---

Tourism

My Lords, since I became a Minister I have had the pleasure of taking part in two House of Lords debates on tourism, and the significance of the sector has been made very clear to me. The contributions made today and back in January have all been eloquent and absorbing. As I think we all know, the world continues to change at a sometimes rather alarming and challenging pace. I would like to join other noble Lords in congratulating my noble friend Lord Pendry on securing this important debate. I know from my day job as a sectoral Minister how challenging it can be to ensure that a sector’s perspective is heard across government. Debates such as this one help to air the issues in a very constructive fashion. Britain, like many countries, continues to battle the effects of the economic downturn, but the outbreak of swine flu and the associated media coverage reminds us all that the economy is not the only factor influencing the prospects for tourism in 2009 and beyond. 2009 is a very important year as the effects of the downturn become fully evident and today’s debate is a timely reminder that tourism—whether it is the third, fourth, fifth or sixth largest industry—is integral to the British economy and its recovery. My noble friend highlighted that this year marks the 40th anniversary of the Development of Tourism Act 1969, and he rightly took the opportunity to underscore Anthony Crosland’s contribution in that legislation. This debate therefore presents an ideal opportunity to take stock of the developments in tourism over the past four decades and to see what lessons we have learnt and what more we need to do. I confess to being slightly chastised by the noble Lord, Lord Lee, on my flippancy in responding to the previous debate. But in listening to some of the contributions today I was reminded of Bill Bryson’s description of national character. He certainly knows more about travel and tourism than I do. When asked what the difference was between the United States and the United Kingdom, he said: "When you wander round the United States and ask people how they’re doing, they say, ‘Pretty good, thanks’. When you wander round the United Kingdom and ask people how they’re doing, they say, ‘Mustn’t grumble’". The consensus view in today’s contributions has been that the Government have done little or nothing for this industry; that it is in a woeful position; that there is a crisis of marketing investment; and that something must be done to avoid a clear and present crisis. There were some exceptions to that consensus, such as the speech of my noble friend Lord Rosser. I was also reassured by the knowledgeable contribution from the noble Baroness, Lady Valentine, about the resilience of the tourism industry and the commitment and performance from London. A number of noble Lords have outlined the contribution that tourism and hospitality make to the national economy: around 8 to 9 per cent of our GDP and 2.7 million direct and indirect jobs, some 8.2 per cent of the workforce. Those are remarkable figures. We have a world-class tourism product and that quality is now available, as many noble Lords have highlighted, for significantly less given the value—or competitiveness, depending on your perspective—of the pound abroad. As a number of noble Lords have highlighted, that product includes breathtaking scenery; our dramatic coastline; increasingly outstanding food and drink; our incomparable history and heritage; our museums; and our hosting of major sporting events, both currently and over the forthcoming decade, such as the Olympics and the Champions League. It is right to say, as the noble Lord opposite did, that the tourism customer is growing ever more sophisticated and has ever more choices. The competition from overseas—notwithstanding the current position of sterling—and cheaper travel have developed a demand for a higher quality product and greater value for money. VisitBritain is responsible for promoting Britain as a world-class tourist destination. It has representatives in over 36 countries around the world and has recently expanded into India and China and throughout eastern Europe and south-east Asia. Provisional figures for 2008 indicate that overseas residents made 32 million visits to the United Kingdom, down by just 2 per cent on 2007. But they spent £16.5 billion, which, before adjusting for inflation, is 3 per cent up on 2007. As a number of noble Lords have commented, when times are good, tourism is easy to ignore, and we sometimes take our successes in tourism for granted. Times are now immensely challenging for the industry, and despite the weakness of the pound, the latest figures that I have seen, from March this year, show that the number of visitors from the United States, the euro zone countries and the rest of world was decreasing comparatively, therefore increasing the importance of the domestic market. However, as my noble friend Lord Davies has highlighted, there are encouraging signs for the summer of 2009 that people will choose to holiday at home. Anecdotal evidence suggests that, for example, the holiday park sector is going to do well this year following indications of good visitor numbers in the attractions sector over the Easter period. So, all is not doom and gloom. The standard of our hotels and bed-and-breakfasts continues to improve apace, and the wealth of attractions that the British brand offers is second to none, but there are challenges. I know that many tourism businesses across the United Kingdom are doing outstanding work trying to compete in and combat the economic downturn. The Government understand that that is not easy, particularly as we face up to what will be a difficult fiscal period. How should we combat those challenges and what is the role of the Government? In the first instance, effective management of Britain's tourism industry resources will help us emerge from the downturn in good shape, ready to take advantage of the recovery when it comes. As discussed during our previous debate and again today—I was pleased to hear the noble Earl, Lord Glasgow, endorse this—following the Comprehensive Spending Review, the DCMS asked VisitBritain to carry out a strategic review of British tourism. Strategic reviews often come in for a bad name, but I share the noble Earl’s view that that was a quality piece of work to ensure better co-ordination of funding, strategy and implementation of our approach to tourism as a sectoral industry and to try to identify ways of improving efficiency and effectiveness where the public sector touches the private sector for tourism. That was published by VisitBritain on 11 February and set out recommendations aimed at better co-ordination of the significant public investments made centrally, regionally and locally. The review proposals also involve the fundamental restructuring of VisitBritain and developing the role of Visit England, which will market England in a more focused partnership at national, local and regional levels. In welcoming the review's findings, the Government emphasise their determination to forge a closer partnership with the tourism industry to minimise the impact of the downturn and to try to ensure that we are better positioned to exploit the opportunities offered by the recovery, when it comes. I am glad that the review proposed many things that the Government are already doing, and a number of things that we have subsequently implemented. If I am allowed two observations, there seems to be an excessive, if understandable, focus on the unwillingness to move on the financing of marketing. As I said, in my day job, I am the sectoral Minister for broadcasting and the media. This will not come as a surprise to any noble Lord, but I can tell the House that for much of the past year, I have spent my life in meetings with media companies who tell me that today, advertising and marketing prices are cheaper than they were in 1992, and that the advertising and media market is currently suffering between a 30 per cent and a 45 per cent reduction, depending on which form of media you are buying. The value that you can extract from the marketing pound has never been more attractive, if you are a buyer, and less attractive, if you are a seller. On the specific question asked by the noble Earl about the digital divide—a subject about which he is right to observe that I have some knowledge and feel passionate—the Government have already committed to delivering a universal broadband service for the entire country, have already identified a universal service fund, and seek to deliver that by 2012, making us the leading country in the world in delivery of universal access to broadband at average-speed rates of 2 megabytes and above, which are attractive both to the domestic user and to the small to medium-sized enterprise looking to offer home or domestic-based connectivity and promotional opportunities. To turn to the things that we are doing, the Tourism Advisory Council has recently been formed as part of the Government's commitment to support the UK's fifth largest industry. The noble Lord, Lord Lee, was right to say that the tourism summit in Liverpool was dripping with Ministers—although, I must confess, not me. The Prime Minister made it clear at the summit that he was extremely keen for a strengthened partnership between the Government and the tourism industry. That is why we set that group up. It will meet three to four times a year. I will be delighted to provide the noble Lord in writing with details of the forthcoming dates of those meetings. The remit and purpose of the advisory council is to ensure that, during these times, we can receive timely and accurate information directly from leading tourism businesses so that we can identify areas that need action and highlight ways to move forward. As the noble Lord and others will know, the council is deliberately formed of a group of high-level industry executives, including members of organisations such as Virgin Atlantic, Eurostar, Travelodge and Center Parcs. The group is designed to provide direct and regular input into government and to identify how Ministers can support the sector. The Tourism Advisory Council is only one of a number of regular groups giving the industry access to government. Other regular meetings include meeting the Tourism Alliance, the Tourism 2012 ministerial advisory group, the skills implementation group and the tourism leads at each of the RDAs. Another recommendation from the tourism summit was the creation of an interdepartmental group of Ministers. I defer to the noble Lord’s comments on the challenges of interdepartmental ministerial groups being delivery vehicles rather than merely discussion events. This group first met at the beginning of May—so, relatively recently—and will meet four times a year. He is correct to identify that this group will be chaired by the Minister for Tourism in another place. I hope that my honourable friend will not be offended if I describe her as a forceful presence in the chair. So, notwithstanding her Whitehall ministerial status, I do not believe that her occupancy of the chair is a limit on that interdepartmental group’s ability to deliver. As a number of noble Lords have highlighted, tourism is often dependent on a range of government departments not making negative decisions as well as making positive ones. The future success of Visit England will largely depend on its capability to form and maintain partnerships with regional development agencies and local authorities. The evolution of Partners for England is vital to that end. The Government welcome the group’s progress so far and its future aims. We are confident that these arrangements will make for strengthened leadership and better representation of private and public sector stakeholders and provide a more robust and more responsive vehicle to grow and sustain the industry in the long term. The noble Viscount, Lord Montgomery, made a point about marketing England domestically. Despite a tough Comprehensive Spending Review round, the Government are committed to providing £130 million between 2008 and 2012 for marketing Britain overseas and England to the British. In addition, between £3.3 million and £3.5 million is provided annually to the regional development agencies for tourism support. Again, as my noble friend Lord Davies highlighted, this industry has a vertical contribution to make to jobs. For that reason, the Government have also made a significant investment in skills in relation to the tourism industry. Last year, we announced that we would focus an additional £210 million on the sector through the Train to Gain scheme and through learners who will be going through programmes approved by the National Skills Academy for Hospitality. In addition to this, the Government have committed £350 million to help small businesses to get the training that they need to get through the economic downturn. This is an investment across the country. London, as the noble Baroness highlighted, is central to the visitor economy as a destination in its own right and, indeed, as a gateway route to the rest of the country. I recognise that there has been concern about the DCMS’s decision to discontinue its bilateral funding agreement with the GLA. This is, for the record, no reflection on the work of Visit London or the LDA, which we respect and value greatly. It is a matter of simple financial constraint and the requirement to make difficult choices, which our London partners have also encountered. We informed the then London mayor, Ken Livingstone, of this possibility last March, in order to give the GLA at least a glide path of more than a year to prepare for this eventuality. We are not disinvesting from tourism. We will be reinvesting this money to support the recommendations of the British tourism framework review and to maximise potential national benefits. Indeed, as I said in the last debate—as I recall, I was asked to clarify the source of these funds—VisitBritain and VisitEngland are currently running a major £6.5 million marketing campaign focusing on England and Britain as high-quality, value-for-money destinations, which will naturally benefit London. In response to the question asked by the noble Earl, Lord Glasgow, about cuts and whether we would revisit that issue, I have to say no. Following the Comprehensive Spending Review in 2007, the DCMS was required to engage with its sponsored bodies and to seek to achieve value-for-money savings. Our funding decisions are final. The department then commissioned a review of public sector support for tourism, which we have discussed, and we agreed with VisitBritain that, pending the outcome of the strategic review, we would have a one-year provisional funding agreement for 2008-09. As I say, £350 million a year is being invested in tourism at national, regional and local levels. That is a significant commitment. In line with the Prime Minister’s vision, which was outlined in the summit on improved partnership that was referred to, central government has increased its profile in relation to tourism in recent months. DCMS Ministers and tourism industry representatives attended a number of events during British Tourism Week, which ran from 23 to 29 March, both in London and the regions, to highlight the importance of tourism to the United Kingdom. The DCMS has continued to pursue its advocacy role across government and it is fair to say that this is producing tangible results for the industry, including some more tourism-friendly strategic planning advice for local authorities—although perhaps not as much as the noble Earl would wish—as a result of intensive DCMS-led discussions with the DCLG, the Tourism Alliance and other organisations over 2004. I have another day job as the Minister for Regulation and will respond in writing to the noble Earl on his question about historic houses and the appropriateness of the religious application of regulation, as I have some sympathy with his view. The noble Earl, Lord Caithness, asked about sustainability. One issue that is increasingly significant as we look to the future is the importance of a sustainable approach to tourism. Sustainability has never been so important as we face up to the impact of climate change. We all know that we have a clear and present responsibility to make sure that we act in an environmentally friendly way; tourism, given its size, can be no exception. Many tourism businesses across the UK are already doing outstanding work under the green agenda, but more need to do so and soon if we are to protect and value the world of the future. This will not be easy, particularly as we face up to difficult economic times. However, by adopting a more environmentally friendly approach to the management of resources, Britain’s tourism industry will be able to emerge stronger and more globally as well as domestically competitive. When the Government published the tourism 2012 strategy, we committed to developing a framework in conjunction with the tourism industry, which we published in March. It sets out six key points. First, we must minimise waste. Secondly, we must address the impact of tourism transport. Most holiday trips, as noble Lords know, are by car and plane, so we must address the attractiveness of convenience and cost by advertising special offers and making people aware of alternative forms of transportation. Thirdly, we must ensure quality and making holidays accessible to all. Fourthly, we need to improve the quality of tourism jobs, as the noble Lord, Lord Rosser, said. Fifthly, we need to improve the perceptions of the tourism industry and make it more attractive to new and more diverse, talented and skilled people so that they view careers in the industry as long term rather than just temporary. Sixthly, a healthy and sustainable tourism industry can help to maintain and enhance community prosperity and quality of life, so we must try to reduce the seasonality of demand by increasing occupancy in the shoulder seasons and encouraging off-season activities and experiences. A version of this framework document, Sustainable Tourism in England: A Framework for Action, has been sent to the House Library. Our national tourism strategy will therefore continue to focus on delivering a first-class welcome for our domestic and international visitors, providing high-quality product and accommodation for people to enjoy and improving the skills of the workforce, particularly in customer service and management. However, we cannot make headway in delivering these aims and a real and meaningful legacy from the 2012 Olympic Games and Paralympic Games without real commitment from the whole country and every region and without increasingly effective co-ordination with the RDAs and local authorities in particular. There is a real momentum right across central government. These debates are material to improving the importance of tourism in the policy discussions in government and there is an increasing and effective working relationship between the Department of Culture, Media and Sport and the Department for Communities and Local Government. We now have an unprecedented set of conditions and ideas knitting together to show what our sector can deliver to the local economy and to local communities. That is now being made clear in a commercial way as well as in a policy way. The Government intend to maintain a constructive dialogue with the regions, focused, as two of the contributions this afternoon highlighted, on delivery rather than just on discussion. I sense from the majority of the contributions this afternoon that there is not a unanimous view of the Government’s confidence in and optimism about the future of the visitor economy or about the Government’s programme of commitment. I recognise that, as indeed does my colleague in the other place. I would like to reassure noble Lords that neither in the Department of Culture, Media and Sport nor in government as a whole do we lack either vision or commitment to the importance of powerful industry sectors. The Government recognise that they need to concentrate on positioning the industry for recovery and exploiting future opportunities over the next decade. There are real issues, some of which have been raised in this afternoon’s debate. There are questions around better co-ordination across government. There are legitimate questions around the application of the planning and regulatory regime to tourism industries. There are undoubtedly questions over how fast we can deploy the improvements in our transportation networks that we know we need to make. I would say to noble Lords, however, that there has been significant progress. Institutional and organisational co-ordination is better than it has been. I genuinely believe that the overfocus on, verging on obsession with, the marketing budget is out of tune with the times and with the reality of what can be achieved with the money that is on the table and in the budgets of individual organisations. Last but not least, there is the significant capital, operating and marketing investment in the Olympic Games and the associated events. These are real opportunities. As I wander around this country to different centres and significant parts of the countryside, I rarely grumble about the quality of what is on offer.