Tourism — House of Lords, 2021-06-24
Topic: Domestic Commerce
Elizabeth Deirdre Doocey (Liberal Democrats, Centre to centre-left): My Lords, the pandemic has elevated tourism from something to be taken for granted to something to be nurtured and treasured. Today’s debate is very welcome, but it is regrettable that colleagues are restricted to just two minutes on such an important subject The tourism industry is the UK’s third largest employer, contributing £147 billion a year to the economy and providing jobs for over 3 million people. Those jobs are evenly spread around the country with no region in England having fewer than 100,000 tourism-related jobs. The industry is a huge mosaic made up of thousands of tiny tiles. In total, the sector comprises 240,000 small businesses providing a diverse range of services. Ninety per cent of them employ fewer than 25 people Tourism provides over £20 billion each year for rural communities, which supports 350,000 jobs in the UK’s small towns and villages. It also provides £14 billion each year for seaside destinations, which supports nearly a quarter of a million jobs all along the UK’s coasts. That combined £34 billion spend makes tourism the largest non-governmental mechanism for transferring wealth from urban to rural and seaside destinations Quite obviously, the industry is the most acutely affected by Covid. In terms of inbound tourism, the sector is not yet even at the start of a recovery phase, since borders are effectively closed. In response to the crisis, the Government have produced a tourism recovery plan with the following objectives: "Recover domestic overnight trip volume and spend to 2019 levels by the end of 2022, and inbound visitor numbers and spend by the end of 2023." According to the Oxford Economics report on which DCMS based this plan, achieving these targets requires initiatives that will generate an additional £20 billion in tourism revenue for the UK economy, of which £14 billion has to come from overseas visitors I very much welcome these objectives but I hope to encourage the Government today to be rather more ambitious in the measures that they put in place to realise them. Generating an extra £14 billion in tourism revenue will require large-scale and ground-breaking action that makes overseas visitors sit up, take notice and holiday in the UK. The recovery plan envisages £10 million of vouchers for visitor attractions. That is welcome, but hardly compelling. There is also a promise to talk to the Rail Delivery Group about a new domestic rail pass, which sounds a bit like jam tomorrow, and beyond that, there are somewhat vague commitments to a sustainable tourism strategy and a consultation on statutory registration for tourism businesses. The flocks of tourists that we need to return to this country from overseas will not, I fear, be rushing to book their UK holidays on the strength of these commitments, so we need to be much more imaginative The Government have already taken steps in the right direction with a temporary cut in VAT on hospitality. Now is the time to make that permanent, not least because all the UK’s main competitors have a reduced rate of VAT on their tourism products and services. The cut has already saved more than 300,000 jobs. Making it permanent would generate a further 120,000 jobs as well as an extra £23 billion in inbound tourism revenue. To give one example, for a town such as Blackpool, making the VAT cut permanent would generate a further £216 million per year for the local economy and an additional 3,600 jobs. As things stand, research by the World Economic Forum shows that the UK has the most punitive tax regime in the world for tourists. Recognising, as a Treasury adviser did in discussion with the industry, that a reduced rate of 5% for tourism and hospitality is "one of the most efficient, if not the most efficient, means of generating GDP gains at low cost to the Exchequer" would go some way to reversing that trend. A second serious economic step that the Government could take is to revise their recent decision to remove the VAT reclaim scheme which attracts high-value, high-spending visitors from countries such as China and the Middle East. The Government’s own analysis shows that allowing duty-free shopping for tourists in the UK would bring in at least £1.2 billion of extra revenue per year. The current situation is essentially a signpost to the global tourism market, telling potential visitors that if they want to go shopping, frankly they would be better off going to Paris or Milan The Government must also reform the visa regime. A standard entry visa presently costs £95, but the Government lose money on processing every one of them, and very few people buy a five-year multi-entry visitor visa because it costs £655. The industry instead recommends pricing the five-year visa much more competitively, at around £150, which would cover the costs. That would save the Home Office money and encourage repeat visits, especially from parents of international students studying in the UK, who would of course bring their spending power with them. It simply makes no sense to shut them out of global Britain in the way that the present system does Turning briefly from the consumers to the businesses that make our tourism sector deliver for the economy, I want to cover the recruitment crisis that firms are facing because it is very serious. Put simply, there are just not enough people coming forward to fill either seasonal or full-time permanent vacancies. Many potential employees see tourism and hospitality as unstable and far too risky. Many have been on furlough for such a long time over the past 12 months or more that they have sourced alternative employment. Meanwhile, EU workers are not returning to the UK to work, even when offered a job. Having spent quite a lot of time discouraging overseas workers, the Government now need to make clear that they are very welcome—and, of course, investment in vocational qualifications and secure apprenticeships in tourism for young people is critical Sticking with the domestic market, I am currently engaged in discussions on behalf of the industry with the Government on amendments to the package travel regulations, which would allow small domestic tourism businesses to work together to provide UK residents with the value-added products that they want. I welcome the progress made so far and the open-minded attitude both of Ministers and officials. I look forward to turning useful discussions into real action in the near future Finally, I want to say a word about the impact of tourism on communities. In generating income for the economy, it is essential that much of it is directed back to the communities that host tourists year in and year out. One example is the rail service. Some 85% of visitors to the Lake District come by car, with all the associated issues of congestion and pollution. Expanding rail services in that part of the country—and, indeed, in rural parts of the south-west—would be an immense and very welcome investment in both the tourism industry and the communities that act as host. I am very grateful to councils around the country that have told me about the issues in their areas, not least an unbalanced housing market where homes are bought up for holiday-makers with nothing left for those who live and work in the community. That, too, must be addressed After the global economic crisis, research by the Office for National Statistics showed that tourism led the UK’s economic recovery, creating one in three new jobs. Our tourism industry can now lead the UK’s recovery from this pandemic, provided we have the vision, wisdom and conviction to support our tourism industry fully. I beg to move.