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Tourism Industry

Volume 506: debated on Monday 1 March 2010

2. What recent assessment he has made of the prospects for the domestic tourism industry in 2010; and if he will make a statement. (318849)

We expect continuing positive growth in domestic tourism following a 7 per cent. increase in the number of overnight trips and a 4 per cent. increase in visitor expenditure in the first 10 months of 2009. VisitBritain has forecast that the number of visitors from overseas could increase by 0.8 per cent. in 2010, with a corresponding rise of 3.8 per cent. in visitor spend.

Is the Minister aware of a study of lower VAT rates by the British Association of Leisure Parks, Piers and Attractions, which concluded that were we to adopt a VAT rate for accommodation and restaurants similar to the rates charged by our competitors in Europe, we would not only boost domestic tourism but increase Treasury revenues in the long run?

Indeed. I am also aware that BALPPA’s figures for last year showed a 10 per cent. increase in the number of visitors to its members’ attractions.

I have received representations on the issue of VAT. That issue is obviously a matter for the Chancellor, but we provide visitors with benefits that other countries do not provide. For example, free access to our museums is a very important attraction that encourages people to visit the United Kingdom.

What effect does the Minister think changes to the industrial building allowance tax regime will have on the domestic tourist industry?

Again, I have had representations on that issue, and, again, I have to say that it is a matter for the Chancellor. The fact that we have been able to encourage both domestic tourism and increasing numbers of people from Europe to visit Britain ought, of course, to benefit the tourism industry, and all the figures and statistics suggest that we are moving in the right direction.

As the Minister will know, we have a very good network of farms with second homes that are let out as holiday lets, particularly in the Ribble Valley. In the last Budget, however, a tax change made it less advantageous for the owners of these second homes to let them out as holiday lets. Will the Minister make representations to the Chancellor, asking him to right the wrong that has been done so that we do not lose this network, particularly as it has proved to be a great income supplement on farms that do not make a lot of money?

I am very aware of that problem, and I have taken members of the industry who are already particularly affected to a meeting with the Chancellor. The position is, however, that we are being driven by European regulations, not by any desire to increase income to the Treasury. [Hon. Members: “Ah.”] Yes, this is, indeed, to do with European regulations, and if Opposition Members do not like that, I am not quite sure what they propose to do about it. I shall, however, repeat to the hon. Gentleman what I have already said to the industry, which is that if it comes forward with a proposition that is workable for it and that complies with the EU regulations, both myself and Treasury Ministers will look at that very seriously. We do not want to do anything that has a negative impact on that part of the industry.