, and more do it occasionally. My lifetime climbing partner tells me that he has now taken up fly fishing, which is also the same kind of activity. These activities are characterised by the fact that they are voluntary. Individuals are self-motivated; they go out and take part because it is a nice day—even a nasty day—and they feel like doing it. Much of this activity is relatively unorganised and a lot of it is very unorganised, but it is based on what people do.

The organisations that exist in these areas—some are more formal—range from the British Mountaineering Council and the Ramblers' Association to various cycling bodies and groups. Most of the people who take part do not have any direct contact with them, although they benefit from what the organisations do and from the improvements they make to facilities or access and so on. They may benefit socially from joining local clubs, such as cycling or climbing clubs, but most people who undertake these activities just go out and do them.

Often, these activities have a strong code of ethics—none more so than climbing and mountaineering—and many of the unwritten rules are enforced by peer pressure. People have a quiet word when they see others doing things that are not acceptable, whether it is banging bolts into a gritstone crag, leaving farm gates open so that the cattle and sheep can get out, or even—dare I say it?—cycling on pavements. I look around the Chamber and am glad that today I do not see any of the people who, whenever cycling is mentioned in your Lordships' House, complain about people knocking them down.

Overall, we are talking about activities that are economically beneficial—I spoke at length about that last time we debated this subject—socially beneficial and beneficial to people's health. Some research has been done into what is called "green exercise" and, although I am no expert in being able to tell how accurate or valid it is, it seems right from my personal experience. I refer to the sense of mental well-being, the increase in self-confidence and perhaps the reduction in a tendency to anti-social behaviour that can come from what people used to call "communing with nature". There is little doubt that people feel an affinity with the natural world and nature. We feel it naturally and instinctively; it is built into our genes. I refer not just to the great outdoors but also to the local park. Combining that with physical activity in what can be called "green exercise" brings together two beneficial features and, so far as one can tell, that has nothing but a beneficial effect on those who take part. All these things are unquantified and are not directly related to the tourism economy, but they are certainly related to the population's general, mental and physical health.

From my own point of view, when I really feel like beating up the world, getting on my bike and peddling up Pennine hills has a remarkably beneficial effect. For some strange reason, going to the top of Pendle Hill in a roaring gale, when the rain is horizontal, has the same effect. Equally, I have memories of incredible winter days in the Lake District, walking, for example, along Striding Edge, Swirral Edge, Sharp Edge and other such areas, when the mountains have been covered in snow in the middle of winter and there has not been a cloud in the sky. You remember those things for the rest of your life, and it helps you when you are going through difficult periods. I may be going off the subject of tourism a little, but I do not think that we should in any way underestimate the importance of this kind of activity. However, as the noble Lord, Lord Inglewood, said, I think, the Government do not relate to this kind of thing very easily.

I want to talk about one particular aspect of tourism. Last time I spoke on the subject, I reminisced that 30 or 35 years ago when my wife and I stood up in the local council and advocated the development of tourism as an aspect of the local economy in east Lancashire, we were laughed at, shouted at and jeered at by people who thought that it was a ridiculous idea. In their view, tourism was something that you did once a year when you got on the train to go to Blackpool on your holidays, unless you were lucky and could go for a dirty weekend at some point as well. That is what tourism meant. It happened at seasides or in foreign places; it did not happen in industrial towns. Interestingly, now tourism can occur anywhere and everywhere.

We recently opened a new tourism facility in Pendle called "Discover Pendle", which we were able to build on the forecourt of a huge new discount store called Boundary Mill that has just been built in Colne. Those who see the adverts on television will know that it is at the end of the M65 at Colne. As part of the planning permission, we were able to get some planning gain, which meant that we were able to get the visitor centre built. It is not a traditional tourism destination. It is managed by Boundary Mill on behalf of the council, which seems to be a sensible arrangement because it knows how to manage these things. It knows how to sell things and deal with customers, which council staff are not always best placed to do. This little "Discover Pendle" centre opened in March 2008, and we have already had 60,000 visitors through the door. I am told that the Northwest Regional Development Agency did a mystery shop there and gave it a 100 per cent score. I have no idea what these statistics mean, but that sounds good to me.

That is the kind of opportunity that local councils, local partnerships and so on need to take to promote their area. They need to look again at what is in their area, whether it is the beautiful countryside or something else, and understand how it can be attractive to those outside. We have fantastic countryside in what we now call Pennine Lancashire, right on the edge of the Yorkshire Dales. The area is not much different from the dales, except that it is not a national park. We have industrial and townscape heritage, as well as Titanic heritage with Wallace Hartley. Therefore, there may be plenty of things for visitors to do, but often the local people will not see them because they are used to them being there all the time. They do not look at their surroundings as they would if they went to France or India, where they would say, "This is a very interesting place". They do not see the interest in their own areas, although they should.

I want to comment briefly on the Marine and Coastal Access Bill, which has the potential to bring economic development to coastal communities. I sincerely hope that the relevant parts of the Bill will get through both Houses and that the Government will set up the new coastal path around England as soon as they can. The Ramblers' Association believes that it could bring up to 128 million to coastal businesses and create more than 11,300 jobs. I do not know whether that is an optimistic view, but the opportunities will be there. To those in some communities who are worried about this impending legislation, I say, "Do what we have done in Pendle. Look at yourselves. Look at what you can offer to people and take advantage of the opportunities offered by the new coastal path". There is no doubt that the south-west coastal path brings more than 300 million to the regional economy. The chief executive of the Ramblers' Association, Tom Franklin, says that the continuous coastal path for coastal economies is paved with gold. That may be a little over the top, but there are certainly opportunities there if the local people are able, willing and prepared to take them, which I sincerely hope they will be.

As the noble Lord, Lord Inglewood, and others have said, there is a huge opportunity in the present economic situation. Fewer people will go abroad, and therefore there is the chance to sell them tourist facilities in this country. We have fantastic countryside and fantastic mountains; we simply do not sell them as hard as we should to people in the rest of Europe and the rest of the world.

2:59 pm
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Lord Bradshaw (Liberal Democrat)

My Lords, other noble Lords have underlined the fact that tourism is a substantial earner. It is a creator of real jobs. We might contrast that with the fact that many of the real jobs in, for example, the City of London have been founded not on producing goods and services that people want but on what I would call fool's gold—money-making financial instruments that, in my view, have little real value to people.

Will the Minister tell us what other industry stands at such a threshold of opportunity as the tourism industry at present? We hear doom and gloom on all sides, but is tourism anything but an opportunity waiting to be seized? As we see our money poured into the coffers of banks all around, we are aghast at the small amount of support given to capitalising on the opportunities that many noble Lords have described. Obviously, the industry needs better organisation, but it does not need bureaucratic organisation. The various bodies could put into practice what we have heard about if they were given a little more money.

The industry is very diverse. We heard from the noble Lord, Lord Inglewood, about certain aspects and from my noble friend Lord Glasgow about others. I draw attention to the National Trust. I have the 2009 members' handbook. Those seeking to create jobs for young people might look very closely at two things to which I have contributed lately, as I imagine other noble Lords have: the appeals made by the National Trust for Tyntesfield and Croome Park. Those are two enormously important historic buildings. Croome Park is a house and estate of unrivalled significance, with the grounds landscaped by Capability Brown. The National Trust is taking on people to learn the craft of repairing and keeping together historic houses and estates. That is work for the future. It could take on many more young people, who could learn a very useful trade.

If the House permits me, I shall go back to the days when I was general manager of western region at Swindon, where we had a large training workshop for fitters and electricians. Swindon works was going to close but I pleaded with the Government to keep the training facility open so that we could continue to take on apprentices and train them as fitters and electricians. That plea fell on the deaf ears of the people to my left, now the Official Opposition. They insisted on closing the facility and, of course, not long afterwards we were desperately short of fitters and electricians. I say to the noble Lord, Lord Carter, that we should take this opportunity to train the people who will provide the tourist amenities that people want.

I endorse what my noble friend Lord Greaves said about tourist centres. This time last year, I was in New Zealand. I stopped in a fairly remote place, in the middle of a volcanic area, where there was a magnificent visitors' centre which was attracting huge numbers of people. It was beautifully put together and explained how volcanoes work. I do not suppose that it was ludicrously expensive, but, in the heart of a tourist region, it focused your attention on what there was to see and, of course, where you could spend your money.

We obviously need well organised packages. The industry is capable of doing that. For example, the Swiss have a travel pass, with which the Minister is familiar and which, I imagine, most people have bought when in Switzerland. You get a little red card and you can go on every bus, every train and every ferry. The Swiss market it magnificently, but we do not have a similar product in this country. I do not ask the Government to do that, because in Switzerland it is not done by the Government, but they could bring together people who could contribute to or market such a card.

There is inertia in our tourism market. There are many things to be done, but probably very few people doing the most important things because they are all extremely busy, as the noble Lord, Lord Inglewood, said, doing their own thing. They are not there to sell Britain abroad; they are there to run their hotels, their country houses or whatever in the most efficient way. That is all we can expect.

I am, to some extent, critical of some of the big hotel groups. For nearly 10 years, since coming to your Lordships' House, I have stayed in a hotel run by the Thistle group, one of the biggest groups. However, last time I stayed there, it had taken the bottled water out of the bedrooms. I am paying a substantial sum of money—not peanuts—to stay there, but there must be two separate people, one who decides to take the bottled water out of the hotel bedroom and another who decides to print on your receipt, "Committed to service". These people do not live in the same world; one wonders whether accountants run the business and not people with a feel for tourism, a feel for visitors and a feel for the attractiveness of the country.

I make one other plea. One of the worst features of this country is the state of public lavatories. I do not want to harp on this, because the matter was raised in your Lordships' House last week, but it is very difficult to find a public lavatory and often they are not clean. They are a disgrace to the country. Thirty or 40 years ago we used to make fun of the French and Italians because they did not have them. A little while ago, when I went to Paris, the facilities—if that is the right description—at Gare Saint-Lazare were pristine, clean and modern. That is something one rarely sees here. I do not think that the Minister is the Minister for public lavatories, but I wish that he would bring the matter to the attention of those whose responsibility it is.

3:08 pm
Photo of Lord Addington

Lord Addington (Liberal Democrat)

My Lords, I speak at the end of a long list of Members from these Benches. Much of what I wanted to say has already been touched on. Originally, I thought that I would talk about sports tourism, with an emphasis on the Olympics. However, as I started work on this, I became increasingly aware that everything to do with sports tourism concerns other forms of tourism. One takes part in a leisure activity and one derives pleasure from that. It comes down to the service industries and what one does at the edges of the core activity.

In sport, it is quite simple. The bar for sporting activities and facilities for sport in this country has been raised quite dramatically over the years. There are now corporate boxes at football grounds, rugby grounds and cricket grounds. We expect to be looked after and fed well. Most of us expect to sit down in reasonable comfort when we are watching those games. Some people do not, however, and I had a nice little punch-up at my party conference about it. If you are paying Premiership prices, things possibly get a little better. You expect to be well maintained and looked after.

Unfortunately, we do not seem to be able to maintain that across the entire experience. In this country, there is still prejudice against the service industries. They are low-prestige industries. Although standards have risen in hotels, that has often been due to foreign staff who have shown that it is quite possible to make somebody's meal pleasant without having to make the food wonderful. Adequate will do as long as it is well presented and served on time with a smile and with the courtesy of calling the person paying "Sir" without a chip on the shoulder. These things do not seem to come naturally to part of our system.

Things are worse at the lower end of the economy in smaller-scale units, which have least time to invest in staff. My noble friend Lord Glasgow referred to people attending conferences being tourists. We have all stayed in various places at party conferences and there has been a varying degree of service. Certain places just do not get the idea that you are supposed to be having a reasonably pleasant time all the time. You wonder why you go there on party conferences—it depends on the venue, but I am not quite brave enough to attack specific venues—because the cheaper end is not a good experience. That applies across the board, in sport and elsewhere. If the things around what you are doing are pleasant, then everything goes well.

Has the clock been reset?

Photo of Lord Addington

Lord Addington (Liberal Democrat)

I did not think that I had been speaking for 12 minutes, although it may have sounded like that to others.

Noble Lords:

No, no!

Photo of Lord Addington

Lord Addington (Liberal Democrat)

For once, your Lordships are on cue. The whole idea of trying to improve service comes across. The Olympics are an opportunity to establish training levels in a way that we have never done before. We have a wonderful precursor: the Manchester Commonwealth Games. They allowed the Olympics to occur because they proved that it could be done. We are also very lucky to have the Glasgow Commonwealth Games coming up. We can transfer an experience around sport across the sporting world so that you do not just go, watch and leave. Even if they do not particularly want to be mollycoddled at the ground, most people would like to be served a drink or a meal in reasonable circumstances on the way to or from that experience. If you are served by people who have the same first language, they will probably have a slight edge, no matter how charming a person who has English as a second language is, because they can interact with you at a better level about the cultural experience you are going through. It would probably be an economic advantage.

How are we going to achieve this? Will the Government take a more flexible approach to how they provide training in this sector for these groups of people? How will they sell the idea that working in the service industries is not something that you do only when you are a student or cannot find anything else? That is what happens at the moment. Statistics from the Culture, Media and Sport Committee of the other place show that 15 per cent of people involved are on the minimum wage and 14 per cent of people are below it because they are under 18. It is not a prestige industry. How are we going to improve that? The Government have done some work, but how will they inform the qualifications and the culture that lead into the industry?

The Olympics and the Glasgow Commonwealth Games are coming. That will not give the Government enough time to get the whole thing done, but they can make a start now with best practice models and how to adopt them. I hope that the Minister will tell us how the work is going because, as my noble friend Lord Greaves said, in all sections of leisure activity, the extra pound that you can make comes from making the experience pleasant. It is not about the core activity, which has probably been milked dry, if that is the correct expression; it is about how much time people spend around the edge of the core activity. If people can get a decent meal when they have been to the Olympics, I am quite sure that they will go on to the theatre and perhaps take a trip on the train up to York or Edinburgh—or Manchester or, indeed, Wigan. Rugby league might be going on at the same time.

Photo of Lord Addington

Lord Addington (Liberal Democrat)

Perhaps Wigan will be playing against Wakefield, my Lords. If we can combine these things, we will stand a chance of getting the best out of the Olympics. However, if we expect people to go, come back and keep quiet, we will not, and we will miss most of the benefit.

3:16 pm
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Lord Clement-Jones (Liberal Democrat)

My Lords, I am delighted that my noble friend Lord Glasgow took the opportunity to raise the future of tourism in his well informed and elegant speech opening this debate. He raised some important points about the nature and potential of British tourism and the huge benefit it brings. Many other well informed noble Lords, including many of my noble friends, made important and powerful contributions, including some on leisure and recreation. I hope those reading Hansard after this debate will have their appetite whetted for some of our beauty spots. They may even hope to catch sight of my noble friend Lord Greaves in his cycling gear as he goes swiftly up Pendle hill.

I join my noble friend Lord Lee in welcoming the Minister to his first tourism debate. It is a subject that many of us feel passionate about, despite its somewhat Cinderella status within government. I am pleased to debate with the Minister for the first time. My noble friend alluded to the achievement of my noble friend Lord Rodgers, who pushed through the Bill in 1969 that set up the original national tourist boards. That is a significant 40th anniversary that we should be celebrating. We should be building on that achievement with our debate today and government action, which I certainly hope is in the offing.

In the debate on the Queen's Speech in December, I argued that the Government urgently need in their policies to better reflect the value of tourism and travel to the British economy. In particular, I argued strongly against the drastic government cuts to the budget of VisitBritain and for tourism promotion, which have led to a reduction in staff numbers by VisitBritain of 120 over the past few years and will lead to the loss of a further 90 posts in future. Since then, I am glad to say that the executive summary of the framework review was published in January, as mentioned by my noble friend Lord Lee. It relies on an important piece of work by Deloitte's on the economic case for the visitor economy.

The Deloitte's report confirms that tourism as an industry is more important than even advocates such as me had thought. As mentioned by other noble Lords, measured by conventional accounting, tourism is the UK's fifth-largest industry and is currently worth almost 52 billion to the economy. 1.3 million jobs are sustained by tourism activity in the UK and it employs more people than are employed by construction or transport. Deloitte's, using what is called tourism satellite accounting, which has been developed over recent years by the World Travel & Tourism Council and Oxford Economics, makes the argument that the tourism economy has an even greater significance. This takes into account the impact on other sectors, such as suppliers, retailers and manufacturers.

On that basis, with direct and indirect economic impact, it represents about 8.2 per cent of the UK economy. Deloitte's points out that tourism is a very important source of enterprise and business formation. It makes a great contribution to sustainable development in coastal and rural areas and to regeneration in urban areas.

However, there are some very worrying indicators, some of which have been mentioned by noble Lords. The UK's share of world tourism has declined in recent years, and the country has slipped from being the fifth-highest earner in the world from tourism in 2005 to sixth now. The tourism deficit now stands at 20 billion. Domestic tourism is also declining. Spending by UK residents has fallen by almost 5 billion since 2000. The latest figures, issued last September, show that inbound tourism has dropped heavily, particularly from North America. My noble friend Lord Glasgow mentioned that the forecasts by the World Travel & Tourism Council for UK tourism are also very gloomy.

Deloitte's says that as a result of the impending recession, growth in expenditure could slow by between 3.4 per cent and 4.7 per cent, equivalent to 11 billion, and that 114,000 jobs could be at risk. The Deloitte's report demonstrated some worrying longer-term barriers to development: transport difficulties; poor information for customers; lack of marketing; a skills gap; visa costs and availability. Yet, even in the face of those barriers, Deloitte's still stated that it believes that the tourism economy could, over the next few years, grow to 188 billion-worth of GDP.

The framework review—as yet published only as an executive summary—as well as arguing for a full agency to promote English tourism, makes a powerful case for more government support to take the opportunity of a falling pound and to guard against a severe recession that could affect 114,000 jobs and to take full opportunity of the 2012 London Olympic Games.

The Government seem to hope that the tourism industry will be worth 100 billion by 2012, and anticipate that the London Olympics will provide a major boost to the sector. This target will be much harder to achieve given the global economic crisis. The framework review makes the case that we cannot successfully promote the UK as a tourist destination in the run-up to the 2012 Olympics without addition to VisitBritain's promotional budget.

Small and medium-sized companies, which the Government claim to be keen to help through this recession, make up to more than 90 per cent of the tourism sector. They are, in the main, dynamic and entrepreneurial but, as the Deloitte's report makes clear, government support is needed. The industry is fragmented and the free rider effect means that there is little incentive for smaller businesses to contribute to promotional costs. As was pointed out by my noble friends and the noble Lord, Lord Inglewood, there is also a credit crunch in the sector.

Will the Government at last acknowledge that the budget for VisitBritain's activities must be increased if this vital sector of the economy and small businesses within it is to survive and prosper? Will they heed the warnings from those such as the noble Lord, Lord Inglewood, about access to credit? The framework review has demonstrated that there are few further economies to be made through structural changes to tourism promotion. What is the Government's response to the review? Do they acknowledge the importance of the industry? At the very least, it is the fifth-largest UK industry and, as the Deloitte's report shows, it contributes directly and indirectly to 8 per cent of GDP. Do they even understand the multiplier effect on other parts of the economy mentioned in the review? The noble Baroness, Lady Valentine, was eloquent about London and the multiplier effect. The recent national tourism summit was held in Liverpool, the site of the fantastic 2008 city of culture year, which has now become a real tourism magnet in the north-west. Liverpool is also an example of the multiplier effect. From the minimal VisitBritain promotional budget of 45,000, it managed to generate some 3.5 million first-time visitors and 176 million in additional local economy spend.

The estimate in the tourism industry is that the multiplier effect is even greater than 15:1; it is that there is a 40:1—yes, 40:1—return on promotional expenditure on tourism. That has now been endorsed by the Treasury. What possible excuse can there be for hanging back?

Do the Government understand that the fragmentation of the industry and the free-rider effect mean that they need to play an active enabling role? Do they understand the case that the review is making for much better co-ordination of action between national tourist boards, the anomalous position of England and much better policy co-ordination on tourism matters between the nations? I hope that the Minister will make the Government's view crystal clear.

My noble friends have asked a number of questions and I hope that the Minister will answer them. Specifically, in this context, will the Government support, first, a stand-alone national tourist board for England that is separate from VisitBritain, with a separate corporate body? Secondly, will they create a cross-national ministerial working group of UK Tourism Ministers to address reserved matters affecting tourism—for example, visas, taxes and immigration policy? Thirdly, will they create, at the very least, a cross-Whitehall policy working group on tourism? What are the Government's intentions towards a tourism advisory council? We on these Benches would prefer something more powerful than a Whitehall policy working group; we would like a powerful Cabinet committee, which the noble Lord, Lord Pendry, mentioned. Fourthly, will they reappraise the budget needed by VisitBritain in light of the review, particularly for tourism promotion, especially when compared with others, such as Turkey, Spain and Greece? The Government have put more money through the recent Comprehensive Spending Review into heritage, museums and the arts, but the one thing that could ensure greater audiences and visitors in all these areas—tourism promotion—has been cut back. Where is the logic in that?

Fifthly, will the Government agree the very sensible and reasonable suggestion that they join in the public-private promotional "value Britain" campaign, which is designed to ensure the growth and development of the UK tourism industry and take advantage of the lower pound? Sixthly, will they heed the warnings about the need to fund fully the 2012 tourism strategy to promote Britain as a destination and ensure that the legacy tourism opportunities are taken?

In addition to greater marketing and promotion, we need to examine other measures to encourage visitors to the UK, such as the competitive disadvantage suffered by the industry because of VAT on visitor accommodation. The cost and availability of visas is another matter that needs examination. The Home Office seems to have absolutely no concept of the knock-on effects of the cost of visas on tourism.

It was disappointing that the heritage protection Bill was not included in the Queen's Speech, for the very reason that it is so important to our tourism industry. There is no room for complacency in the British tourism industry, as my noble friends Lord Bradshaw and Lord Addington made clear. We do not need to copy the last Tourism Minister, Margaret Hodge, who went out of her way to criticise the tourism industry, but there is no doubt that many aspects of what the British offer need improving. The delays experienced by delegates, including foreign government Tourism Ministers, when travelling to the World Travel Market at ExCeL were inexcusable. We also need all hotels to take part in a national classification system.

This Government have taken the British tourism industry for granted for far too long, but there is huge potential. Britain has the fourth-strongest tourism brand in the world. The Government need to recognise its current contribution, its greater future potential contribution to the economy and the dangers of government inaction as we head into recession. We need a real change of heart from the Government towards tourism. I look forward to the Minister's reply.

3:28 pm
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Lord Luke (Shadow Minister, Culture, Media & Sport, Shadow Minister, Defence; Conservative)

My Lords, we have had a most interesting debate. I join other noble Lords in welcoming the noble Lord, Lord Carter, to his first tourism debate. I thank the noble Earl, Lord Glasgow, for giving us such an excellent opportunity to debate this subject at this time. It is even more important now than it has been.

Tourism in this country is the fifth largest industry. It is massive, and it seems to generate more than 90 billion per annum for the economy. There seems to be some doubt in this regard—that is my figure—however, whether the figure is 90 billion or 85 billion, it is a lot of money.

The industry is responsible for 1.4 million jobs. As we have heard, domestic tourism accounts for 80 per cent of the value of the industry, but there has been little growth in the domestic tourism market in the past decade, whereas, although there have been ups and downs, inbound tourism is growing significantly year on year through the UK. This is an area which needs attention, especially right now when the weakness of sterling makes Britain an even better and more attractive tourist destination.

When we debated this issue in November 2005, I commented that it was a sad reflection on this Government that such an important industry did not merit a government department to administer and assist it, nor did the department which looks after it include the word "tourism" in its title. I find that incomprehensible. Nothing has changed and it has been only too obvious that the Government have not regarded tourism as a really important part of the UK economy: that is, until, perhaps, earlier this month when the Prime Minister attempted to promote British tourism at a hastily organised summit in Liverpool, during which he rightly argued that we should weather the economic downturn by choosing a domestic rather than an overseas holiday this year. Why has it taken a recession for the Government to realise the value of the British tourism industry? As my noble friend Lord Inglewood said, many people will not take holidays at all this year, but the domestic tourism market should take advantage of those who will not want to go abroad.

The difference between the amount spent by Britons on holidays abroad and the amount spent by overseas visitors to the UK has increased from 4.7 billion to around 19 billion since Labour came to power. What recent steps have the Government taken to reduce the tourism deficit in the UK? In the light of the economic situation, surely the Government should do everything in their power to persuade Britons to stay at home and to encourage more overseas visitors to make the trip here.

Yet, in October 2007, the Government announced that VisitBritain would have its funding cut by 16 per cent as part of the then Chancellor's Comprehensive Spending Review. Does the Minister really think that cutting the budget of the organisation responsible for marketing Britain around the world makes commercial good sense just four years ahead of London hosting the Olympic Games? Is he aware of the response by my honourable friend Jeremy Hunt, the Shadow Secretary of State for Culture, Media and Sport, to the Prime Minister's recent speech on tourism? He said:

"Instead of lecturing the tourism industry, Gordon Brown should answer one simple question: why has our share of international tourism declined by 10 per cent since Labour came to power?".

Can the Minister explain that satisfactorily? If one compares the UK tourism growth rate to the global average, we underperform by close to 5 million visitors to the UK each year. When will the Government begin to give the tourism industry some kind of priority and take it seriously?

We have heard about the Olympics today, which will provide London with a once-in-a-generation opportunity to market this city around the world as a tourist destination. Given that the Games are estimated to cost at this moment 9.3 billion, what are the Government doing to ensure that the full potential of hosting the Games is realised in terms of boosting the tourism industry? What are they doing to assess and minimise any threat of terrorist attacks during the Games, which could impinge on the wider tourist industry? It would be an enormous wasted opportunity if the fear of terrorist attacks, combined with the perceived overcrowding in London because of large numbers of people coming to the Games, put regular tourists off coming to this country.

Some years ago, in your Lordships' House, I made a plea to the Government to encourage riparian authorities to follow up some of the good work done in recent years on improving facilities beside and on the River Thames. The Thames flows right through the greatest tourist destination in the country, yet it is lamentably underused as a tourism resource, especially if one compares it with the Seine. What resources and encouragement have the Government given over the past three years to develop the tourist potential of the river and all the valuable heritage sites that lie along it, described a few years ago as, "the string of pearls"? Indeed, what will the Government be doing in the next months and years to exploit this great river?

The Conservatives believe that there should be a Minister dedicated solely to tourism. We would set up a working group of the Ministers of those departments which have an impact on the tourism industry to review its structure and the different roles played by the RDAs, the Visit organisations and local authorities.

Much is right about the tourism industry; it is brilliantly organised and remarkably resilient when bouncing back from hazards. It is poised and ready to expand to meet demand. The Government should find some way to boost the activities of VisitBritain and other organisations in the future. In the mean time, I look forward to hearing the speech of the noble Lord, Lord Carter. Perhaps he will surprise us with some new initiatives.

3:36 pm
Photo of Lord Carter of Barnes

Lord Carter of Barnes (Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Labour)

My Lords, I hope not. I, too, thank the noble Earl for raising this topic in what has been an absorbing debate. As someone born, raised and educated in Scotland—originally from Beith, not far from the noble Earl's rather fine castle—I share his view that this is a critically important industry. He and other noble Lords demonstrated in their comments that while some people love London, and I count myself among them now, it remains the case that Glasgow is still "Miles Better", as they used to say in his part of the world. I enjoyed his call to arms on this question. I also take the admonishments and I shall try to answer some of them. Moreover, if as a fellow Scot I am allowed to, I should like to place on the record the House's appreciation of Scotland's greatest poet on the 250th anniversary of his birth. As I listened to the noble Earl I racked my brain for an appropriate verse with which to respond to him. The best I could come up with is:

"His locked, letter'd, braw brass collar

Shew'd him the gentleman an' scholar".

The importance of this sector has been made clear in the debate. It is interesting that what is an emerging sense of optimism in these stark economic times also means that debates are looking at other sectors. In my full-time day job as the Minister for Communications and Technology, we have another such sector; one noble Lord asked whether we could think of any sector other than tourism that could possibly step up to the plate as a growth opportunity for the UK economy.

I felt that a number of noble Lords rather flippantly criticised the Government for not including "tourism" in the title of the department. I have jotted down what I think the name of the department would be if we included every one of its responsibilities. At the least, the department would require rather large business cards and probably take even longer to answer the telephone than is currently the case. But that should not be taken as an indication of what the Government think of this important sector. We have a Minister for Tourism, my honourable friend Barbara Follett, and we have demonstrated in numerous different ways that this is a critical industry. The current circumstances may put it into sharper relief, and that could be a virtue from which the industry can benefit. I make no apologies for that.

The industrialisation of tourism is a prize that could be ours, and that is waiting for the taking. We have come a long way since "Fawlty Towers" epitomised in people's minds the traditional resort hotel with the immortal words, "Manuel will take you to your room—if you're lucky".

The noble Earl referred to the comments of Christopher Rodrigues. I think he was misquoted. The point he was making is that we need to avoid being seen as a destination of bad service and as "grumpy Britain"; he was not making a comment about the current state of the industry. While I know the noble Earl was making a slightly jocular point, it is unfair to suggest that there is a service apartheid between the Scots and the English, or even the Scots, the English and those from Wigan.

The service ethic in this country has transformed itself in the past 20 to 30 years. There may well be valid points to make about comparative standards with other countries in the world, and valid points have been made today about the professionalisation of service as a career option for long-term occupation and the available rewards that go with it, but, on any measure, for those of us who have been holidaying and vacationing—and many in the House, I hope, have been holidaying for longer than I have—in this country, the opportunities afforded are remarkably improved.

The noble Earl raised a question about the definition of tourism. I was intrigued by the notion that one could be a tourist if one is absent from one's house for more than eight hours. On that basis, I, like many noble Lords, am a tourist in my own household. However, it raises an interesting question about how we measure the industry, and I shall reprise some of the comments made to try to scale the industry that we are talking about before addressing some of the other questions that have been raised.

The noble Lord, Lord Clement-Jones, referred to the Deloitte study—the framework review—and used that to quantify the industry. As it stands, tourism is the fifth-biggest industry in the economy and our tourism, hospitality and leisure industries represent all kinds of businesses, from the multinational hotel corporation to the individual boutique, from the stately home to the local visitor centre and the local village museum. We have much to showcase, both to visitors new to our country and to the large numbers of us who increasingly will choose to holiday at home. I have been a regular holidayer, both abroad and at home, and I would say that the quality of the seaside attractions in this country, the quality and cleanliness of the water, the resorts and facilities on offer have improved beyond measure over the past 15 or 20 years.

I share the noble Lord's view that, notwithstanding the disruption it may bring to landowners—which Defra undoubtedly needs to take into account—the opportunity to make our coastal path more accessible and more of a route of attraction, to allow more people to take a journey around our kingdom, is to be grasped with enthusiasm.

As many noble Lords have said, we can be tourists in many ways—overnight stays, short trips, business tourism, long vacations, weekend breaks and tourism surrounding sporting activities, as the noble Lord, Lord Addington, pointed out. The wealth of our arts and heritage provides a great attraction to both the international and domestic visitor.

I was, for all intents and purposes, raised in Edinburgh, educated in Aberdeen and have lived in London, and throughout the various roles and jobs I have had I have found myself in different cities. Noble Lords will forgive me if they take it as a nakedly party-political point, but in the past 10 or 15 years the quality of our civic centres has been transformed. If you travel round this country—to Manchester, to Liverpool, to Leeds, to Newcastle, to Bath, to Bristol, to Edinburgh, to Glasgow—you will find that these cities have a sense of purpose, civic pride and quality of attraction, and a sense of themselves, which is unrecognisable from where we were 10 or 15 years ago. Some of that has been through investment in regeneration schemes; some has been a function of investment from the lottery; some has been a sense of reinvention of industry in the locations which has made them more vibrant centres; and some has been a function of devolution and a greater desire in people to stay where they are rather than head south to London.

The importance of the tourism and hospitality sector to the well-being of this country cannot be overstated. We can debate whether it is possible for us to get to the 100 billion target by 2012 or whether we could take the sector to being the fourth or third-largest sector in the economy but, needless to say, the Government are seized of its importance. Having a Minister focused on it is of value. I take the gentle criticism that Ministers, departments or perhaps some combination of the two reach for reviews, followed by strategic reviews, followed by further analysis, followed, hopefully, by departure to a new post. However, it is fair to say that the framework review in this sector has been beneficial; indeed, the noble Lord, Lord Clement-Jones, was using it to try to pin me on five or six questions, which I shall return to in a second. These things have value.

The noble Lord asked whether there was value in greater cross-government working in this area. We believe there is, and earlier this year my colleague announced that a joint ministerial committee would look at the issues that touch multiple departments in order to get greater co-ordination across government. We have floated the proposal of an advisory council. We can debate whether that council has enough scale, reach or stature, but the principle of having the individuals who represent and work in the industry advising a dedicated Minister on a regular basis is a sensible proposal, and one that has merit.

A number of contributions today referred to the national tourism summit. It is harsh to describe it as "hastily arranged"; in fact, it was rather well arranged and very effective. If any noble Lords have engaged with people who were at it, they will have found that there was a general view that this was an appropriate time for the Prime Minister, the Secretary of State for Culture, Media and Sport and the Minister for Tourism to firmly underscore the importance of the sector, outline the initial findings from the framework review—we have made it clear that we will respond formally to those findings on 11 February—and lay out some support for other areas of activity.

Some noble Lords have raised the question of transport infrastructure and whether London is overdominant as a gateway into the United Kingdom. London is undoubtedly the primary point of entry into the UK, but different parts of the UK benefit in equal measure. The spread of the touristy industry across the country continues to grow. The Government have, somewhat controversially, supported the third runway at Heathrow. We have invested a further 6 billion on increasing capacity on the roads. We have commissioned and partly funded a further study into High Speed 2 to see whether additional high-speed rail services would be of value between London and Scotland, to increase connectivity. We recognise the role of infrastructure as a way of feeding the tourist industry around the United Kingdom.

The scale of the challenge facing the industry from the global economic downturn is considerable, and I do not wish to ignore that, but we should focus our debate not on the parlous state of the industry—it is not in a parlous state—but rather on the opportunities afforded to it. Liverpool has been referred to on two or three occasions. The city has forged a stunning success from its year as the UK's European Capital of Culture. Many noble Lords—particularly, I suspect, the noble Earl—will recall Glasgow's success as the European Capital of Culture, but Liverpool has gone slightly further. It has quantified that success, and the numbers are impressive. Liverpool's tenure as Capital of Culture generated an 800 million boost to the regional economy. The city welcomed 3.5 million first-time visitors, 25 per cent of all its visitors, generating 176 million alone in tourism spending. A record 1 million hotel beds have been sold in the city, with average occupancy rates hitting nearly 80 per cent. The programme also helped generate 15 million visits to cultural venues. The Tate Liverpool and Merseyside Maritime Museum each attracted more than 1 million people for the first time, and I could go on.

If Europe is ready to learn from Liverpool—in many instances, it appears that it will—then so must we be. The key here is that people are still willing to spend on the right product and high-quality attractions so long as they can be assured of their value for money.

The noble Earl, Lord Glasgow, and two other noble Lords pointed out how increasingly competitive the tourist market was and asked whether we could explain why our market share was changing. It is changing because the market is infinitely more competitive than it ever was. The number of emerging and developing countries coming into the market increases; the quality of their product is increasingly impressive. We should not ignore that, but recognise that the number of players in, and supply of product to, the market are increasing. That makes it a more difficult market in which to compete.

The noble Lord, Lord Addington, raised sporting tourism and its opportunity to raise the bar and set a standard from which we could learn and drive further activity. The Olympic and Paralympic Games are clear examples of that. There are others, too. In 2009, we will have the Ashes; in 2010, we will have the Ryder Cup; in 2011, we will have the Badminton World Championships; we are bidding for the Rugby League World Cup in 2013; in 2014, Glasgow will host the Commonwealth Games, and Scotland will host the Ryder Cup; and we may conceivably host the football World Cup in 2018. The Government have given significant resource and commitment to each of those sporting bids and events, because they represent fantastic opportunities to showcase our towns, cities, regions and nations.

The Government want our sporting and cultural bodies working ever closer with the public and the private sector, and we want the tourist bodies maximising the economic benefits for our regions. We believe that this country offers excellent value for money, and it is clear that the current position of our currency is an attraction both for those people visiting this country and those of us who choose to holiday at home rather than abroad. I am not sure that I feel entirely comfortable with the notion of the Government encouraging, or perhaps even going further and instructing, people to holiday at home. That is a legitimate job of the tourist industry; I am not sure that it is a legitimate role for government. Needless to say, the current situation makes the country ever more attractive.

The Government have, however, allocated an additional 6.5 million investment for the VisitBritain and VisitEngland "value for money" campaign. The noble Baroness, Lady Valentine, raised the valid question whether that is sufficient. Once upon a time, I used to spend my time encouraging people to get returns from marketing investment and we could debate whether the available funds for marketing are as large as we would wish them to be. Suffice it to say that we will continue to keep those amounts under review, but the Government need not be the sole provider of funding. The RDAs, which the noble Baroness also raised, can be a source of funding. We saw earlier this year the north-west RDA announce that tourist boards across the north-west will be given a 20 million boost to help them through the current economic slump.

Photo of Lord Lee of Trafford

Lord Lee of Trafford (Liberal Democrat)

My Lords, did the Minister say that the Government have agreed to fund the "value" campaign to the tune of 6.5 million?

Photo of Lord Carter of Barnes

Lord Carter of Barnes (Parliamentary Under-Secretary, Department for Culture, Media & Sport, Parliamentary Under-Secretary, Department for Business, Enterprise & Regulatory Reform; Labour)

My Lords, I said that the Prime Minister announced on 8 January that VisitBritain and VisitEngland will launch a "value for money" campaign, involving an investment of 6.5 million.

The noble Lord, Lord Clement-Jones, raised the framework review. As he knows, the headline findings of the framework review were published at the Liverpool summit. They included redefinition of VisitBritain's role, enabling it better to support the work overseas of its partner agencies in Scotland and Wales, and the creation of a new English tourism lead body. We will publish the full findings of the review, which will be presented on 11 February.

I turn to the specific questions that noble Lords have raised that I have not answered to date. The noble Earl, Lord Glasgow, asked about overseas spend. There is growing evidence that the exchange rate may be encouraging greater spending; indeed, the initial results on global refunds reveal a 55 per cent rise in December in sales to visitors reclaiming tax. That is an interesting and encouraging statistic.

I hope that I have answered the questions from the noble Lord, Lord Pendry, about joined-up government and from the noble Lord, Lord Lee of Trafford, about the tourism advisory council. On the question of double summer time, I am profoundly aware that for those in the tourist industry it is a key question. As a Government and department, we are aware, too, that while the tourist industry may favour this change, many sectors in our communities are strongly opposed. We have said as a department that we will keep this under review as the evidence is presented to us.

The noble Lord, Lord Greaves, raised the point about coastal paths, which I hope I have addressed.

Finally, on the skills point raised by the noble Lord, Lord Addington, we absolutely agree that customer service is the key determinant. I have a particular view, which I share with others, on how important that is, not only in the tourist industry but in all industries. To a degree, this is a cultural point. As the noble Lord knows, the Government have made significant sums of money available as part of the national skills strategy, which is designed to target customer service as a vital area in which we recognise that improvement is needed. The Government have made nearly 500 million available annually for the tourism and hospitality sector, specifically to try to improve skills in this area.

Finally, while I would have no problems being the Minister for public conveniences, I share the noble Lord's observation that taking a leak in a public place in the United Kingdom is harder than it is in Paris. Perhaps that is something that he and I could take up later. I thank noble Lords for the debate.

3:57 pm
Photo of The Earl of Glasgow

The Earl of Glasgow (Liberal Democrat)

My Lords, I thank all noble Lords who have taken the trouble to take part in this debate. All of them have contributed something very important to it.

I also thank the Minister very much indeed for his charming and well researched answers. I am not totally certain exactly what he said at the end and whether the Government are going to take tourism more seriously and contribute more money. I hope that that is the case. I believe that he is passionate about tourism and will put pressure on his colleagues to ensure that tourism is given a higher profile in the Government, particularly at this time.

One thing that all noble Lords felt strongly about was the fact that the money given to VisitBritain to market Britain had been cut. I hope that the Minister will revisit that, as VisitBritain is so important to the tourist industry—and I hope that it might have its budget increased instead of decreased.

Motion withdrawn.