Tourism: London

19:36:00

Baroness Gardner of Parkes
asked Her Majesty’s Government what assessment they have made of the value of the hospitality and tourist industry to the economy of London.

The noble Baroness said: My Lords, it is a gloriously opportune date on which to congratulate the new Mayor of London and to tell him that we expect his policies and his actions to make London an even better city to visit than it is now. He will be judged by residents on results and on the way in which lives are improved. Tourism is a huge source of revenue for London and all residents here, even if they get disgruntled sometimes when crowds of visitors make life slower for them. We must value the contribution that tourism and the money that it produces make to London’s amenities. London’s visitor economy—overseas and domestic—totalled £10.9 billion in 2007.

I came to London as a visitor in the 1950s, planning to spend six months in the UK and mainland Europe before returning to Australia; I am still here half a century later. As a keen tourist myself, I have a list of things that I believe most tourists seek: first, personal security; secondly, an interesting place to visit; thirdly, a welcome arrival; fourthly, good value for money; fifthly, special events; sixthly, permanent attractions; seventhly, accommodation at all price levels; eighthly, good local transport; ninthly, clear instructions; 10thly, that a place be child-friendly; and finally, that it be disability-friendly. Some of those items go together, but I intend to outline each one separately, as they are all important.

I put personal security as the top priority. Tourists will not visit if they believe that their lives are at risk. That does not mean that a country has to be on a list that you are officially advised against visiting; bad publicity and a perception of danger are enough to put people off. London has survived the terrorist attacks, but it is essential that the new mayor creates a safer London.

On interesting places to visit, London has a very rich cultural heritage, with famous galleries, museums and ceremonial events such as Changing the Guard, which are a great draw card. Pageantry delights visitors, be it at the Tower of London, a ceremonial procession for a state visit, or the annual State Opening of Parliament. West End theatres have a worldwide reputation and, in recent years, outdoor ice skating in winter has added a new recreation and charm. The varieties of entertainment are almost unlimited.

On welcome arrival, Eurostar brings visitors to the heart of the capital at the new St Pancras terminal, but Heathrow holds the key for visitors and brings in even more of them. The fast train link from the airport to Paddington has helped, and there is a Tube connection. The fiasco of terminal 5 has made headlines throughout the world and done a lot of damage to the British reputation. Visitors will expect improvements, or they will use other airlines, terminals and airports or simply not come. It is essential that a visitor’s first experience in the UK should be a pleasant and welcoming arrival. As an Australian passport holder, my experience is finding immigration desks undermanned at Heathrow, causing unacceptable delays for passengers who are often exhausted by their long journeys.

Business tourism accounts for 25 per cent of visits to London but 34 per cent of expenditure. The average daily spend of a business visitor is £159 compared to £84 for a leisure visitor. This makes it clear how important it is for London to retain its image of a successful and desirable place to do business. We must not frighten away from the UK these important businesspeople by creating a threatening business tax structure.

On the issue of good value for money, the drop in the value of the pound means that people find that their money goes further, so they are more willing to spend it on attractions and shopping in London. Well prepared good food is part of this, too. My husband served for many years as a member of the London Tourist Board and at that time Paris was the big challenger and London was missing opportunities. In 2007 London was second only to New York and ahead of Madrid in attracting numbers of visitors.

People plan their trips around special events—personal and public. Right now we are all thinking about and planning for the big one—the 2012 Olympics. This is a huge task and the costs appear to be running away. One of the benefits for London will be what remains for locals to use afterwards, such as a greatly improved transport system. Transport is vital and worked well in Sydney, but I recall the total breakdown of transport at the Atlanta Olympics and the embarrassment that that caused. With any and all Olympic special preparations, the lesson learnt from terminal 5 is that they must be completed and trialled thoroughly, well in advance of the date of the Games. Only by these means can we avoid being held to ransom by overtime rates to avoid meltdown of the new systems.

Hotel rooms do not seem to be a problem as Athens had 18,000, Sydney had 24,000, and London has 135,000 rooms. Day visitors from the continent will come by Eurostar. Some of the permanent attractions come in as special events. London has so many world-renowned galleries, museums and other attractions. The British Museum is always popular but never more so than with the recent special exhibition of the terracotta warriors. The Royal Academy scored with the Russian exhibition. The London Eye, which seemed controversial when installed, has now been made a permanent feature and it is a super experience for people of any age.

On the issue of accommodation at all price levels, I was rather stunned to see in the press that rooms for VIPs for the Olympics had been block-booked by the organisers at the top Park Lane hotels at up to £3,000 per night. Rooms in London in the top 25 hotels that were members of the British Hospitality Association averaged £460 per night and operated at 93 per cent capacity. Across the 130,000 rooms in London, the average cost was £70 to £80 per night with a 98 per cent occupancy rate. People may well be offering accommodation in private homes, too.

I find that the buses and Tube in London provide good transport but it is not easy for visitors to understand how to pay on the buses that require a ticket to be purchased in advance of boarding, and I regularly see perplexed visitors arguing with bus drivers. It would help if travelcards or Oyster cards were more widely available at the point of arrival in London and their use explained in multilingual leaflets and posters. Why can these not be bought easily at kiosks and local shops as in France and Australia?

There is no better way to give clear information than by the use of internationally recognised symbols that do not require English language. A green light at a crossing is understood by all. So many tourists are family units and need to know which establishments are appropriate for children. London enjoys beautiful parks and open spaces, a splendid zoo, and for many children the London Dungeon is the first choice.

Shops should all now have disabled access. Heritage buildings have done their best but in some cases compromise has been necessary. Buses have ramps, and it is essential that they are in working order as wheelchair users depend on them. There have been considerable improvements in the past few years. I appreciate that there are particular problems in Underground stations, which may be below property that is not in their ownership. It is not a simple matter. Even stations with lifts usually have a few steps down to the platform, so are unsuitable for wheelchair access. It should be possible to modify some of those. New stations have disabled access and you can, for example, get on to the Circle line at Westminster station. That is not much benefit unless you just want to ride the full circle, as the only place where you can get off is back at Westminster.

London’s visitor economy was worth about £15 billion in 2007, which is 10 per cent of London’s GDP. Tourism supports 280,000 full-time jobs. The benefits could be even greater if the young London unemployed chose to work in the hospitality and tourist industry. For some reason, in London—I stress in London, as it is not the same in other parts of the country—these jobs are not filled by local people. There is a need for training opportunities and many of these should be on-the-job training for school leavers who would find the work interesting and fulfilling.

I believe in an aspirational society. We must make it clear that being part of the hospitality industry in London can be very exciting and can open the world to those involved. It is important to ensure that Londoners can benefit from this work, which is such a valuable part of London life.

19:47:00

Baroness Valentine
My Lords, I thank the noble Baroness, Lady Gardner, for calling this timely debate, and will touch on many of the themes that she has already introduced.

Visit London tells us that last year there were 16 million visitors to London, and, as the noble Baroness, Lady Gardner, said, they contributed an estimated £15 billion to the economy. Many of these visitors go on to visit the UK. London is the natural gateway to Britain.

In just four years, the Olympic curtain will be raised and, as the directors of the show, we must be ready. We won the Olympics based on our claims for their legacy, and hospitality and tourism can be one of the most important facets of that legacy. Aside from the extra tourism spend accompanying the Games, 2012 is a trigger to upgrade our visitor offer so that those visiting recommend the capital to their friends, and to employ more Londoners in a sector that is traditionally a magnet for migrant workers.

This, I am afraid, is the crunch. London must have two things if it is to realise these benefits: a transformed quality of visitor experience; and a workforce with the skills to do the hospitality and leisure jobs. In 2012 London will be on display, with hundreds of thousands of people passing through the East End, the West End, and dare I say it, Heathrow. Let me start at the airport. Heathrow was last year ranked 90 out of 101 international airports for overall passenger service. I am delighted that BAA and BA have fastened their seatbelts for take off to remedy recent local difficulties. We have four years to get the experience at London’s airports back to world class.

I suggest a couple of steps along the way. There should be one owner of terminal waiting times, whether airline or airport operator, with the primary responsibility for getting the passenger off the aeroplane and through the airport with the minimum hassle. The Home Office should set itself targets for queues at immigration, which progressively decline over the four years, and it must commit itself to delivering the staff resource needed to meet them, which, as the noble Baroness, Lady Gardner, alluded, means more immigration officers, not fewer. And please, BAA, can we have Heathrow East open in time for the flame to be lit, rather than after it is extinguished? By the time we get to 2012, visitors must be made to feel welcome from touch-down to take-off.

From Heathrow to the West End—the heart of one of the world's most famous cities—we find the London Eye, Buckingham Palace, the British Museum, a renovated South Bank and a wonderful variety of restaurants feeding, and fed by, London's cosmopolitan people. London's theatres have never been more popular. They contribute £1.5 billion per year to the capital’s economy, yet their buildings and facilities owe more to the 19th than the 21st century. Surely, in the next four years, owners and government could find a way to upgrade at least some of these buildings in time for 2012; I note that several of us will be back here tomorrow debating this precise issue.

However, some of London's iconic streets do not have the quality feel of the European boulevards. The West End is busy in an ugly way: traffic congestion and pollution. Compared with staging the Olympics, improving our streetscapes ought to be simple. Now is the time for central London boroughs, working with the new mayor, to create a deliverable and imaginative plan for upgrading their public realm in the next four years. Renovated streets, pavements, meeting places and lighting are critical, but we must also show imagination. We must help visitors find their way. There are already plans for signposting walking routes across the city, which could allow for pauses at traffic-free oases brightened by public art, events and animation. We have to make the West End the best end.

Finally, what of east London? The Olympic organisations have to get the venues ready and prepare for the event itself. They seem to be making good progress. However, there is an Olympic opportunity to make sense of the visitor attractions in this area: the O2, ExCeL and the new aquarium, Biota, on top of the venues.

A further thought: after many years of debate, London remains the only major city in Europe to lack a convention centre such as the Palais des Congrès in Paris, to host the largest, most prestigious—and, of course, most profitable—conferences. We must not forget business travellers to London, who are the most valuable contributors to our capital’s hospitality and tourism industry.

The five boroughs united by the Olympics are also united by high unemployment. As a region, London has the highest unemployment rate in the UK. We have a new London Skills and Employment Board, established recently with a remit to match training provision to the needs of employers and would-be employees. Its employer accord guarantees interviews to unemployed applicants who have the necessary skills, for up to 30,000 additional jobs surrounding the Games. It is vital that the hospitality and tourism industries sign up to such initiatives wholeheartedly. We must equip the people of London to take advantage of the benefits coming our way, and not remain in a situation in which some of the cities’ largest employers put jobs on a website and are inundated with applications—not one of them from a Londoner.

Making the most of the Olympics for London's tourism sector is not a solo performance. It requires a large cast. If London is to take a bow to a standing ovation from both visitors and residents alike in 2012, we must have a script worthy of the occasion and of the world's leading city. If we do that, the contribution of tourism to London and the UK economy can only get better.

19:53:00

Lord Harrison
My Lords, the noble Baroness, Lady Gardner, is an expert on all subjects, from Tasmania to toothaches and tourism. I congratulate her on how she introduced the debate tonight on tourism, the world’s largest industry and the fourth most important industry in the United Kingdom.

Last week, in London, Boris Johnson was voted in. He, of course, is a tourist attraction in himself. Indeed, the Times on Saturday reported that Romanian student Irina Paletscu asked journalists queuing outside City Hall:

“It is The Boris, yes?”
 

Now, the Boris offers us a new opportunity, especially working with Visit London and the London Development Agency. I hope that two things can happen. First, I hope that my Government will indeed work with the Boris. Whatever enmities are there must be set aside. We must help London do its best to produce jobs for London and the country. Secondly, Boris does not know very much; I do not think that he knows an awful lot about the tourism industry. There is a golden opportunity to teach him about it. I must say that he shares that with many other politicians, who are wholly ignorant about tourism. I wrote a little book many years ago called Tourism Means Jobs to try to illustrate that. Politicians do not understand tourism, partly because it is so successful, partly because it deals with leisure and pleasure and they do not take it seriously, and partly because it is so disparate and varied and involves so many small businesses. Here is an opportunity to get the Boris to understand and do something about it.

My advice to Boris on tourism policy is that what is good for London is therefore good for tourists and visitors. A classic example illustrated so well tonight by the noble Baroness, Lady Gardner, has been transport. Get the transport right for the residents of London and you begin to get it right for tourists and visitors who come here. There are nevertheless complementary and buttressing features of our tourism policy which must identify specific problems about tourism and London. One example from Visit London is that while, happily, overseas visitors to London rose in 2006, we are losing domestic visitors from the United Kingdom. We must ask ourselves why that is and begin to remedy it.

As the noble Baroness, Lady Gardner, has mentioned, business tourism for London is crucial. One in four tourists is a business tourist, and they of course have a higher spend. One of Visit London’s five objectives is to encourage and exploit that. However, the vexed problem of our airports, which has been mentioned tonight, must be tackled. Otherwise, we will begin to lose the business tourist and, with them, the businesses, as well as London as a financial sector.

We must also pay attention to improved training within the sector and knowledge of the tourism product. So many times, not just in London but elsewhere in the country, when I visit a pub and go for one of the guest beers, I ask where it comes from. Quite often, the person behind the bar does not know. Now, they should know that, because it is information about the product that should be given to the visitor, the tourist or interested person. Last week, I was sitting in a London pub and asked for a pint of bitter. The barmaid said, “It is green”, and produced a pint of green bitter; it tasted perfectly all right. Back at my table, I was asked by five American tourists at the next table what it was, where it came from and whether it tasted nice. I was not able to tell them because the person serving the green beer was not able to tell me: she just did not know. We must improve the whole level of training for those working in the industry, to increase what they know about the products they serve.

London tourism is of course currently much supported by young migrants from eastern Europe as well as the ANZAC backpackers. It would be an irony if some of them are returning to eastern Europe. Some of the new sources of visitors to London are the accession countries which came into the European Union so recently. Of course, having come from service industries in their own countries and having the languages, they have all the natural skills. Again—I hope that the Minister can reply to this—it is essential that we do something about language tuition as way of welcoming people to London and, indeed, exploiting the fact that London is so multilingual. Let us take advantage of it.

I am going to lead my noble friend on to dangerous ground by reminding him of the euro. I have been passionately in favour of the United Kingdom adopting the euro, but things have come home to roost as we have not made the decision to enter the euro, and we now impoverish ourselves and make life more difficult, particularly for the tourism industry where the exchange rate means that the tourist coming in is at a loss. It also means that when multi-destination tours are offered to overseas visitors, there is an inducement to leave London off the list to stay within euroland and the eurozone.

Finally, I shall say something about London and the Olympics from the point of view of the regions. I must declare that I used to be deputy chairman of the North West Tourist Board. At the moment, we are celebrating Liverpool 2008, which is in many ways a forerunner to London 2012, and we must ensure that the regions support London. In the regions, people ask why they should support London, and I say because there is a national common purpose and also because when London gets full from time to time, we can pass those visitors who have come to London, this country’s first attraction, to see the delights in the regions. We must develop more than the usual path of Oxbridge, Stratford and Edinburgh. Why not come to Chester and north Wales, the finest part of the country?

I conclude by saying well done to the noble Baroness, Lady Gardner, for introducing this short but important debate. I hope we get a vigorous reply from the Minister. We need to take tourism seriously and there is nowhere better to begin than in London.

20:02:00

Viscount Montgomery of Alamein
My Lords, it is a pleasure to follow the noble Lord, Lord Harrison, who made some interesting remarks. The noble Baroness, Lady Gardner, has been a keen supporter of London ever since she arrived; she demonstrated her devotion once again this evening. I have to declare a past interest, which was entirely honorary, in that I was president and subsequently patron of the Restaurant Association, which is now totally integrated into the British Hospitality Association. The BHA, as it is known, is an incredibly important organisation covering hotels, catering and restaurants. Several noble Lords have mentioned the economic value of the industry, and it certainly needs better recognition. However, it seems to be getting that in one quarter because, as we speak, a large representative group from the BHA, led by its very able chief executive, Bob Cotton, is being entertained at a reception given by the Queen and the Duke of Edinburgh at Buckingham Palace.

Hospitality in its widest sense is a growth industry, but it has to a certain extent been hindered by Treasury impositions, which is not unknown. There are several of them: first, removing the hotel building allowance, which enabled hoteliers to renovate old stock; secondly, the reduction in capital allowances; and thirdly, the increase in capital gains tax, which has been especially detrimental to family-run and small businesses, which is certainly the case with restaurants.

Within the hospitality sector, the restaurant trade plays a major role. Over 100,000 people work in London restaurants alone, not to mention, as the noble Lord, Lord Harrison, did, the rest of the country. This sector will certainly suffer from food inflation; the dramatic increases in prime item prices will be a problem for it. Several noble Lords have mentioned the skill shortage. It is principally in front-of-house staff—waiters and sommeliers—and the noble Lord, Lord Harrison, mentioned a good example. To fill this gap, the Academy of Food and Wine Service has devised a programme to get unemployed people back to work and off benefits. This programme is part of the hospitality skills alliance sponsored by the BHA. Here I have to declare another past interest in that some years ago I was patron of the academy, a position now held by the noble Viscount Thurso, who used to sit in this House and is now an MP. He is much better qualified than I ever was for that role because he worked in that sector of the economy.

Finally, the Olympics were mentioned by my noble friend Lady Valentine. They will bring a vast inflow of visitors to London. In terms of hotel capacity, London is well served as it has over 130,000 rooms, which is five times greater than the number that Sydney had. However, it is essential that the reconstruction of Terminals 2 and 3 is completed, tested and working properly well before August 2012. That has not happened in other cases, and I hope the Minister can give us some assurance on that—and perhaps he can do something about the tax matters I mentioned.

20:06:00

Baroness Hooper
My Lords, I apologise for speaking in the gap. I was too late to put my name down to speak in this debate, and I thought there might not be time for me to fit in. There are two short points I wish to make, but first I thank my noble friend Lady Gardner for introducing this debate so comprehensively. My first point follows what the noble Lord, Lord Harrison, said about languages and language skills. They are important. The fact that most people speak at least a smattering of English does not make any difference. In giving a welcome to visitors, it is important that we should be able to welcome them in their own language. I was recently in China, and there is no doubt that not only will many visitors and tourists be going to China in the future, but many Chinese visitors will be coming to the United Kingdom. Where is Chinese language training taking place? It is important to get this right.

My second point is that a lot needs to be done to make central London cleaner. Around Parliament Square, there are no litter bins for security reasons. Something must be done to cope with the litter. It may be that people who do not walk much do not notice, but the remains of meals and half-drunk cartons of drinks are quite revolting. If we want to welcome visitors, it is important at least to show a clean city so that when they come here and enjoy the experience, they will come back again. It is not only the litter problem that has to be dealt with, it is also the cleanliness of the pavements. It is horrible that people seem to spill food and other things all over the place and nothing seems to be done. There seems to be no system for cleaning up that sort of mess. Many people berate our French friends across the Channel, but in France they have a system of washing down the pavements. Every shop holder washes the pavement outside his or her shop. Is there not something that can be done here? With the new mayor of London, the time is ripe. Let us hope that we can get the message across.

20:09:00

Lord Lee of Trafford
My Lords, I congratulate the noble Baroness, Lady Gardner, on securing this debate on tourism. In this House, tourism has a very small number of champions, but a number of us are here this evening to support her. I am delighted to participate in this debate and declare an interest as a former tourism Minister in the late 1980s. In addition, since its foundation I have been chairman of the Association of Leading Visitor Attractions, the 42 members of which each have to receive more than 1 million visitors a year. I am glad to say that the Palace of Westminster is a fairly recent addition to our membership.

As has been said, London is the number one city destination for international travel. No other city in the world has such a rich tapestry of tourism opportunities: history and heritage through museums and galleries; theatres and restaurants, as the noble Viscount mentioned; historical palaces; and more modern attractions such as the London Eye. The statistics were mentioned a little earlier. The visitor economy is worth £15 billion to London. It provides 280,000 full-time jobs—heaven knows where those jobs would be filled from if we did not have all those who come from eastern Europe to work in our hotels and restaurants—and provides 10 per cent of London’s GDP.

At a time when the financial services industry, which is so important to us, is suffering a decline, thankfully we have tourism to sustain London’s economy. Last year, 16 million overseas visitors came to London, nearly double the number that visited New York and, of course, London is the national gateway to the United Kingdom. Some 50 per cent of overseas visitors come to London and 75 per cent come through London airports.

However, the current trends are not over-encouraging—2008 will be a tougher year, not least because of the situation of the world economy. As far as London is concerned, we saw strong growth in 2006 when the numbers were up by 12 per cent, and in 2007 when they were up by 3 per cent, but this year looks like more of a standstill. The broad trend is that we have an increasing number of day trips to the capital, particularly domestic ones, but a declining number of overnight visitors.

We are seeing a gradual decline in London’s percentage of global tourism. London is not sharing proportionally in its growth. There are some considerable opportunities. The Olympics have been mentioned. It is a great tragedy and a lost opportunity that the Government have so far—I repeat, so far—not allocated any hypothecated money to promote the Olympics. We are spending billions in capital terms—surely we should be spending some in income terms as well.

Without wishing to be too political tonight, I have to say that this Government have taken very little interest in the tourism industry. Reduced funding for VisitBritain has been the message. The terms of office for its chairman require him to do just six days per month, which frankly is an insult to the industry. I know that he does more, but we should have a full-time chairman.

Major challenges have been referred to. It is crazy that London has no major conference or convention centre. We have lost a huge amount of business, as has been referred to by the noble Baroness, Lady Valentine. On hotel accommodation, we may have a substantial number of beds in total, but we certainly do not have enough budget accommodation in London. The Government were not very clever when they abolished the 4 per cent hotel building allowance, as has been referred to earlier. That was bad news.

In terms of minor improvements that would make a difference, I would like to see the pedestrianisation of Parliament Square and an improvement in the Exhibition Road tunnel leading to our major museums—it is tired and unimpressive. We could also smarten up a number of this country’s entry points.

The previous Mayor, Ken Livingstone, substantially supported the London Development Agency and I hope that Boris Johnson, our new Mayor, recognises the importance of the tourism industry to London and becomes its champion.

20:13:00

Lord Howard of Rising
My Lords, it has been most instructive to hear what noble Lords have had to say in this interesting debate, introduced by my noble friend Lady Gardner of Parkes; I congratulate her on doing so. I have a tourist attraction—it is not in London but, just in case, I declare my interest.

Whatever view is taken on the right level of support for the tourism industry, one or two facts stand out. The tourism deficit stands at £19 billion, compared with £4.7 billion in 1997 when this Government were first elected. The noble Lord, Lord Lee, has commented on this. I do not think that all of that deficit can be attributed to government incompetence. For example, the massive reductions in the cost of air travel—reductions available entirely through action by the private sector—have meant that more Britons are able to go abroad for their holiday although it is also cheaper for tourists to visit Britain.

However, at a time when new tourist destinations are opening up all over the world, the Government have introduced a number of measures which, if not specifically designed to keep visitors away from this country, have certainly had a negative effect. Indirect taxes aimed at tourists increase the cost of visiting the country. If costs are increased, Britain becomes a less attractive destination. For example, the cost of a student visa has increased 130 per cent and now costs £60, whereas a visa to visit the 15 Schengen countries costs €60. It was very nice to hear the noble Lord, Lord Harrison, showing the same enthusiasm for London as he shows for Liverpool, although I cannot share his enthusiasm for the euro. The fact is that €60 is considerably cheaper than £60 and for his or her money the student gets 15 countries to visit rather than one. The air passenger tax has doubled. The Licensing Act 2003 has meant that the cost of a licence for a bed-and-breakfast establishment to sell alcohol has risen from £30 to £300—and so on and so forth.

Her Majesty’s Government think that if you increase the cost of goods and services there will be no impact and life will continue as before, but there will be an impact. If the Government are in doubt about this simple principle, they have only to look at the current exodus from this country of a number of international corporations, unwilling to pay Britain’s higher corporation taxes. However much the Minister may disagree, let us hope that the business tourist does not also disappear.

A number of steps need to be taken to improve tourism. My noble friends Lady Gardner of Parkes and Lady Hooper have alluded to some of these. Of course, the first and most important step was to get rid of Ken Livingstone, so the capital can be run properly. Now that has happened, it is hoped that Her Majesty’s Government can try and remove some of the other impediments to visitors considering visiting London.

20:17:00

Lord Davies of Oldham
My Lords, I, like all noble Lords who have spoken in this debate, am grateful to the noble Baroness, Lady Gardner of Parkes, for introducing this important topic. The Government welcome the opportunity to discuss tourism on all occasions. The short answer to the noble Baroness’s Question is that the Government regard the tourism and hospitality industries as vital not only to the capital but to the wider economy of the whole country. As such, the Government are working hard with their partners in the public and private sectors to support the London tourist industry and to improve further their contribution to tourism across the UK, particularly as the 2012 Olympic Games and Paralympic Games come ever nearer.

The scale of London’s visitor economy is vast, as noble Lords have attested this evening. Visit London, the former London Tourist Board, estimates that the capital’s tourism and hospitality industries are worth £15 billion a year, which is 17 per cent of the total £85.6 billion turnover of these industries across the UK. That shows how significant London is in this respect. The noble Baroness, Lady Valentine, rightly identified it as the crucial gateway. There were 26.2 million overnight visits to the capital in 2007 and an estimated 150 million tourism day trips, including 52 million people visiting London’s free and paying attractions.

I emphasise the point made by the noble Lord, Lord Lee, that we look not only at overseas visitors when we consider London’s tourism role but at UK citizens, who visit London in very large numbers and need to be catered for adequately. These are big numbers, but as noble Lords have identified in this debate, London faces big challenges in an increasingly competitive world tourism market. We know how sharp the challenges are because our own people travel abroad more readily, as indicated by the noble Baroness, Lady Hooper, and the noble Lord, Lord Howard. London needs to compete with the opportunities that British citizens take up elsewhere in the world.

Overseas visitor numbers increased by 3 per cent in 2007. We have to compare that with the 12 per cent rise in 2006, so there is no cause for complacency. The trend is for the numbers of domestic visitors staying overnight in the capital to fall, as they did by 7.5 per cent in 2007. Visit London has forecast a fall of 1 per cent in visitor numbers over 2008—a point made by the noble Lord, Lord Lee—but we hope and indeed plan for the fact that the capital’s performance can buck that trend over the past year or so. The latest available figures show that the numbers of people visiting London’s tourist information centres increased by 12 per cent in February. That is a very positive sign, and indicates to the Government that there is no reason for gloom in the London industry. We do, however, need to look at the things that we can improve so that it can increase its advantages. Its advantages over its competitors in Europe and beyond have not gone away, and show no signs of doing so. The four world heritage sites—Greenwich, Kew Gardens, the Tower of London and the Palace of Westminster—have been here for a considerable time and show every evidence of being a feature of the London tourist landscape for the foreseeable future. The retail sector in London generated sales of £4.4 billion last year—a significant number. The noble Baroness, Lady Valentine, emphasised London’s 26 Michelin-starred restaurants and nine major concert halls, and the noble Baroness, Lady Gardner, referred to our national museums and galleries, which are a major attraction for tourists to this country.

Several noble Lords, particularly the noble Baroness, Lady Valentine, emphasised the concern about business visitors. A London convention centre would certainly be an additional feature but is a matter for the mayor in the first instance. We as a Government have signalled our general support for the proposal in the department’s tourism strategy for 2012, which we published last September. It is now for others to do substantial work in these terms, which is an obligation for the new mayor. I note that the noble Lord, Lord Howard, castigated the previous mayor and, I guess, expects the Government to co-operate with the new mayor. Let us assure him that there will be the fullest co-operation in working with the new Mayor of London on the manifold challenges that he faces, but let us not forget the achievements of the outgoing mayor. The Olympic Games were achieved for London, and Ken Livingstone played a significant part in that. There is no doubt that when we look back over this period in four to five years, the Olympic Games will feature in every tourism debate, very much to the advantage of the capital.

Let me say to wider parts of the United Kingdom, for I was glad that my noble friend Lord Harrison broadened the debate to stretch beyond London, that 2012 has to be not just about London but about spreading the benefits wider in the country. We expect that tourism businesses outside the capital will start to benefit from the increased interest in the Olympic Games.

I was chided in the debate for the limited progress, thus far, in selling the Games, but it is a little early given that we still have to complete the Beijing Olympics. We have not formally had the torch handed to London; that will happen with the emblem of the Olympics at the end of those Games. It is Beijing’s Olympics at present, but it will soon be London’s—and as soon as the banner is taken up then London will be required to begin to sell the Games, within the preparations of the next four years. I have not the slightest doubt that there will be co-operation between the Government, the mayor and, indeed, all other interested contributing parties—including industry and, particularly, the tourist industry in London—which are eager to play their parts in reaping the rewards from that quite unique opportunity.

Some of your Lordships suggested that we were not preparing the ground sufficiently well at present; the noble Viscount, Lord Montgomery, was concerned at the withdrawal of the hotel buildings allowances as part of the last Budget. That was part of a wider group of measures in that Budget designed to benefit small businesses, including hotels and restaurants. The new annual investment allowance will allow all businesses to claim full tax relief on capital investments of up to £50,000 a year, so I assure him that we have the interests of small businesses at heart. Those interests were part of the business considerations during the Budget, within which the hotel and restaurant industries are important.

I was delighted that we then came on to the question of skills. The noble Baroness, Lady Hooper, mentioned language skills; I think that other noble Lords did so too. It is not just language skills but that whole range of hospitality skills in which we would be perhaps prone to indicate that our skill levels, on many sides, compare poorly at times with other major centres. To take the most obvious aspect, the standard of waiting in the average restaurant in the United States usually compares rather well with London’s, let alone at higher skill levels such as the organisation of business—although London delights, as does the UK, in the extent to which high levels of skills are being shown among chefs and at the improvements with food in this country.

We need to raise skill levels, which is exactly why the Government have invested so significantly in skills. In 2006, the public sector spent about £500 million on skills, including regional development agency and Learning and Skills Council funding, compared to £144 million invested by employers. I bring the attention of the House to the Government’s determination—it is scarcely directly relevant to this debate, but related to the skills agenda—to improve vocational opportunities at secondary level in our schools and colleges. That is absolutely crucial to enhancing skill levels in this country. Undoubtedly, we will only make sufficient progress when we have raised those levels and are able to give the welcome that we should to visitors; noble Lords on all sides referred to that.

That welcome depends on the point of arrival, too, and there is no doubt either that Heathrow has to improve its performance, or that the fifth-terminal mishap was a limited one from which the airport will recover. It was costly, no question, and the noble Baroness, Lady Gardner, indicated that the world was well aware of failures in that respect; however, the fifth terminal is an important and welcome addition to the airport. As a Government, we are clear that the third runway is important, too, for tourist development; the noble Lord leading for the Opposition this evening did not, I think, mention that position, but the third runway is important in access to this country. I was pleased that several noble Lords also emphasised the importance of rail links, with the development of St Pancras and the link with Europe it represents. That not only improves opportunities for people from Europe to come to the United Kingdom, but has brought benign effects on the carbon imprint.

We have not the slightest doubt that, to make a success of the tourist industry, we need to improve our transport infrastructure; yet, on all sides, we can see our railways improving apace with modernisation and the track improvements that guarantee faster rail travel in the UK. That, with the European Channel link, is an important dimension, but it does not alter the fact that we need to pay attention to our airports. For the foreseeable future, a large number of our tourists will come in by air.

This has been a most interesting and challenging debate. None of us underestimates the challenges facing the tourist industry. The Government are providing their support for an industry which is so important to the economy. Great opportunities beckon, not only in the obvious fact that London maintains its position as second only to New York in terms of a city to be visited. We all know that its range of attractions needs to be improved.

The noble Baroness, Lady Hooper, is right about litter. Standards of cleanliness speak well of a city, but London’s are not high enough. There is a real problem about providing litter bins in these days of guaranteeing security. Again, as the noble Baroness, Lady Gardner, said, without security the capital cannot expect to attract visitors. One of the great achievements of London in its response to the terrorist outrage a few years ago was the rapidity with which Londoners made sure that the capital returned to normal and remained the same welcoming place for visitors that it had always been.

There are real challenges and the greatest of opportunities. The Olympic Games puts London on the map. I do not think that the country has realised yet what a prize we have secured. I understand those who have a limited interest in sport and those who think that the Olympics can be oversold—but not in terms of worldwide perception, they cannot. Once the Beijing Olympics are over, the focal point of the Olympic Games will be London. It gives us an enormous opportunity to advance tourism. I have not the slightest doubt that the Government will continue to play their full part with their partners to ensure that that opportunity is grasped.

Viscount Montgomery of Alamein
My Lords, will the Minister give me some assurance on the completion of the merger of Terminals 2 and 3? If that is not completed on time, there will be a great deal of problems for the Olympics.

Lord Davies of Oldham
My Lords, that is a matter for the airports authority. But I assure the noble Viscount that we expect improvements at Heathrow to be achieved within the timescale necessary. Everyone knows that timescale; namely, it has to be ready for 2012.

Lord Bassam of Brighton
My Lords, I beg to move that the House do adjourn until 8.35 pm.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.33 to 8.35 pm.]