The Economy

Part of Council Tax Rebate – in the House of Commons at 9:03 pm on 31st March 2009.

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Photo of Tobias Ellwood Tobias Ellwood Shadow Minister (Culture, Media and Sport) 9:03 pm, 31st March 2009

Perhaps I should have declared an interest. Ironically, British tourism is doing well because people can no longer afford to go abroad and they are looking for domestic destinations. That is why I ask Ministers to consider what we can do to enhance that situation.

The industry is the fifth largest in the UK, and I do not think that the House fully appreciates that. It is worth £114 billion a year to the economy, so it is twice the size of the IT services sector and four times the size of the agricultural sector. It has 2.6 million jobs and is responsible for one in four new jobs. It is also helping to compensate for the decline in other sectors. With 13 million visitors to the UK every year, it is a sector worth investing in.

We can all be proud of the heritage that we offer, including museums, theatres, countryside, villages, towns and sporting events. There are myriad tourism opportunities in the UK that are unique to this country. Oxford cannot be replicated in Dubai. The Tower of London cannot be reproduced elsewhere. What we have here is special, and we need to promote it. I fear that we are not doing so.

There are some basic failures in our approach to tourism. The first is the lack of leadership. Tourism is not properly represented in the House of Commons. Responsibility for tourism is divided up between various Departments. For example, the Department for Communities and Local Government deals with fire regulations for hotels and bed-and-breakfasts. The Home Office deals with visas. The Department for Culture, Media and Sport deals with a small percentage of connections with VisitBritain, and the Department for Business, Enterprise and Regulatory Reform looks after small businesses. There is no forum to bring those voices together to ensure that legislation created in other Departments does not have a knock-on impact on the tourism industry. That is exactly what happens at the moment.

Visa costs went up about a month ago, with no consideration and no communication with the DCMS. The cost of our visas now means that we get about one fifth of the number of oriental visitors that France or Germany get. That means that we lose a lot of revenue to the Exchequer.

Let me illustrate the importance of tourism. Every pound that is spent by VisitBritain abroad brings £36 of investment into the UK. I ask hon. Members to show me another Department that has that return on an investment—paying £1 and getting £36 back. That would suggest that in these economically difficult times, particularly while exchange rates are what they are, we should be considering putting more money into our British tourism industry and, unfortunately, that is not happening.

One would think that when we are about to host one of the most important sporting events in a generation, the Olympic games, we would take advantage of that fact and harness the marketing opportunities. However, the Government are not spending a single penny on marketing to take advantage of that once-in-a-lifetime opportunity. Surely that must change.

Some other basic issues are hindering our tourism industry and preventing it from flourishing in the way that it could be. We have a confusing system of structures—an issue caused by the promotion of the regional development agencies. We have had 10 years in which England has had no strong voice to represent itself or to work with VisitScotland or VisitWales. Things are changing. The Government have woken up and recognise that the RDA system does not work for tourism. I am pleased that we are moving that way, but it has taken a decade for us to realise that.

We then have the problems to do with local council support for tourism. Councils in places such as Lincoln and the Isle of Wight are closing their tourism departments because that saves money. They invest that money in other departments, knowing that they will get financial rewards from Government, because such activity is financially incentivised. Surely that cannot be the way in which local authorities should support our tourism industry.

The tourism industry is large, as I mentioned. Some 200,000 small and medium-sized businesses are involved in the industry, including everything that one can imagine from the seafront arcades to the British pub. That is another example of where the Government could surely provide more support. We are all aware of the facts; we get all the literature from the organisations. Some 36 pubs close every week simply because of the duties and the taxation regimes that have been imposed on them, which are archaic. VAT has gone down, but duties have gone up. Will the Minister explain whether, when VAT goes back up, the duties imposed on alcohol will go back down? I suspect that the answer will be no.

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