I beg to move,
That this House has considered support for the tourism industry after the covid-19 lockdown.
Tourism is so much more than just going on our summer holidays. I would like to thank everyone in the Chamber today who is clearly aware of the huge part the tourism industry plays in the whole UK economy, particularly in beautiful coastal communities such as mine in North Devon, where in places it accounts for 60% of jobs and income.
I applied for this debate many weeks before the Chancellor announced his excellent supportive measures on 8 July. The Chancellor acknowledged that the sector accounted for over 2 million jobs and 150,000 businesses, and while we cannot save every job or every business, he did commit to do whatever it takes. Indeed, his statement brought a tear to my eye in that so much support was coming forward: £4.6 billion in direct support through the VAT cut and the incredibly successful eat out to help out scheme, on top of the coronavirus job retention scheme, the business rate cut, grants, loans and so forth. There is no doubt that support has been forthcoming, and the three winter scenario so widely discussed back in May does now seem a dim memory.
With winter now very much on the horizon again, however, has the sector seen enough of a bumper season to be secure through the cold, dark, stormy winter days ahead? Initial data reports suggest not, with spending on national UK tourism down 50% in August 2020 versus August 2019, hotel spending down 63% and even self-catering down 8%, while yesterday’s limit to six people meeting will badly impact tourism businesses dependent on larger gatherings.
Unfortunately, we do not have much time, but I will say this quickly. The council area I represent as the constituency MP is Ards and North Down, and the key core of the economic drive of that council is tourism, which is so important. Does the hon. Lady agree that where such councils have responsibility for the economic drive—and tourism is up there—those councils need help?
I thank the hon. Gentleman for that intervention.
The pandemic has indeed shone a light into many of our economic sectors, highlighting the interconnectivity of so many activities. Indeed, the plight of the aviation sector—the subject of our previous debate—is inextricably linked to the overseas visitors who are most notable by their absence this summer. We need no statistics to know that for many of us here, it is far easier to get across Westminster Bridge now, without having to navigate through crowds of tourists. Overseas visitors normally spend in excess of £28 billion each year visiting our fantastic tourist destinations—more than our normal domestic tourism expenditure. That should start alarm bells ringing about the current situation in our tourism sector.
In Devon, we see over 35 million visitors a year; 11% of the population across the entire county are employed in tourism, and the proportion is much higher in some Devonian constituencies such as mine. Devon alone estimates its tourism turnover to be down by £1.3 billion this year; nationally, the estimate is over £68 billion. I remember with alarming clarity, as we went into lockdown, despite my self-appointed role as the one-woman tourist board for North Devon in Westminster, calling for my tourism businesses to close their doors. Over 80% of tourism businesses closed, versus 24% of businesses overall; 75% of tourism employees have been furloughed, versus 27% of the working population. The sector was late to reopen, of course, and in many cases has not been able to open even to 50%.
Many sectors have had a difficult summer, and focusing on tourism in this debate is not to belittle the difficult experiences of others. Tourism has seen something of a resurgence, and the sun has come out this summer for some in the industry, much helped by the eat out to help out scheme. Self-catering and holiday parks have reported some great results, and forward bookings look robust. However, as I keep reminding people, winter really does not start until January in Devon. A stormy day at the seaside is worth travelling for, in its own way. I recall with great affection, as a child with my father, getting a soaking at high tide from a huge rogue wave, and I have enjoyed watching a few roar across the Atlantic coast outside my window, even during this summer recess.
Positivity is something we can bring to this debate, and I thank colleagues in all parts of the House who have visited my North Devon constituency this summer. We all have a role to play in boosting our tourist economies by encouraging visitors to come and see what many may have forgotten a British holiday has to offer. After being cooped up for months, the pandemic has reminded many of us of the benefits of wide open spaces, and our beaches and moors have seen huge influxes of visitors; our city and town centres, however, have not. Indoor attractions continue to struggle to approach break-even with social distancing, not to mention the plight of the coach industry, conference and exhibition venues, tour operators, airlines and, unfortunately, many more businesses.
The tourism industry was in good shape before the pandemic, with annual growth over the past five years exceeding 4%; however, it remained plagued by low productivity, with a transient temporary workforce. Because of the nature of those working in it—from young people working a summer job to migrants trying to make ends meet—high staff turnover has hampered the growth of the sector. Hopefully, initiatives such as T-levels and apprenticeships will help more young people to see tourism as a career option and not just a summer job.
The cut in VAT will enable more small independent tourist businesses to stay open into the winter. Many in the industry were campaigning for a VAT cut long before the pandemic, to encourage coastal communities to extend their tourism season rather than close their doors for the winter. Perhaps that VAT remaining in place longer is what we need to help the industry to respond and rebuild.
I know that the Minister—an excellent Minister—is listening carefully. I think that we can all agree that the longer the 5% VAT reduction is kept in place, the more we can sustain and develop our tourism economies as we go into the years ahead.
I thank my hon. Friend for that intervention. We need to agree what we want the tourism sector to look like in the future, but we must also ensure that it receives the support it needs to still be there when the pandemic is behind us.
The economic hit of the pandemic has further underlined the need to level up our regions. The productivity and attractiveness of beautiful coastal resorts, which we have in abundance in North Devon, are hampered by a lack of infrastructure, particularly broadband. Coastal communities were hit hard at the start of the pandemic with increased unemployment. Of the 20 towns with the highest increase in unemployment from March to April this year, eight are on the south-west peninsula and 18 are coastal communities. But other opportunities open up far more quickly in regions with many other lines of economic activity and more diverse local economies. The deprivation of our coastal communities is well documented, and the hit their tourism industries have taken will only make the situation worse. When we look to level up, I hope we can work to understand how our coastal communities, north and south, operate, and ensure investment will secure long-lasting improvements in opportunity for our young people.
We also have lovely coastal communities in north Yorkshire, particularly in the shape of Filey. My hon. Friend talks about postponing the reintroduction of VAT. I absolutely support that, particularly as it will coincide, if it is reintroduced, with the repayment of other payments to HMRC and the payment of rates that restart. It would really help cash-flow pressures if it were delayed.
Indeed. It is a far more complex issue than me standing here today and asking for more blanket support for the tourism industry.
Destination management organisations and industry bodies are working tirelessly in the background and are well placed to represent the sector. We need our DMOs to be more robust, with a sustainable funding mechanism. We need a clearer strategy and we need those long talked of tourism zones to become a reality. As we leave the EU, we must also look at reducing red tape, with the removal of travel package regulations, for example.
Some of the tourism sector may have been slowly eased off life support this August, but it is not ready to be discharged just yet, as I have illustrated. I hope the ingenuity and creativity displayed by the Treasury and the Department for Digital, Culture, Media and Sport to date will be replicated in the coming months to give the tourism industry the leg up it so desperately needs to ensure we can welcome international visitors back, as well as those of us visiting parts of the UK to help out in the coming months.
I am happy to give way to the right hon. Gentleman, if he has an opportunity to intervene on me.
I congratulate the hon. Member for North Devon (Selaine Saxby) on obtaining the debate and on how she set out her concerns. Tourism and the visitor economy are one of the main pillars of the economy and regeneration of Liverpool, my city. This has been the case especially since 2008 when it was European city of culture.
The entire city region’s visitor economy is worth more than £5 billion annually. The city region attracted 60 million visitors last year and employs more than 57,000 people. By the start of June, the lockdown and covid had cost the sector in Liverpool alone almost £1 billion, so the hon. Member is right to bring this issue to the Floor of the House. It is not only in our beautiful coastal areas that this has a major effect, so cultural tourism in Liverpool is not just a nice add-on; it is a fundamental part of the economy and the way forward in my city. To illustrate that, almost 50% of business rates revenue in Liverpool comes from the leisure, hospitality, digital, creative and culture sectors, so it is not just our beautiful seaside areas and counties where this is tremendously important.
Many aspects of this industry are likely to be the last to come out of lockdown. Even though the support that the furlough scheme has provided has been very welcome, I have still seen a doubling of unemployment in my constituency during lockdown. There are still 48,500 people furloughed in Liverpool, about one fifth of them in my constituency, and many of those jobs are at risk. They are in the visitor economy and the tourism sector and will be at risk if furlough ends.
One of my main asks of the Government is this. There are aspects of this industry that simply cannot go back to work or life as normal, such as the events industry and production, including sound and light production, which are huge in my constituency. They cannot go back to normal. The arenas and theatres are not open, and even if they do open, they cannot make money because of social distancing.
I am grateful to the hon. Lady for giving way. I have been a regular visitor to her city over the years, and anyone who goes there will have a wonderful experience. The tour operator and travel agent sectors, both inbound and outbound, conform to exactly what she described. It has not only been difficult for them to conduct business. It was impossible to furlough many members of staff because they had a lot of work to do, taking calls from customers who wanted or needed to cancel bookings. Does she agree that we need to recognise the nuances and differences within the industry, while celebrating the return of visitors to many of our cities, towns and villages?
The right hon. Gentleman is correct. Some organisations would have furloughed if they did not have so much work to do, not that it was necessarily productive work, in the normal sense, that would make money for the company. He is right to identify that issue.
If I have one ask for the Government, it is not to treat these industries in a one-size-fits-all way. When furlough ends at the end of October, parts of the visitor economy and tourism sector—the things that attract people to Liverpool—will still not be able to go back to business as usual or work at all. These are fundamentally sound businesses. Our events industry is brilliant, and it will be brilliant again when social distancing has gone—it will stand on its own two feet and make money—but it will not be there if the Government do not do something beyond the end of furlough to ensure that these fundamentally sound businesses still exist.
Once gone, these businesses will not come back. Their work will simply be done by other organisations in Europe and elsewhere, and we will lose the advantage that we have in lighting and sound production for gigs and tours. That will not be there anymore, and it will not be making money for UK plc. Our visitor and tourism economy will not be able to attract the people it has done from overseas to our shores in future if those industries are not there.
It is a great pleasure to speak in this timely and important debate on tourism, and I thank my neighbour, my hon. Friend the Member for North Devon (Selaine Saxby), for securing it.
As we all know, tourism has been one of the sectors worst affected by covid-19, and I echo a lot of what my hon. Friend said. Naturally, the sector had to be closed down by the Government because of coronavirus, but it has been hugely economically affected. In the south-west, we have a large tourism sector that supports our region’s economy. Job losses will not be limited to hospitality. Significant losses will be felt in the food production and supply chains too, and of course, in rural areas, food, farming and tourism are intricately linked.
Despite an increase in staycations this summer and the help from Treasury, with the eat out to help out scheme, the furlough scheme and tax holidays, the tourism sector has still suffered huge losses because of covid-19. VisitBritain has collected data from across the country and estimates a minimum loss in revenue of some £68 billion for the tourism sector this year. According to a survey by the Department for Digital, Culture, Media and Sport in June, 92% of tourism businesses say that their revenue has decreased by more than 50%, and 62% say that they will not be viable businesses within six months. That survey was three months ago, so time is of the essence if we are to ensure that our tourism and hospitality businesses survive the winter. Due to covid-19 and the lockdown, our hospitality and tourism sector missed out on half the holiday season. Even now, about one third of businesses in our region can only operate at 75% capacity, so viability remains an issue.
So what can we do? The first and most important thing is to maintain the VAT reduction for the tourism and hospitality sector through to Easter next year at the very least, because that will encourage visitors and keep businesses going. The reduction in VAT to 5% has reduced outgoings for our businesses throughout the summer, and I think it is best that the Government continue giving that support, to help businesses to plan. Ahead of the autumn Budget, I ask Ministers to lobby the Chancellor to keep VAT at 5%. I also ask the Government to consider extending the business rates holiday beyond April next year. We have a very able and good Tourism Minister, but it will take the tourism industry some years to recover from these losses.
Tourism in Wales is a matter for the Welsh Government, but it has always been a valued part of our economy and, as this pandemic has hit us, it lies at the centre of the relationship between England and Wales, particularly north Wales. There has been a trend towards tourism from other parts of the European Union, but the bulk of tourism in the north is from English tourists—tourists often visiting for the day. Tourists climb our mountains, they swim from our beaches, they ramble on our countryside and they eat and drink our wonderful Welsh produce. There will always be a welcome to those who come to experience our country responsibly. We have seen some confusion, as the media would have it—confusion over the rules in England on the one hand and the rules in the UK on the other. Responsibility for much of this confusion lies with the media themselves and with the Government in London. The UK Government must be more consistent by making it clearer when they are acting as the Government of England, and I urge the media to follow suit.
Tourism has grown over the decades and we welcome that, but covid has led to a sharp spike in numbers. The effect of a jump in the population of a seaside village from, say, 1,000 to 10,000 is as profound as hundreds of thousands of people heading for Bournemouth or for Brighton. This not only makes it more difficult for local people, but spoils the visitor experience for tourists themselves.
There has been a welcome push for quality in the tourist offering in Wales over the years. This is one of the key steps to our recovery after covid, which is why we as a party are advocating sustainable quality tourism in Wales, respecting our environments and our cultural and linguistic riches. The industry is losing half of its earning capacity this season, so while we welcome the UK Government’s decision to provide VAT relief, I urge them to introduce a permanent VAT reduction to 5% for the hospitality industry, which is something that was allowed by the European Union in 2008 and which has been studiously ignored by Chancellors of both main parties ever since. But we need to do a good deal more. Time is short today, so I will say only that devolving real power and resources to support employment is an obvious further step and that it is truly deplorable that the furlough scheme is being withdrawn much, much too early.
The great city of Edinburgh, more than most, welcomes people from across the globe. Members will be familiar with our city’s wonderful arts festivals, but its year-round reputation attracts visitors all the time. Combined with that, the conference centre stimulates business tourism and, of course, the city is a gateway to the rest of Scotland.
So tourism and hospitality are vital for the city’s economy. Some 33,000 jobs depend upon it. So it is almost impossible to overstate the harmful effect that the public health restrictions due to the pandemic have had on that sector. Last year, 1.5 million people came through Edinburgh airport in July. This year, the figure was 170,000. Last year, more than 3 million people visited Princes Street in August; this year, it was less than a quarter of that number. Half of our hotel rooms were empty this summer. Our visitor attractions were down 90% and, of course, our venues and theatres remain dark.
My hon. Friend is making a passionate defence of Edinburgh, but he will share my concern that our islands, such as the Isle of Arran and the Isle of Cumbrae, have also suffered particularly badly. Despite my pleas to the Chancellor, the requests for extra help for these islands have gone unanswered. Does he not agree that sometimes support is needed because it is a question of sustainability for our island communities?
Indeed I do and I shall come on to that. At the core of this dilemma is the fact that the essence of these industries—hospitality and tourism—is bringing people together. Social distancing is the antithesis of what these industries grew up for, yet they are going to have to try to manage the problem. Everyone understands the necessity and requirement for the guidelines to be enforced, nobody more so than those working in these industries. The question is how we can manage.
We have all seen firms in our cities and towns trying to operate with reduced capacity. I have seen it myself in my constituency. Last month, in Perthshire on a family holiday, I stayed at several hotels and ate at several restaurants, all doing their utmost to conform to the guidelines that are to be enforced and, indeed, taking pride in their ability to keep their customers safe.
Behind the brave faces, however, there is a deep and dark despair. It is the despair that comes from knowing that, at the end of a hard shift, more money has left their bank account than went into it, no matter what they do. The truth is, for pretty much all those businesses, those reduced capacity operations are unviable in the longer term, although they do two things: they postpone the date at which money runs out completely, because they slow the rate of loss; and, more importantly, they retain some jobs, and capacity and expertise in the sector, so that when the restrictions change, they can spring back.
That is why I believe that the No. 1 priority now must be to look at those businesses and see how we can support their reduced capacity operation through to next spring. That means we have to abandon this silly, one-size-fits-all blanket policy that treats all businesses as if they were the same. We need a more sophisticated, more tailored and more targeted approach that works with individual businesses and tries to get them through to a position next spring when they will be no worse off than they are now. Support will also be required beyond that—even if the restrictions are lifted, it will take time for public confidence to return and for the market to get back to where it was at pre-covid levels. We should be planning for two to three years of further support.
It is right that the public purse should do that, because businesses are closed and closing because of public policy and a public imperative. That must be the priority. The Government cannot abandon support on 31 October, stand back and watch the sectors decline.
I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing this debate on the tourism industry. It is much needed and most welcome.
I am encouraged by the continued low level of cases of coronavirus in Devon, despite the number of visitors to East Devon, who provided much-needed cash flow into our economy. Exmouth, Budleigh Salterton, Sidmouth, Ottery Saint Mary and Topsham enjoyed summer safely, with people flocking to East Devon to lap up the sunshine, and to enjoy many culinary delights with a discount, thanks to the eat out to help out scheme from the Chancellor.
In fact, I did not manage to visit as many restaurants as I would have liked, as many were fully booked all week—great news for the businesses and, arguably, my waistline—and 202,000 meals were discounted in East Devon. Speaking to many people who work in hospitality on my travels, the scheme helped to show the wolf the door and to bolt it shut. I, too, regularly speak with tourism industry leaders, and they tell me that the scheme had an astonishingly good reception from businesses in Devon, some of which were cynical at the start.
Devon is not just famous for food; it is also our beautiful countryside, rolling hills and stunning cliffs. However, our tourism industry still faces a cliff edge that few want to see. It is estimated that about £2.2 billion of anticipated tourism business turnover has been lost in the south-west in the first six months of this year. If we also consider the tourism supply chain, that is a further loss of £468 million to our economy. Business turnover has halved. Only 30% of businesses in the south-west anticipate that they will survive beyond summer 2021. Let us give them hope and optimism, and reassure them that we are on their side every step of the way.
The temporary 5% reduced VAT rate, supporting tourism, hospitality and leisure businesses, comes to an end on 12 January next year. That measure is helping businesses to survive, as they stick to the guidelines and adjust their businesses to keep staff, customers and guests safe. I understand that the Treasury keeps taxes under regular review, and I sincerely hope that it is reviewing this measure and considering an extension. The measures put in place by this Government undoubtedly saved thousands of jobs across the south-west, but sadly our tourism industry is not out of the woods yet and further support is needed to help it to survive and thrive. We simply cannot afford the alternative.
In 2018, tourism brought in 5.5 million visitors, 3.5 million of whom were from overseas, and with them came £5 billion to the Scottish economy, but I want to look at the heart of the tourism industry: the coach sector—the wheels on which the tourism industry literally runs. Tourists do not come here to see our outstanding airports, vital though they are—and I know they have their own challenges; they come to see our country and they see it on a coach. The haulage industry is rightly proud that whatever we purchase in a shop, it got there on the back of a lorry, and so is with our tourists. Wherever they go—hotels, visitor centres, theatres and restaurants—they get there by coach, yet the coach industry has received negligible support, especially when compared with the billions that the Government have spent on their covid response. And let us not forget that it is coaches that are the first and only port of call when trains disrupt and flights divert. That is a further warning that the Government take this industry for granted at their peril.
Many coach operators are family enterprises, not run for vast profit or easy money but instead reinvesting in the long term in their fleets and their drivers.
One of the important things about the coach companies is that many of them are family owned. There are three or four in my constituency and they are all family owned. The impact on those families has been dire, so does the hon. Gentleman agree that that is where the help is needed?
I agree entirely with the hon. Member. The nature of the business is absolutely exceptional, with its organic growth and investing to ensure that passengers get the absolute best experience. These businesses have paid handsomely into the Exchequer for decades, while never troubling the taxpayer for Government support. These are the businesses that the Government must now stand behind—if not for them, then for the 40,000 people employed in the coach sector. And if not for them, then for the £14 billion generated for the UK Exchequer every year by the sector. There is nowhere left for the Government to hide on this issue.
I would like to share with the Minister the example of one such company in my constituency, Black’s of Brechin. It has been family owned across the generations, proudly operating a modern fleet of luxury coaches that reflect very well on our outstanding tourist offer in Angus and more widely across Scotland. The managing director, Robert Black, was the first Angus business representative to contact me at the start of the pandemic. Black’s is a business with a focus not only on daily operations but on the strategic, looking for the threats and opportunities lying ahead. Not long after that phone call, all opportunity for Black’s of Brechin and every other coach operator up and down these islands evaporated, being replaced by overwhelming risk.
With lockdown, tourism stopped overnight. There were mass cancellations of coach tours, wedding hires, golf trips and football hires. Every single booking was cancelled, and although the tourism market theoretically reopened in July, that will not facilitate a recovery for the coach sector any time soon. What Robert Black said to me in that phone call in March has come to pass. He said that the coach industry would be the first to be hit, that it would be one of the hardest hit and that it would likely be the last to recover. I would add that without Government support, many operators will almost certainly not recover, although as we have heard, these are viable businesses. There is scarce time left to save the coach sector. The industry is in the midst of an 18 to 24-month winter, and furlough is due to end in the coming weeks. The Government told us that they would do “whatever it takes”. The fiscal levers rest here in Westminster, and the Government must act now.
I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing this debate. The hon. Member for Angus (Dave Doogan) will be pleased to know that I am going to speak on the same theme. What is tourism? The word “tour” comes from the Old French, meaning “round” or “circuit”. In essence, to tour means to complete a round trip—to visit and then return. Modern tourism, with the traveller in pursuit of recreation, naturally involves a round trip. A round trip needs transport, and transport needs infrastructure and vehicles.
County Durham and Sedgefield include the birthplace of public transport itself, in the form of the first passenger railway in the world. Locomotion No. 1 is the first and oldest passenger train in the world, and it still rightfully resides next to me in Darlington. With County Durham giving birth to rail travel, dare I say that we also gave birth to the possibility of widespread tourism and the great British tradition of the staycation? In the current climate, I encourage all to revisit this tradition and invite you to come and enjoy the wealth of what Sedgefield and County Durham have to offer, including preparations for the bicentenary of the Darlington to Stockton railway, which was the first passenger railway in the world, as I said.
My constituents also like to travel elsewhere and need the means to do that. We need to make a concerted effort to retain and enhance our travel infrastructure and to allow the industry to recover and grow. We need to keep up the momentum that covid has threatened to slow. On this topic, I must mention Ferryhill station, the two words I probably mention most in the Chamber. Rebuilding stations such as Ferryhill will support the sector and, following covid-19, provide much needed momentum for the future, but that is in the medium term.
In the short term, I would like to highlight the problems of coach travel, one of the more immediate fixes that the tourist industry needs. Ninety-eight per cent. of coaches that would normally be on the road this summer were mothballed due to a lack of demand. One coach operator, which carries 40,000 passengers, carried 200. Mr Neville Jones of J&C Coaches, a family-run business in Newton Aycliffe in my constituency, is illustrative of so many coach companies across Britain. It has also suffered because of the closed schools—it provides the same service to them. Coach operators are the glue that holds the tourist industry together. They are vital to the local, national and international tourist markets. They get us to Durham, to Devon, to cruises, to flights—and even to Angus.
The Confederation of Passenger Transport, the trade association for coaches, has made recommendations to potentially buffer the effect on the sector, and I encourage Government action in consideration of the following: extending finance holidays to ensure that no coaches are repossessed; grouping the coach travel sector with the leisure sector to give it better support; and providing protection to those families whose livelihoods rely on coach travel. There needs to be a moratorium on lenders seeking to repossess family homes.
Although I have talked specifically about coach travel in Sedgefield, I am sure that we can agree that it is important to the whole country. Coaches need to be supported to help British tourism. Without coaches, tourism is devastated.
I am grateful to be called in today’s debate, Madam Deputy Speaker. Thirty thousand people in York work in the hospitality, tourism and leisure sector. That is one in four jobs in my constituency, and we are really worried about the impact that this virus has had on our local economy, for obvious reasons, and particularly in the small and independent sector. Normally, we would see 8 million visitors come to enjoy York and it is understandable why that is—whether it is indoors or out, visiting the minster, the museums or visitor attractions, taking part in the small independent retail offer that we have, walking the walls of the city, enjoying the green spaces, or simply wandering through the medieval streets or around the snickets. But with covid-19, our streets became silent and doors shut, and many have yet to open. Of course, this was just at a time when our city was picking up from the floods. Our city describes this as entering into our third winter in a row and we desperately need help now.
I have three requests for the Minister. First, the reputation of our city will be built on our city being safe, and that is why we need an excellent test and trace system in York. I ask him to make representations to the Department of Health and Social Care for our city to have a walk-in centre for testing. It would be a game-changer for tourism, because we cannot expect visitors who come in by train to then go out to a drive-in centre for testing. We also know that many people in our city will want to get out again quickly, so I ask not only for a walk-in centre, but that we become a pilot for the rapid tests that are to be introduced.
Secondly, I want to come on to the issue of furlough. Yes, we did debate it yesterday, but it seems that a bit more persuasion is needed. We absolutely need furlough to be extended. Currently, in my constituency alone, I have 17,700 people who are furloughed. They are facing a cliff edge unless there is further support. When Government Members say, “How long?”, I would say to the Minister: let us extend and then review. Let us extend it beyond Christmas and review it in the new year, and then take it forward from there. We do not know what is going to happen over the next few months. There could be a national lockdown or local lockdowns. Perhaps the virus will die out. Perhaps the vaccine will arrive. Therefore, let us take this step by step as we go.
Thirdly, I ask that the Minister meets tourism leaders in my city to understand the rescue package we need, because this recovery is going to take time. So much money has been lost from the sector to date and we really want to make sure that we are a success going forward. If he would be so kind to do that, I am sure our sector leaders would really engage with him and help him to put the right package together for the future.
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing the debate. Since her election in December, and throughout the pandemic, she has consistently spoken up for the tourism sector, securing guidance and support. I commend her for her efforts.
I understand the value of tourism, having grown up in New Zealand, a country that remade itself in the 1980s and ’90s by making tourism its biggest export—apart from the All Blacks, of course. The history of tourism in this country, however, goes back much further and has been a hugely successful part of our economy. British culture has an extensive reach around the world. In 2018, 37.9 million people came from abroad and spent £22.9 billion to experience that culture and history first-hand. Very sadly, covid-19 and the subsequent lockdown have had an inevitable impact on our tourism sector. I welcome measures taken by the Government to help to mitigate that impact, most notably: the business grants in the retail, hospitality and leisure sectors; the business rates holiday for 12 months; the tax deferral scheme; cutting VAT from 20% to 5% until January 2021; and the enormous success of the eat out to help out scheme, which has been a lifesaver for many businesses in the tourism sector. I recognise the calls from colleagues across the House to extend the VAT cut. I join them in that call.
The cultural rescue package put together by the Government, worth £1.57 billion and delivered through local community funds and the National Lottery Heritage Fund, has made a difference to the Yvonne Arnaud Theatre and the Watts Gallery in Guildford. Guildford may be renowned for its history, culture and heritage assets, but there are also wonderful family-friendly activities, with the Surrey County Show, the biggest agricultural event in the south-east, Wild Wood Adventure and swimming in the Guildford Lido, as well as stunning walks along the North Downs Way. Cranleigh, to the south, has made adaptations to part of its wonderful village high street, with outdoor eating displays alongside its famous attraction of independent shops, which have made it a truly enjoyable summer for visitors and locals alike. I hope that some of those innovations will continue into the future.
We have just had an amazing August bank holiday bonanza weekend in Guildford, where retailers saw their best ever trade since lockdown. I would like to put on record my thanks to the enormous energy of Stuart Alexander of Big Mouth Guildford, working in conjunction with Amanda Masters of Experience Guildford, Guildford Borough Council and the local radio station, Kane FM. The work that residents do to support local businesses and make our tourism destinations vibrant to ensure success beyond this global pandemic is truly heart-warming and encouraging. The partnership between government and our community is vital for our future success.
In conclusion, as someone who came to live in this fantastic country over two decades ago and who understands what draws those from overseas to this green and pleasant land, I can say with confidence that as we come out of the global pandemic we will see a revitalisation of our tourism sector.
There are so many things that draw visitors from around the world to Bath. I want to take this opportunity to congratulate the Roman Baths and Pump Room, and the Herschel Museum. Between them, they have recently won three of Visit England’s 19 annual awards of excellence. We welcome 6.5 million visitors a year and employ approximately 9,000 people in tourism-related businesses. Covid-19, however, has been catastrophic for our local industry not just nationally, but globally. In Bath alone, the loss of the visitor economy in 2020 is estimated to be about £350 million. Our local authority has been particularly exposed to the financial impact of the pandemic. Tourist attractions are a large source of income for our council and it means less money for vital services for our residents.
Locally, we have had conversations about diversifying our economy and making it more resilient in the longer term, but businesses in this sector need urgent support now to make sure they survive. Organisations such as the Bath Preservation Trust are working hard to safely reopen their venues, but they have to operate at a significantly reduced capacity. Reopening will barely be viable. It is a great shame that Bath Christmas market will not go ahead this year. Visit Bath, Bath BID and Bath Festivals are working on an exciting programme of events to hold instead. It is great to see organisations looking at innovative ways to safely support our local economy. However, with many seasonal events postponed, this off-peak time will still be a big challenge. Destination management organisations will be essential in rebuilding confidence in the tourism industry. They provide crucial support for local businesses, including through marketing. They will be crucial in the recovery of the wider tourism economy, but they are very vulnerable now and they, too, need urgent support.
I draw attention to the difficulties faced by the English language teaching centres, of which there are several in my constituency. For students at those schools, visiting the UK is about far more than learning English; it is a cultural experience. They stay with local families and they visit our attractions. More than 500,000 ELT students bring £1.4 billion to the UK economy annually, and that important industry anticipates it will lose more than 80% of this year’s business. I urge the Government to listen to the industry’s call for short-term support by including ELT in the business rates holiday and supporting the Study UK campaign.
Bath brings so much to the south-west and the wider economy, and I look forward to working with the Minister to provide further support to this vital industry.
I congratulate my hon. Friend the Member for North Devon (Selaine Saxby) on securing this debate. She and I and all members of the Devon community have been working together over the past six months to ensure that tourism and hospitality have a strong voice in this place. Groups such as the Devon economic recovery organisation are looking forward to supporting the sector further as we go into a troubling winter and 2021.
For many businesses across my constituency, it has been a successful summer, but one where they faced great difficulties. Huge demand in areas such as Salcombe, Dartmouth, Brixham and Paignton has led to residents being faced with people visiting being rude and trying to escape covid in certain cases. That is not acceptable, but those who work in our sector have been true heroes in trying to regain their losses from the lockdown, restore confidence in their sector and make sure they can see a path forward through this winter.
A few months ago, we put together a letter calling for the Government to cut VAT to 5% for tourism and hospitality, and I am delighted that the Government listened. I am delighted that so many Members across the House have supported the calls for a continuation of VAT at 5%. That will be the necessary breathing space for so many of those businesses. It will give them the chance to get through this winter and face 2021 with a great deal more cash in their bank account, but also the understanding that the Government are on their side.
The other suggestion that I would like to put forward, which has been mentioned by a few Members across the House, is that of rebranding VisitBritain from a worldwide campaign to a new domestic campaign that will promote domestic tourism. We have great things on offer across the country, and we should be highlighting what they can provide to our own residents and citizens.
The third point I would like to touch on is flexibility between the rural and urban sectors of tourism. I am sure that my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) will touch on the issue, but there is a great distinction between rural and urban tourism, and there needs to be flexibility in how we engage and support those sectors. That is a call not just for more money, but to understand how those sectors work and how we can support them as new measures come in around social distancing or as this virus plays out over the winter.
The hon. Member for Angus (Dave Doogan) touched on transport and coaches and all of that, but we must also look at how we can improve transport. The Government are improving local and rural transport links, and that can also encourage a drive in domestic tourism. Easier access to rail and more ability to get to those communities across our country should give us the ability to draw more demand.
This sceptred isle set in a sea of silver will surely welcome people back in the future, and I look forward to our communities all working together to drive such demands.
I also add my congratulations to the hon. Member for North Devon (Selaine Saxby) on securing this important debate. The domestic tourism sector is what I want to concentrate on in my remarks this afternoon. I sort of view it as being a network of distinct micro-economies mutually supportive of each other. Just in Warwick and Leamington some 4,000 people are employed in the sector, and in south Warwickshire the number is 13,000. That accounts for three quarters of a billion pounds in GDP, so it is a significant contribution to our local economy.
We have in the constituency Warwick castle, which is clearly a destination of choice—perhaps preferable to other castles in the north of the country where certain people choose to go. I campaigned for its reopening back in June because it was being held back by legislation that was preventing the operation of its food and beverage outlets. Fortunately, the Government and local authority saw the sense in allowing the castle to reopen, but it lost half its key trading period and is now operating at 60% of capacity.
Nearby, we have the Royal Shakespeare Company in Stratford, which is not in my constituency but is mutually supportive of the local micro-economy. The RSC has really struggled, losing 75% of its income. Most worrying of all is that it now has to face going into a formal consultation with its staff and the unions from October.
I mentioned the local economic system or ecosystem; both the hon. Member for Angus (Dave Doogan), and the hon. Member for Sedgefield (Paul Howell) mentioned the coach industry, which sort of lubricates the tourist sector. I spoke to Ridleys, which is based in Warwick. Some 75% of its business was in the touring sector; it has now had to switch to providing services for schools. Ridleys has been lucky—other coach companies have gone to the wall—but the staff there are really angry because they do not see any consistency from the Government. Why is it that 300 people can get on an aeroplane and sit cheek by jowl for three hours, but people cannot get on a coach and do the same thing? I urge the Government to revisit that issue urgently; it would be one of the simplest things they could do to support the industry.
In summary, I would like to see more targeted support—specifically, the extension of the furlough scheme—and I urge the Government, as have others in the Chamber, to extend the VAT cut beyond January next year. In fact, I ask the Government to consider a permanent VAT cut, sitting at 10% going forwards. That is the sort of thing that could underpin the tourist and hospitality sector for the future.
I join in the congratulations to my hon. Friend the Member for North Devon (Selaine Saxby) on having secured this debate. I offer my apologies: I have been scrutinising the Fisheries Bill, but look forward to reading her speeches and those of others in Hansard tomorrow.
Tourism is a vital part of west Norfolk’s economy, with visitors coming to enjoy our wonderful coastline, countryside, heritage, food attractions, drink and a lot more. The local visitor economy is worth around £500 million, with tourism and related jobs making up a fifth of all employment. Last year, 2019, was a record year for tourism in Norfolk, and this was meant to be another year of growth, but the covid lockdown has hit the area hard and had a disproportionate impact among young people, who hold around a third of the travel and tourism jobs in the sector, compared with just 12% of jobs more generally.
My constituents are grateful for the bold package of support that the Government put in place for tourism and hospitality businesses; it provided a lifeline and desperately needed cash flow. Despite firms being able to trade in the late summer, that has not mitigated the time when they had no income—especially when 70% of business activity normally takes place between April and October. My hon. Friend the Minister, who is a great champion of the sector, knows that the business rates holiday and the cut in VAT have been warmly welcomed. I join others who have spoken in this debate in support of the calls from the sector to extend both those measures to help to boost the sector.
As well as fiscal measures, one of the best things we can do to encourage people support tourism is to have staycations and visit coastal and rural areas. I was pleased and delighted when the Prime Minister, in this House, encouraged people to come to sunny Hunny for their staycation. I took his advice and had a lovely week in a camper van, going around my constituency—including to Hunstanton, Brancaster and Burnham—and enjoying the wildlife, pubs, historic King’s Lynn and all there is to offer.
My hon. Friend the Minister will know from his visit to Norfolk—I invite him to venture into west Norfolk next time—that all the local authorities and marketing organisations are working together for the first time on the Unexplored England campaign, to boost this season and encourage bookings for next year. The extension of the all-year-round economy and off-season experiences, and the reduction of the reliance on peak months, are all key to driving productivity and growth.
In addition to encouraging visitors, we should do all we can to reduce red tape, so I support the calls from Deepdale Backpackers & Camping in my constituency to waive or extend the 28-day farmland rule to provide more flexibility to take advantage of the home tourism market.
Finally, we need to look to the future, and a significant opportunity is to become one of the new tourism zones. Norfolk and Suffolk should be at the front of the queue, with much work having been done by Visit East of England. Our pitch will focus on being the most sustainable tourism destination, with a strong sector skills offer for young people. I will be championing that bid, and I look forward to discussing it with this and other Ministers.
I apologise for not having been here for most of the debate, Madam Deputy Speaker; I have been trying to multi-task today and have been failing miserably.
I wish to pick up on the point made by the hon. Member for North West Norfolk (James Wild) about the reduced VAT rate, as I, along with many others, have been campaigning for that for many years. It is a welcome move, but, as he said, it requires a bit more consideration, with a view to a more open-minded approach from the Treasury to see it extended. I believe it is due to run until January or February of next year, but we are talking about people who have come out of six months of winter into spring of this year, when they were earning very little, and then been closed down for most of what would be their economically productive season. Accordingly, they simply have not opened up and they will be going back into their quiet season again, with a view to going back into their full productive effort around Easter next year, by which time the benefit of a reduced VAT rate is not going to be there for them.
I also say to Treasury Ministers, through the Minister on the Front Bench, that one of their objections to a reduced VAT rate for the visitor economy over the years has always been that they do not think it would have the effect on the tax take that is claimed for it. After a significant period at the reduced rate, if it is extended beyond that which we have at the moment, we will have reliable data that should settle that question once and for all. The case for a continuation of the VAT reduction period is strong.
As the local economy in the Northern Isles was opening up over the summer months, I was able to go out, and as the visitor economy is so important for us, I took time to talk to hoteliers. The thing that came across to me loud and clear was their frustration at having no control over so many of the things they need to rebuild their businesses and get money back into our community.
As an MP for an island constituency, like me, does the right hon. Gentleman agree that the financial packages provided by this Government are particularly important for island and coastal communities?
They are absolutely important for island and coastal communities, because there are so many different ways in which we do not control our own destiny. I talked to hoteliers at the north end of Shetland, one of whom was particularly frustrated because they had had so many group bookings cancelled—NorthLink Ferries had cancelled the bookings from the tour companies themselves. That Government-provided service should be running for the benefit of the community, but, for reasons that were perhaps understandable but which came without the necessary consultation, these people had been left without the proper control. As we begin to rebuild the visitor economy, in the Northern Isles and elsewhere, the one plea I make to Government in London and in Edinburgh is that the communities that rely on the visitor economy should be given the power to do that for themselves. They are the people who know best what they need, and they need to be listened to. Give them the tools to rebuild our tourism industry and they will do the job for us.
With the greatest respect, Madam Deputy Speaker, you are an iconic global tourist attraction—we all are. We sit here in the Palace of Westminster, which usually welcomes thousands, if not hundreds of thousands, of visitors every year. They are not here and not here in central London now. That is why I am so delighted that my hon. Friend the Member for North Devon (Selaine Saxby) has secured this debate, because it is so important. Because I could not go and visit my brother in the States this year, due to the crisis, I am delighted that I went and spent my holiday in her constituency. I went to Croyde, and to a holiday camp run by that well-known holiday operator, Unison.
Central London is home to hundreds of millions of visitors every year, but they are not here. Over this crisis I have learned how important the ecosystem of the tourism, hospitality, leisure and retails sectors is for central London and across the country. For every £1 spent in theatres, another £5 is spent in the local economy. Sadly, theatres remain closed, although I hope we can open them again soon. Other cultural and leisure visitor attractions such as casinos have just opened, and I know that the owners of the Hippodrome and Grosvenor Casinos are delighted with that.
I am delighted with how the Government have supported those industries and sectors during covid. The outstanding Eat Out to Help Out scheme saw 890,000 meals eaten just in Westminster and the City of London. I am delighted that Grosvenor, a huge property estate owner in Mayfair and Belgravia, is now extending that scheme, and supporting small and independent restaurants and cafes in that area throughout this month. We all have a role to play. Westminster Council has just launched its new campaign, Sightsee crowd free, and I urge all Members to get out and enjoy the fantastic sites—there are 62 iconic sites in Westminster alone, let alone in the City of London. Members should enjoy those sites, support the local economy, bring their families, and have a great time. It is so important to support tourism in London and get Londoners out, as well as to support the amazing attractions.
Will my hon. Friend give way?
I will not, if my hon. Friend does not mind.
Finally, I urge everyone to enjoy the special tourist attractions offered by central London, and the whole of London.
I apologise to the hon. Member for North Devon (Selaine Saxby) and other Members, because my time in the Scottish Affairs Committee prevented me from hearing some of the contributions this afternoon. The tourism industry plays an incredibly important role in my constituency, and every year from March to October, Fife is full of tourists who come to explore its beautiful beaches, the fishing villages of the East Neuk, and towns such as Cupar and St Andrews, the home of golf. Because of the pandemic, all that has been put on hold. Businesses planned and made investments over the winter, as my right hon. Friend the Member for Orkney and Shetland (Mr Carmichael) said, preparing themselves for a season that never started.
I wish to use my short time this afternoon to highlight a couple of specific cases from my constituency. The first is a small tourism business that operates from St Andrews. It drives golfers and tourists around Fife and all over Scotland from March to October. It employs three tour operators, and received a grant under the self-employment income scheme. When the schemes and grants started, it was all about making it through the summer, and trying to make the most of the rest of the season. In reality, however, there is no business for them. The business relies on Swedish and American tourists, and none of those have come. It is ploughing all its money into getting to March 2021, when hopefully the new tourism season will begin. If the support schemes end, however, it will not make it. It will go out of business. It told me, “It’s people like us who work and pay our taxes, and we will fall through the cracks with no help”.
The second case is a hospitality company that relies heavily on the tourism industry for events. It had difficulty accessing grants, but eventually it received one from the self-employment income scheme. Its staff have been furloughed, but my constituent tells me that the money is almost gone. If funding for the self-employed is not continued, or furlough kept on by some means until events can safely reopen and a portion of staff wages be reimbursed, the company will go down, and people feel as if they do not have a voice. My constituent told me that she had been shrewd all her life and always kept enough money in case something went badly wrong, but that is not enough to keep the business going for 18 months with no income.
I want to highlight the situation faced by the many seasonal workers in my constituency who work in hospitality and other industries, mainly from March to October. They never started their contracts in the first place, and have been left to discover that the safety net of welfare has many, many holes. The messages from all these businesses and many more in North East Fife is clear. These small businesses, their owners and their staff work incredibly hard year in, year out. The Government’s support has so far worked for them—these businesses are still running and their staff are still employed—but they are all clearly saying that unless there is further support for the tourism industry, it will be game over.
I refer the House to my entry in the Register of Members’ Financial Interests, as a former director of a tourism business that has benefited significantly from the Government’s covid interventions. That said, which tourism business has not? As the former managing director of that tourism business, I operated in England, Scotland and Wales—in many of the constituencies represented in the House today—so I know at first hand the existential difficulties that leisure and tourism businesses have gone through during 2020.
Being closed down by the Government in March, at the very lowest ebb of their seasonal cash flow, had countless thousands of domestic tourism businesses, including my own former business, facing the certainty of liquidation in a matter of weeks. Time really mattered. Every Member of the House will recall the desperate pleas for assistance from fundamentally strong businesses at the very edge of a cash flow crisis, but no one at that time could have foreseen how magnificently the Government were going to respond, and how quickly.
The list of Government interventions is literally too long to fit into a short speech, but we all know that they have provided a truly remarkable lifeline to hundreds of thousands of businesses and protected many millions of jobs. Let me mention one intervention in particular: the temporary reduction in VAT to 5% for hospitality and leisure. That one intervention was transformational for the sector’s recovery once lockdown was relaxed on 4 July, allowing vital cash flow to remain in businesses. It also demonstrates just how distorting high taxes are on the economy, as a 10% reduction has had such an impact, reminding us all that lower taxation directly stimulates economic growth.
The Government’s support measures were designed to protect businesses and employment from the initial economic shock of a V-shaped recession, allowing them to adapt in order to survive and then thrive in the new economic climate. The Government cannot do more than this. I recognise that if a business no longer makes commercial sense in the medium term, they cannot pretend that it does. We cannot pay wages indefinitely for jobs that no longer exist in the real world, but that is not the case for many indoor tourism businesses including coaches, which have been referred to in the debate, English language schools and urban businesses. Can this not be recognised?
What we can do when jobs have gone—and what the Government are doing—is to shift economic assistance towards new employment and training, including in tourism. The kickstart project does exactly that. I have visited a business in my constituency that is already looking to take on 50 kickstarters. This will be a fantastic project that will work really well for the domestic tourism businesses.
I rise to speak in support of many tourism organisations in the wonderful city of Glasgow, which I am so proud to represent. There have been real challenges for many cultural organisations in the city, not least Glasgow Life, the arm’s length organisation of Glasgow City Council that runs our art galleries, museums and sports facilities. Kelvingrove Art Gallery and the Riverside Museum in in my constituency, which have only just reopened, are only able to open on a limited basis and people have to book, so they are really struggling to make the money they need to keep going. Glasgow Life has seen a loss of around £12 million since March. I urge the UK Government to be clear about the Barnett consequentials from the Housing, Communities and Local Government measures that were put in place for England, so that Scotland can see if it can get a share as well.
Smaller organisations such as the Sharmanka Kinetic theatre, the Trongate and Glasgow Police Museum have been able to keep going but their numbers are down, and the effect on the wider tourism economy has had an impact on all museums, whether they are large or small.
In Glasgow, we have benefited hugely for many years from event tourism through the Scottish Event Campus in my constituency. We have the fantastic SSE Hydro, a 14,000-seater venue that has been one of the top 10 venues in the world since opening in 2013, with over 140 events a year. Its closure at the moment has an impact on the surrounding area of Finnieston, which has amazing restaurants and bars, and on the hotels within the wider city as well. I understand from the Scottish Tourism Alliance that hotel capacity in Glasgow is sitting at only about 11% for the next few months. People are clearly put off from coming if they do not know what is going to happen and they cannot plan ahead.
The Scottish Event Campus has been hosting the NHS Louisa Jordan over the past few months and has made a great contribution to that, but we need to recognise that, in doing so and having that instead of the SEC, we are losing out on £136 million a year to the Glasgow economy in the events that the SEC brings in with not just music but conferences, exhibitions and other events bringing in half a million visitors per year to Glasgow.
Lastly, I would like to mention the impact on English language summer schools, such as St Andrew’s College in my constituency. They are seeing a really serious impact, because lots of young people do come and travel to Scotland for these language schools, and they cannot do that now. They bring approximately 10,000 foreign teenagers and employ 500 temporary staff over the summer period. That has gone for them now, and they are very limited in the support they have been able to have. I make a real plea to the UK Government to look more widely at support for the English language teaching sector and to make sure that particular measures are put in place for support through the immigration system as well, so people can come to Glasgow in the future.
I call Sally-Ann Hart—for, I am afraid, one minute.
Thank you, Madam Deputy Speaker. I would like to endorse the comments made today about coaches on behalf of the coach companies in Hastings and Rye—Empress Coaches, Rambler Coaches and Nova Bussing. Tourism is very important to Hastings and Rye, but we are now seeing an increase in benefit claims, with over 14,000 individuals on universal credit as from July 2020. I would like to thank the jobcentre staff, who have been heroic in their efforts to support local people.
This Government have given vital support to tourism and tourism-related businesses throughout coronavirus, and so many of my constituents are enormously grateful for that, but ongoing support is desperately needed. For example, Hastings normally has a buoyant English language school culture, with thousands of students coming every year to stay with families. As well as language tuition, trips are organised to our amazing tourist attractions, and local businesses such as the ABC Student Tours will struggle. I fear these businesses will not survive, which will have a long-term impact on our local economy.
I call the SNP spokesperson, Drew Hendry.
Thank you, Madam Deputy Speaker, or is it now Madam Global Icon—I am not sure—given something said earlier?
What a tour we have had around the nations of the UK and the beautiful and haunting tourism destinations we have, and how appropriate therefore—I say, somewhat modestly—that we now land, at the end of that tour, at the best of all: Inverness, Nairn, Badenoch and Strathspey.
The debate has found an awful lot of commonality, and I congratulate the hon. Member for North Devon (Selaine Saxby) on securing this debate and giving voice to an industry that desperately needs to have its voice heard at this time. As we have heard from the contributions of Members around this Chamber, it is facing very specific and difficult circumstances. I hope that the Minister will listen with his ears wide open to the difficulties that it faces due to the pandemic and the restrictions that have been placed on it. The hon. Lady talked about the Chancellor saying, “whatever it takes”. Well, now is the time for the Chancellor to stand up and do whatever it takes to support the people, businesses and communities that are going to be affected.
As we have heard from both sides of the Chamber, things cannot go back to normal in the short term. We have heard from hon. Members about the fact that supporting venues are closed and those streams of income are not available to support many parts of the economy. Specific sector support is required at this time, and there is the threat of the loss of specific skills, which we may never recover from. There will be huge economic effects.
The hon. Member for Arfon (Hywel Williams) talked about the need for responsible tourism. It is a two-way street. We want people to visit our tourism economies and support them, but we also want people to leave them in the beautiful state they found them in, without a repeat of some of the damage and careless behaviour we have seen—I have certainly seen it in my constituency. As he said, it is also important to get clarity on where constituents can get advice from when Ministers say in this Chamber that Government advice is meant for England only, not Wales and Scotland.
As my hon. Friend the Member for Edinburgh East (Tommy Sheppard) said, we cannot overstate the harm of the restrictions to the industry or, indeed, the return of public confidence that we will need to see to support the tourism sector. Several Members, including my hon. Friend the Member for Angus (Dave Doogan), talked about the unique effect on the coach sector, which needs bespoke support to supply the infrastructure required to move people across the country so that they can enjoy the tourism on offer.
We heard again and again calls for the Government to either extend the cut to VAT or make it permanent. There is no excuse for not doing so. We are already one of the most highly taxed countries in the whole European Union. [Interruption.] Well, Scotland is a country, and it is highly taxed on VAT. There would be benefits from extending that cut or making it permanent, which I would like to see.
Tourism businesses across our constituencies are tackling the crisis with positivity. They are doing their best, and some are actually doing very well—they are rising to the challenge—but few sectors are directly hit as badly as tourism and hospitality, which effectively face three winters, with only an autumn of a few months in between to sustain them throughout that period. We welcomed the Government borrowing to fund the job retention scheme, but we need it to be extended now more than ever. Businesses will find it more expensive to be open without furlough during those quiet months when they have no bookings than when they were closed during the pandemic restrictions.
There will be a disproportionate effect on low-income families and young people unless some work is done. In Scotland, the Scottish Government have a youth guarantee scheme, but if furlough is not continued and that support will not be there, this Government need to ensure that Scotland has the powers devolved to take action itself, including removing restrictions on borrowing.
The Scottish Government have put in place a tourism taskforce to guide the industry towards a safe, strong and green recovery. If there is an opportunity here, it is to look at how we can change the industry to make it better for the future. The Scottish Government have introduced two new funding packages worth £15 million, including a hotel recovery programme and grants from VisitScotland for self-catering businesses.
The kickstart scheme is not easily available to small employers, and the geography of a rural economy prevents many from clubbing together to take advantage of it. For those who are employed—especially young people—there are further risks, such as being exposed to exploitation and not getting a living wage. The UK Government should take heed of the call from my hon. Friend the Member for Glasgow Central (Alison Thewliss) yesterday and urgently provide further support for young people, including a real living wage for those on the scheme.
In conclusion, there is a need to protect the future of this sector and the work within it, especially for young people, and to provide support for those who have been excluded so far and face this winter without the ability to keep themselves going. The Government should look to convert loans to grants or equity, furlough should be extended and they should extend or cut VAT permanently. Failure to support businesses and people in this sector will cause lasting harm to the wider economy. If the furlough scheme is wound up, it will show people that they cannot trust this UK Government to protect them when the chips are down. If the Government are not willing to do those things, we must have the full powers in Scotland to do them ourselves—or, even better, we must have the full powers of a normal independent country to meet the needs of Scotland’s people.
I rise to sum up what has been, as such debates often are, a very informative debate. Hon. Members have spoken with great passion about the issues facing their constituencies. I particularly thank the hon. Member for North Devon (Selaine Saxby), who secured the debate and spoke passionately about the need to support our coastal communities.
The UK tourism industry is the sixth-largest in the world. It employs 3.3 million people and generates revenue of £155.4 billion. In this debate, we have toured the nation, and this summer, I myself visited many different parts of our tourism sector to see the impact of covid, the effect of Government support and what additional measures the sector needed. We cannot truly understand the impact unless we have seen it at first hand.
I visited the zoos in London and Knowsley, close to the constituency of my hon. Friend the Member for Garston and Halewood (Maria Eagle), who made excellent points about reduced capacity first highlighted on my visit to Merseyside, and the zoo in Newquay. I see the hon. Member for St Austell and Newquay (Steve Double) in his place, but unfortunately we did not reach him. I also visited the Eden Project in his constituency and went paddle boarding on the Fowey.
I visited aquariums in Brighton and Plymouth, Hever castle and Powderham castle, the site of the proposed Eden Project North, in Morecambe, and the winter gardens there. I also went to the Manchester museums and galleries and Crownhill fort in Plymouth. I visited Brighton pier and the i360, and the Van Gogh immersive experience in York, in the constituency of my hon. Friend the Member for York Central (Rachael Maskell), who made an excellent speech about need to return confidence to our sector. Although I did not visit Warwick castle this summer, I did visit when I was a child, and I am sure my hon. Friend the Member for Warwick and Leamington (Matt Western) will invite me back again.
I also stayed at the Seven Bays caravan park in north Cornwall, and I am pleased that the hon. Member for Cities of London and Westminster (Nickie Aiken) stayed at Unison’s Croyde Bay caravan park. I met hotel, restaurant and bar owners around the country, sometimes in person and sometimes on Zoom. Each had a unique perspective, but all had the same central problem: the huge financial black hole caused by the three-and-a-half-month closure of their organisations and the huge drop in visitor numbers. They all spoke about their fears about the coming winter and their future prospects.
Tourism was always going to be hit hard by a pandemic that meant people had to stay at home. When some of the restrictions were lifted in June, when the sun shone and the newspapers led with photos of bursting beaches and packed-out towns, it seemed to many that summer and the tourism industry underpinning it might just have been spared, but tourism reopened later than any other industry. Despite what the front pages might have shown, it has been, and still is, operating at severely restricted capacity. The industry might have had an okay August, but it lost Easter, May half term, two bank holidays and the whole of June. Those four months are crucial to the industry. Some 92% of tourism businesses said that their revenue had decreased by more than 50% as a result—a point made by the hon. Members for Edinburgh East (Tommy Sheppard), East Devon (Simon Jupp) and Glasgow Central (Alison Thewliss). This means that the industry is effectively operating through three consecutive winters: the winters of 2019 and 2020 and the winter of coronavirus.
Visit Britain has forecast that tourism revenue in 2020 will decrease by £68.8 billion, which equates to a loss of more than 1 million full-time jobs. Including the 300,000 outlying jobs also at risk, the figure is close to 1.35 million—a third of all tourism jobs. That is 1.35 million full-time jobs that could be lost in the sector, 1.35 million people—people with bills, people with families to feed and people who need and want to work, to provide and contribute.
The Chancellor described his choice to end furlough next month as one of the most difficult decisions. I know the Minister, who is always very kind when we talk, is listening diligently, and I ask that he listen to the tourism industry and reconsider the decision to end furlough. The loss of more than 1 million jobs would be devastating, not just for individual families and households, but for the tourism industry and the health of our whole economy.
With much of the tourism industry yet to reopen and the main summer tourismt season ending in September, ending the furlough scheme means two things: mass unemployment and mass business closures. It is easy to think about the tourism industry from the perspective of the consumer—we can all imagine ourselves sacrificing our holiday to save lives during a deadly pandemic—but we must remember that tourism means jobs. We know that the UK tourism industry is one of our biggest employers and that it is worth 9% of GDP, but many people do not realise that it is also the largest non-governmental mechanism for transferring wealth from urban to rural and seaside communities—a point made by the hon. Member for Arfon (Hywel Williams). These rural and seaside economies are important. Coastal tourism, pre covid, was valued at £13.7 billion in England and £17.1 billion in GB. Tourism employs 20% of the workforce in most coastal towns and more than 50% in many, including Newquay, St Ives, Skegness, Mablethorpe, Cleveleys, Whitby and Minehead. The hon. Member for Tiverton and Honiton (Neil Parish) made the excellent point that the food industry is inextricably linked to the prospects of tourism. Jobs in coastal towns have been disproportionately affected during the pandemic, and covid has cost seaside towns across the country £10.3 billion in lost revenue, according to the National Coastal Tourism Academy. The hon. Member for Bath (Wera Hobhouse) correctly made the point that destination management organisations need support to help these economies, and the hon. Member for Totnes (Anthony Mangnall) spoke about promoting domestic tourism as a whole.
That is not say that things were rosy for these coastal regions before covid. It is no secret that many seaside towns in Britain have been struggling for many years. Poverty, inequality and deprivation presided over by successive austerity-driven Conservative Governments have meant that many coastal towns have been in social and economic crisis since long before the pandemic swept ashore. My right hon. and learned Friend the Member for Holborn and St Pancras (Keir Starmer), when he was in Cornwall, said:
“We need a targeted extension of the furlough scheme for the hardest-hit sectors and proper support in place to help those who are unemployed back into work. People are worried about their job prospects. The Labour Party is focused on fighting for every job and every part of the country.”
He is of course absolutely right. He said that in a coastal town because he and we all know that this must include revitalising our coastal communities, reviving jobs and industries, and diversifying these economies. The current crisis has made it patently clear that this is more urgent than ever.
We cannot discuss tourism in earnest without acknowledging the hospitality industry—one of the key forces powering the UK’s tourism economy. Hotels, pubs and restaurants rely on the tourist trade, and vice versa. Equally, the coach industry that delivers the customers to the hospitality industry has been absolutely decimated by this crisis—a point well made by the hon. Members for Angus (Dave Doogan) and for Sedgefield (Paul Howell). While the Chancellor seemingly saved the day with the eat out to help out scheme—and it cannot be denied that the nation ate out with gusto—the fact remains that only half of restaurants are open and two thirds of businesses are still not making a profit. The number of staff furloughed still remains similar to July, with 51% of hospitality staff still not back at work in August. Taken with the fact that over 80% of employees in the tourism industry have been furloughed, compared with 32% of the total UK workforce, it is clear that ending support for everyone at the end of October will be disastrous. It is a one-size-fits-all approach that is destined to fail. We need a targeted extension to the furlough scheme to protect our most vulnerable workers and industries through this critical time. I am pleased that the hon. Members for North West Norfolk (James Wild) and for North East Fife (Wendy Chamberlain) made these points.
As a party, we are also calling for a £1.7 billion hospitality and high streets fightback fund to help tourism and hospitality businesses that are unable to fully trade. We are calling for this because Labour recognises that the Government’s one-size-fits-all approach to jobs risks tourism falling through the cracks. As a minimum, the Government, rather than clawing back the underspend in grants, need to redeploy it to other industries, particularly those struggling in the visitor economy. While the epidemic has dealt a devastating blow to our tourism industry, with a swift and urgent Government intervention there is an opportunity not just for survival but for recovery and growth—an opportunity to limit the long-term impact of covid-19 not just on people’s livelihoods and businesses but on our towns and our collective heritage and history.
I call the Minister, Nigel Huddleston.
Thank you, Madam Deputy Speaker. Global icon, global goddess —whatever we need to call you when you are in the Chair, I would never question you.
It is a pleasure to respond on behalf of the Government to today’s important debate as the truncated summer season comes to a close. I thank my hon. Friend the Member for North Devon (Selaine Saxby) for securing the debate. She has been a great champion for tourism ever since she was elected last year.
I thank all Members from across the House for the constructive and positive tone of this debate, which shows that we can unite. It is a clear demonstration of how important the tourism industry is right across the UK. While tourism is indeed a devolved matter, as mentioned by many Members, I do have good relationships and frequent conversations with my counterparts in the devolved Administrations, and we are very much singing from the same hymn sheet. Due to time constraints, I might not be able to respond to every question that has been asked, but I will endeavour to have one-on-one conversations outside the Chamber on any issues that I am unable to address today. I am also aware that some hon. Members were unable to speak today. If hon. Members wish to intervene, I will prioritise those who have not yet participated—
Will the Minister give way?
I should have seen that coming. [Laughter.]
It sounded like an invitation. May I first place on the record my thanks to the Minister for all his incredible hard work over the past few months to support the tourism and hospitality sector? He would not want to be outdone by the shadow Minister, so will he come to Cornwall soon? We have heard a lot today about the support that the Government have given the sector, but I also wish to place on the record my thanks to the many businesses in the sector that have played their part in helping us get through the lockdown, particularly those that provided emergency accommodation for homeless people and for key workers who could not go back to their family homes. Will he join me in thanking them?
Absolutely, and I hope to visit my hon. Friend’s constituency in the next week or so. He makes an important point, because those businesses, despite all the struggles the sector has faced, have stepped up to the plate in so many ways, whether food distribution, helping local communities or providing accommodation for the homeless. I applaud the sector for all that it has done in these incredibly difficult times.
There is a particular town in my constituency that has experienced a bit of a tourism boom this year, having gained international fame earlier this summer, so may I extend to the Minister my warmest invitation to visit Barnard Castle and see the best that the north-east has to offer?
I would be delighted to do so when I visit the north-east in the near future.
At the start of the year, the prospects for the tourism industry, and for all its important sectors—inbound, domestic and outbound—looked very positive. As I took on this role, I was looking forward to yet another bumper year. Some 41 million visitors travelled to the UK from overseas in 2019, and it looked like we were going to have 100 million domestic visitors for the first time. The outbound sector, which is a really important part of this economy, was also doing well. But covid had other plans.
The virus is undoubtedly the biggest crisis that the global tourism industry has faced since the second world war. It has had a far greater impact than foot and mouth, 9/11, the financial crisis and the 7/7 bombings. But the Government did act quickly. Many hon. Members have mentioned the interventionist measures that we have constructed, such as the jobs retention scheme, business rates relief, grants, a variety of loan schemes and many other measures, including support for destination marketing organisations, which are a really important sector that many hon. Member have mentioned today.
May I place on the record my thanks for everything that you have done for me and for my constituents? I know that you have already visited, but you are very welcome to come back for a Cromer crab sandwich in the near future. I did not get to speak today, but I know that you will take on board many of the initiatives that have been put forward. Can you also spare a thought for the impact that last night’s announcements will have on the tourism industry, particularly the effect of the six-person limit on larger holiday lets? Can I finally say—
Order. I think that the hon. Gentleman has had quite a good intervention. I really have to say to him that it is very important that Members remember to speak through the Chair, so he should not refer to the Minister as “you.”
My hon. Friend makes some important points, and I am happy to continue the dialogue outside the Chamber, where he can call me anything he likes.
The Government have put in place a number of measures and will of course continue to monitor the situation. In July, as lockdown restrictions began to ease, we wanted to ensure that tourism businesses were in the best position as they began to open. We therefore implemented a whole range of additional measures, such as the VAT cut for tourism, eat out to help out, the Enjoy Summer Safely campaign, the work that VisitBritain has done and its “We’re good to go” standard, and of course changing regulations to allow bars, pubs and restaurants to extend on to the pavement and into the street, given the capacity challenges.
The additional arts and culture support package, which my hon. Friend the Member for Cities of London and Westminster (Nickie Aiken) mentioned, is vital to sustain the economy through the support it has given to heritage venues, theatres, museums, galleries and other draws for our tourism economy. Taken together, these measures have helped the tourism sector to reopen and start on the road to recovery, but there is much more to do.
To fuel that road to recovery, will the Minister give favourable consideration to Visit East of England’s bid for Suffolk and Norfolk to be a tourism zone?
Tourism action zones were proposed in the sector deal of a couple of years ago. As we approach the spending review, we are discussing with the Treasury how to execute those, and I will be having further conversations on the subject.
We have seen some positive signs in the past few months. The hotel and accommodation occupancy rates in coastal and rural areas have been relatively high—in some cases, back to 2019 levels by the end of August. Self-catering cottages, camp sites, caravan and holiday parks have generally reported a strong summer and many outdoor attractions have also seen high levels of footfall, but many outdoor and especially indoor attractions remain subject to capacity constraints. Many city areas continue to struggle, in part because they are especially reliant on and exposed to inbound tourism and business travel and, of course, we still have quarantine measures in place.
We will continue to monitor all this closely and take further action where necessary, but it is not true to say that the measures already in place will not help over the next few months. Businesses will continue to benefit from the VAT cut until 12 January; the furlough scheme continues until the end of October; Visit England and Visit Britain will soon launch a new domestic campaign; and we are encouraging local planning authorities to relax planning conditions on caravan parks, camp sites and holiday parks to extend the season.
The Minister has outlined in great detail the large amount of help offered to traders and businesses in seaside resorts such as Cleethorpes, but what we are interested in is extending that support. I would appreciate it if he developed that part of his speech. Also, bus and coach operators have been mentioned. Will he pay particular attention to the bonded coach holidays scheme, which is a real burden on many small operators?
Several hon. Members mentioned those points. On the coach sector in particular, I assure the House that we recognise its important role in the tourism sector, and we are engaging with the Department for Transport on the challenges it faces.
We are aware that several sectors are yet to reopen. Several hon. Members mentioned the important events, exhibitions and business conference sector, and we are continuing to work with the sector. I had the pleasure of attending a successful event last week in one of the pilot schemes for the business events sector.
There is plenty of work to do, and many Members have offered good ideas. I will happily continue the dialogue with many of them. Perhaps the most prevalent request today was that the VAT reduction be extended—that was mentioned by my hon. Friends the Member for North Devon, for Isle of Wight (Bob Seely), for Thirsk and Malton (Kevin Hollinrake), for Tiverton and Honiton (Neil Parish), for East Devon (Simon Jupp), for Guildford (Angela Richardson), for Totnes (Anthony Mangnall) and for North West Norfolk (James Wild), the hon. Members for Arfon (Hywel Williams) and for Warwick and Leamington (Matt Western), and the right hon. Member for Orkney and Shetland (Mr Carmichael), and many others. Perhaps it would have been easier to mention those who did not make that request, Madam Deputy Speaker. I think the message is well understood by me and hopefully the Chancellor.
As for the extension of the furlough scheme, as my hon. Friend the Member for Broadland (Jerome Mayhew) acknowledged, our right hon. Friend the Chancellor has said that that scheme cannot continue indefinitely. However, that does not mean that further intervention measures will not be taken where necessary.
I hope the measures set out by me and others today give the House confidence that the Government take the impact of covid on the tourism sector very seriously. We will continue to work closely with all stakeholders. I think today’s debate shows that the industry’s voice has been heard by the Government and Members of Parliament.
I thank the Minister for those encouraging words. I look forward to working with him and his team, who have been fantastic throughout the pandemic, to nurture the green shoots of recovery in our vital tourism sector.
I thank the Backbench Business Committee for enabling this debate to take place, and all the right hon. and hon. Members who contributed. I also thank for their support those hon. Members who were unable to come into the Chamber this afternoon. On behalf of the tourism sector, I thank all the participants. As the one-woman tourist board for North Devon, I look forward to welcoming everyone to the beaches as the winter progresses.
Question put and agreed to.
That this House has considered support for the tourism industry after the covid-19 lockdown.