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Budget Resolutions and Economic Situation

Again, my hon. Friend makes a powerful point. The Government must listen because people deciding to shift their money outside the country is likely to threaten our credit rating. The Government need to raise £158 billion of bonds annually in the next five years. That is a tall order with such a shadow hanging over our credit rating. I do not think that it can be achieved without better leadership and drastic action by the Government. Such action seems currently to elude them. In the few minutes that I have left, I want to consider an aspect of the economy that is close to my heart as Front-Bench spokesman on the subject—tourism and its contribution to the economy. It may seem an odd subject on which to focus, but it is the fifth largest sector in the economy. It is worth £114 billion and I understand that approximately a quarter of those in employment are somehow connected—directly or indirectly—with tourism. We do not do it justice or discuss sufficiently its contribution to the economy. The British tourism industry comprises 200,000 small and medium-sized businesses. It deserves our support, recognition and help. It is therefore not such an unusual sector to consider in a debate about the economy. What exactly is tourism? It links our seaside towns to our city centres, our country clubs to our town squares, the Lake district to the theatre district, the Ferris wheel to the roulette wheel and the museums in Kensington to the Munros in Scotland. The unique offering of all those things makes Britain exceptional. One cannot replicate that in other countries and that is why we are the sixth most attractive place in the world to visit. That accolade is not trumpeted enough. Tourism is also about supporting the small and medium-sized business. It is about the tax break on the furnished holiday let, the cost of the visa to enter this country, the price of air passenger duty and the scale of the red tape that faces the B and B. What can tourism do for the country? It has low barriers of entry—it is easy to get into tourism. There are favourable exchange rates, and a Deloitte & Touche report, which was produced not long ago, proved that for every pound VisitBritain spends abroad, it brings in around £25 to this country. That is not a bad investment. How many Departments can one give money to and then make more money from? Iceland is not a place that one might think of as a tourist destination—it is certainly not a place where one would want to invest one's money anymore—but as a result of what has happened to its finances, it is turning to tourism to mend its economy. It is trying to bring foreign exchange in by promoting and marketing itself in a way that it has not done before, and there are lessons for us to learn from that. It may shock you to learn that the House last debated tourism legislation in 1969, Mr. Deputy Speaker, and it is high time that such legislation was debated again. The tourism deficit is the difference between the amount of money that we spend abroad and the money that is brought here by overseas visitors. In 1997, the deficit was £4 billion, but that has escalated to £18 billion today. We are losing out: not enough money or people are coming to this country from abroad and we are not attracting people from this country to stay and holiday here. We need to address that so that we can keep that money in this country. The Department for Culture, Media and Sport budget actually increased by 60 per cent. in the past 10 years, but the tourism budget remained stagnant at £35 million. In fact, in the recent spending round by 20 per cent. What a shame, given that it is one of the few Government operations that can actually make money, as I said. Let us look at the Budget and how it ties in with tourism. As I mentioned earlier, national insurance has not helped at all. My hon. Friend the Member for Tatton illustrated the problems with the models that are proposed in the Budget to support small and medium-sized business. Business rates will be increasing as a consequence of the Budget, as will the small companies tax rate. There will be a fourfold increase in charges on businesses. In addition, as has been mentioned, the increase in tax on cider does not tackle the underlying problem of binge drinking, nor does it provide the support that is needed for responsible pubs up and down the country. The increase is like using a hammer to break a nut. It is not targeted, and once again, there is not enough discussion between the Treasury, the DCMS and the industry, and not enough understanding of how taxation can work to influence behaviour. To give another example, I met officials of the Tourism Alliance this week and a group representing caravan parks, which are a big part of the tourism industry. They told me that caravan parks are now required to have an alcohol licence in their flower shops, because some bunches of flowers come with a bottle of champagne, so that people can celebrate events. They need a liquor licence for that, which seems to be absolute madness—there is no sense at all. That needs looking at. On bingo and gaming duties, we have again seen a massive hammer coming down on the industry, which does not help seaside towns in any way. One hundred and ninety arcades around the country have closed in the last year alone thanks to the lack of support from the Government. They have tweaked the number of B3 gaming machines that are allowed, which has made arcades unprofitable, which is why so many are closing. Once they are closed, the boards go up, which has a ripple effect on the problems that seaside towns face. That brings me to the point of order that I made before the debate. I had the opportunity to grab the Minister outside the Chamber to ask him whether he was aware of the announcement made on Radio 4 today that the Government will give £5 million to support seaside towns. I have just checked, and there is still no more information on that in the Vote Office, yet the announcement was made on the radio. I plead to you, Mr. Deputy Speaker, and to the Minister that surely, if we are going to respect this House and if we are going to be allowed to debate those matters properly, we need to share information with hon. Members so that we can understand what is happening. I have no idea where this £5 million is coming from. I have a suspicion that it is actually regurgitated money, as is often the case—an old announcement conveniently re-announced—but I simply do not know. DCMS is none the wiser, and the Treasury Minister did not know anything about it, which suggests that it is a regurgitated announcement. Furnished holiday lets are those homes that are given over to the tourism market to provide an alternative to staying in a hotel. If the tax breaks that have applied until now are removed in April, as the Government intend, 10 per cent. of the market could be lost, which would lead to the loss of 2,400 jobs and a potential reduction in tourism spend of more than £200 million. I do not think that the Treasury has looked at this carefully enough and I ask the Minister to reconsider it. We have made it clear that we are likely to shift the rules so that the occupancy rate will have to be 20 weeks a year, rather than 10. The Government are running scared of EU legislation, but I ask them to listen to the tourism industry, realise how important this issue is for people from Cornwall to Scotland and get the legislation sorted out. There are many aspects of Conservative policy on tourism that I would be happy for the Government to copy. Thankfully, a general election is coming up so we do not have to wait much longer. Only £37 of every £100 we spend on holidays is spent in the UK, which means that £63 is spent abroad. A little effort by this Government to promote Britain to encourage us to celebrate what we have here would shift that balance and more money would stay in the UK. Corporation tax should go down, not up, and business rate relief should be automatic, not accessed only after a lot of red tape. The Budget did not contain any new tax breaks for new companies, but we have promised that every new company with fewer than 10 employees will not have to pay national insurance for the first year. The Secretary of State asked for evidence of what the Tories would do, and that policy is a great example of how we would help SMEs get the support that they need. The Government also need to look at the issue of visas. I urge them to consider a Schengen-plus bind-on to allow those Oriental visitors who want to come here to do so. France and Germany have 500,000 visitors from China every year, but the UK only gets 100,000. That is because Chinese tourists look at the cost of the UK visa and the cost of the Schengen visa, and they turn their nose up at the British offer because it allows entry into just one country. Biometrics must have reached the point at which the two systems could work together and that would be a step towards helping the British tourism industry. The Chancellor spoke for more than an hour, after which we knew little more than we had done before. After three terms of this Government, we still do not know what they have actually done. We head towards the general election none the wiser about how Labour would cut spending in real terms, how small business would get more support or how the cuts of £24 billion would affect the public services. After a decade of Labour, we see that the boom was wasted. The Government have failed to carry out the radical reforms to public services that new Labour promised us back in 1997 with such fanfare. Those reforms promised to change lives, but our pension systems remain a mess and our health and education systems hardly reflect the doubling of the budgets that they have received. This Budget, days away from a general election, should have provided the economic argument for Labour's appeal for a fourth term. Instead, it shied away from the big questions. It postponed the big issues and attempted to hoodwink the British people into thinking that Labour has weathered the economic storm. It has exposed the absence of a plan or any vision for the future. Britain can do better, and thankfully the nation will decide whether this Government should have a fourth term. They may well ask what on earth was achieved in the last three terms.