asked Her Majesty’s Government:

What funding and other resources they plan for promoting British tourism in the light of economic and competitive challenges to the industry.

My Lords, the Government do not underestimate the challenges facing the industry. VisitBritain is leading a strategic review of tourism support and we are confident that this will improve VisitBritain’s ability to market Britain internationally and England at home. VisitBritain’s grant-in-aid for 2008-09 is set at £47.9 million for 2007-08. DCMS is also contributing £5.4 million in 2006-09 to support the tourism responsibilities of the regional development agencies.

My Lords, in the light of falling inbound tourism and the 2012 Olympics, it seems extraordinary that over the next three years the Government are cutting the budget of VisitBritain by 20 per cent. That is on top of deep cuts in previous years. Ninety per cent of the sector is made up of small and medium-sized enterprises. The Government now claim to be the champion of SMEs. Will they now make sure that VisitBritain has the budget that it so badly needs to do the job of promoting tourism?

My Lords, the issues surrounding VisitBritain are not just a question of resources but about the priorities that it adopts and the way in which it works. The strategic review which I mentioned in my Answer is designed to identify how VisitBritain can fulfil its role more effectively in the light of the opportunities which will develop in the run-up to the 2012 Olympics, as the noble Lord suggested in his question.

My Lords, surely the Government have done an extremely good job for the British tourist industry by ensuring that the pound is lower than it has been for a long time and will continue to descend.

My Lords, the noble Lord is as perceptive as ever in seeing the change in the value of the pound. His economics, for once, are faultless: namely, that that will make for a less expensive experience for visitors to Britain.

My Lords, given the important contribution that heritage churches and cathedrals make to our tourism industry, does the Minister agree that they deserve sympathetic encouragement in both financial and promotional terms?

My Lords, I do not have the slightest doubt that ecclesiastical buildings—the cathedrals and churches—are a very important part of the attractions of Britain. I am used to seeing France boast about its cathedrals, but there is a great deal of co-operation between French cathedrals and British ones on occasions when it comes to promotion. I recall when Canterbury linked up with Rouen and another French cathedral in a joint project. That is all to be welcomed.

My Lords, what signal do the Government think they are sending our sixth largest industry when they see the chairmanship of VisitBritain as a six-days-a-month job and advertise the chairmanship of VisitEngland as a one-day-a-week job? The fact that the present chairman of VisitBritain was a former chief executive of the Bradford & Bingley building society does not mean that he should be punished or taken advantage of in this way.

My Lords, I will ignore that last point. On the more general issue, I am sure the noble Lord will appreciate, as all Members of this House do, that leadership of an organisation may not require a huge amount of time. We have many very important and hugely successful quangos, which are run on the basis of the chief executive being full-time but the chairman serving for one or two days a month or a little more frequently. It depends on the quality of leadership.

My Lords, does the Minister agree that one thing that would help to encourage visitors to come to Britain would be to reduce the rate of VAT on hotels? It is perhaps not always recognised that Britain is one of only three countries in Europe that charge the full rate of VAT on hotels, thus disadvantaging us competitively against other European destinations.

My Lords, my noble friend will recognise that VAT across Europe is an ever thorny issue. He will also know of the substantial investment in accommodation in Britain in recent years. Recognition is due of the enhanced quality of much provision. I do not think that the slightly higher rate of VAT necessarily has the detrimental effect that he suggests.

My Lords, does the Minister recognise that, in the current extremely grave economic situation, when many manufacturing industries may find it difficult to take advantage of the more advantageous exchange rate, tourism and all the businesses involved in it are particularly well placed? The UK was getting a reputation for being too expensive. Now, suddenly, one of the few bright spots in the present dramatic situation could be if the Government and all the organisations concerned put real effort behind this. This is one way in which we could see a real improvement, and quickly, in the economic situation.

My Lords, I agree with the noble Lord, who has expressed fluently and at length the pithy comments of the noble Lord, Lord Pearson, on this issue. There is no doubt that tourism in this country should benefit from the position of the exchange rate. It has quite a significant impact on British prices, which is obviously key when people are choosing whether to come here or not.

My Lords, will the Minister do all he can to encourage the reduction of queues at Heathrow Airport, which must be a major disincentive for tourists coming into this country who might have to queue for well over an hour?

My Lords, there is no doubt that Heathrow needs improvements, although it will be appreciated on all sides of the House that after the calamitous start to terminal 5, which produced such a furore in the nation last year, we get relatively few complaints about the operation of that terminal at the present time.

My Lords, following the observations of the noble Lord, Lord King, does my noble friend agree that, among the industries that have been most successful in attracting tourism into the country, the arts and culture are very high on the list? Following an excellent settlement in the most recent Comprehensive Spending Review, will my noble friend ensure that the Government’s support is sustained in the years to come?

My Lords, I am glad that my noble friend has paid tribute to the arts. There is no doubt that there are many hugely successful institutions. It may be invidious to identify one, but no one can ignore the enormous success of the British Museum in recent years, which has acted as a lodestar for improvements right across that sector. Britain is famous for its arts provision, which will be an important part of the cultural Olympiad leading up to the 2012 Olympics.