Orders of the Day — Development of Tourism Bill

Part of the debate – in the House of Commons at 12:00 am on 27th February 1969.

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Photo of Mr John Nott Mr John Nott , St Ives 12:00 am, 27th February 1969

I start by asking, what is the tourist industry? It is important to define it before we start. Then we can discuss its problems, how its difficulties have arisen and what is needed to put them right. On these criteria, I want to judge the rather grandly-titled "Development of Tourism Bill" to which the President of the Board of Trade has given his procreative blessing and to which the Opposition Front Bench has given an ambiguous form of muted praise.

My impression is that the tourist industry is a complex jumble of service activities—travelling, accommodation, catering, transportation and recreation—which, taken together, make up a most important industry. But the complexity of the industry and its dispersal over so many different fields makes it essential, as my hon. Friend the Member for Eastbourne (Sir C. Taylor) said, to try to draw the various strands together into a more coherent whole.

This vital factor which the Bill neglects needs further discussion and debate. For if those who talk of British tourism are merely referring to the 900,000 beds in boarding house accommodation and the 185,000 hotel beds, such a definition would be too narrow.

The satisfaction or otherwise of our foreign visitors with the service trades, whether the trains run on time, the facilities at London Airport, whether visitors are treated as aliens on arrival here or as welcome guests—all these intangible items are as important as the question of the dripping taps, worn carpets or insufficient hotel bedrooms here and there.

The Bill is concerned mainly with foreign tourists, but we must remember that the 4 million foreign visitors each year have to be compared with the 30 million holidays taken by British people in the United Kingdom; and whether 8 million people should continue to decide to go to the South-West or to take their holidays on the coast of Spain, will always be of infinitely greater importance in balance of payments and in economic terms than whether we are able to encourage a few hundred thousand more Americans to visit Stratford-on-Avon, Edinburgh or Wales.

Since 1964 the Government have imposed on the general service trades which cater to, or represent directly, the tourist industry a discriminatory tax of £400 million, to which hotels and boarding houses are contributing £30 million. The Government have drastically reduced, if not removed completely, the tax allowances which these establishments have had, it has also imposed an additional £2,000 million in tax on the country as a whole, and it has neglected, on any reasonable view, communications to the holiday areas.

Each time there has been a crisis in the tourist industry the Government, having first created it, have then responded late with a restrictive remedy. The payments crisis and the growing tourist deficit in 1966 produced the travel allowance, which was damaging to sterling and undignified for every British person travelling abroad. Acute shortages of seasonal hotel accommodation produced the hotel loans scheme with no one to administer it and application forms of such complexity that it became a farce.

Now the latest move is this pathetic Bill, which will channel an additional £8½ million of new money into the tourist industry as compared with the extra taxation of about £400 million on the service industries through Selective Employment Tax, and probably about £50 million specifically on hotels and restaurants if we use the narrower definition of the "tourist trade". That figure is composed of £30 million for S.E.T. and £20 million, which is about what they have lost in tax allowances since 1964.

As I understand, the new Authority will receive about the same as the B.T.A.—probably about £3 million. Another £500,000 will be available for the administration of the Scottish and Welsh Boards and this will be in addition to what the Highlands and Islands Development Board is now receiving for the development of hotel accommodation in Scotland and of the Scottish tourist industry.

I do not greatly mind the Government having their policy dictated to them by the Scottish Nationalists, but I do object to my constituents having to foot the Bill. At present, the South-West Travel Association gets an indirect grant from the Government of about £12,000 a year. And yet it yields in holiday terms nearly as much as the whole of the Scottish and Welsh tourist industries put together. I have no fundamentalist objection to transfer payments being made from my Cornish constituents to Scotland for their regional development, but if the money is for regional development than let it be stated as such. Cornwall has an important holiday trade, yet the aggregate income is lower than in the Scottish Highlands and in Wales. I see no reason, therefore, why my constituents should have to make a transfer payment to pay for Scots hotels. That is wrong. The balance of the Bill, as my hon. Friend the Member for Tiverton (Mr. Maxwell Hyslop) said, is incorrect.

I come now to some specific objections to the Bill. I want to quote from the British Hotels and Catering Association and the Catering Association of Great Britain. These bodies, the largest in the tourist trade, find these proposals …not only quite unnecessary but quite unacceptable ". They express the hope that all Members will oppose them. I am interested to hear that the Scottish branch of these great associations has also objected to the Bill and asked Members of Parliament to vote against it.

The Associations claim, and rightly, that the abolition of the B.T.A. is wrong. The Minister said that the B.T.A. can continue if it wishes to do so, but since he is removing 80 per cent. of its income and giving it to someone else he is not giving that body much opportunity to continue, and he knows it. The B.T.A. has been a voluntary body, composed of experts drawn from every part of the tourist industry. It has collected voluntary subscriptions. Why does the Minister want to get rid of something which has worked perfectly well without much administrative burden on the public purse and replace it with a statutory board?

Then there are these special projects. What are they to be? Are they to be ski resorts for the Swiss on Snowdon, or are there to be projects in Aberdeen to encourage Mediterranean males to go there for the sun? Presumably these special projects will not be economic ones, because otherwise the industry would produce the facilities themselves. They are one more example of the false belief that Whitehall, or Welsh or Scottish bureaucrats, appointed by a Minister are better able to judge the needs of an industry than those who practise in that industry, namely, the hundreds and thousands of large and small hoteliers and guest house owners whose livelihood and savings depends upon the making of a correct economic judgment.

Let me transfer my affection for one moment to my own Front Bench. It is nice to have three speakers from the Front Bench here today and I am delighted with it. I do not mean, in saying that, any disrespect to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) or to my other hon. Friends who have spoken. They have shown great interest in this subject and I look forward to hearing what my right hon. Friend has to say.

If I was a Scot I suppose that I would not want to vote against the Bill, even though the Scottish Branch of the Association I referred to earlier would have asked me so to do. But I think that I would have to examine my conscience, as a Conservative, in arriving at that view because for many months my party has stood out firmly against discretionary industrial grants, the proliferation of Government appointed boards, and the escalation of Government expenditure of a discriminatory kind. Yet now we are proposing to override all these principles in case our vote against the Bill should be misunderstood.

In my view, all great political parties are in the business of educating the public to their views, not just following conventional opinion, in case they are misunderstood. As for the suspicion that the tourist industry will not understand a vote, this is a typical piece of politician's arrogance, the type of paternalistic view which led the Macmillan Administration to become increasingly interventionist in our industrial life. The tourist industry knows where its interests lie only too well. Most hoteliers know just as much about the Bill as my hon. Friends or myself. They can form their own judgment on it and we should not be frightened of our vote being misunderstood.

What should the correct policy for my party be? Having been rather critical of the Government, having perhaps made some implied criticism of my party's attitude towards the Bill, I ought to give some answer. Our policy should be crystal clear. First, we should abolish all discrimination in the taxation system, which involves the ending of S.E.T. Secondly, we should recognise that the tourist trade is a great industry and should agree to treat it on a comparable basis with the manufacturing trades.

Whatever may be our policy on investment grants for industry we should treat the tourist trade in the same way. No more, no less. If manufacturing industry receives no investment subsidies then the tourist trade should not receive them, either. If manufacturing industry receives some kind of help, then my party's policy should be to give the tourist industry the same. Moreover, we should place the tourist trade on a comparable basis with manufacturing industry when it comes to capital allowances, initial allowances and the rest.

We should treat this as an important industry. We should step up the promotion and publicity of Great Britain overseas and do that through the B.T.A. which is doing very good work already on a voluntary basis. Why get rid of it when this is widely recognised? Then we should channel funds, if the Government have some available for regional publicity, broadly in proportion to the relative contribution which the different parts of the United Kingdom are making to the holiday industry, through the existing voluntary bodies.

I liked the point of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), that in channelling funds for publicity through local regional bodies we should not give them a lump sum but should say, "You can have X per cent. of what you raise by voluntary subscription." This will give them an incentive to raise money by subscription from their own hoteliers and from local authorities in the area.

Lastly, we should insist that the B.T.A. is comprised of members representing, on a fair and impartial basis, the different holiday areas of the United Kingdom and the different industries which go to make up the tourist industry as a whole. Why not give the B.T.A. statutory powers to levy precepts for its work abroad. This would be perfectly reasonable. Give it borrowing powers, too. If it can levy precepts, give it borrowing powers as well. I see no radical objection to such a course.

I suggest a basis of no discrimination, no discretion, no special projects; but equal treatment for the tourist industry with every other trade, which up to now it has not had.