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6.31 pm

Mr. Ronnie Fearn (Southport): Never before has the importance of tourism to the rural economy of the United Kingdom been more apparent; never before has the industry been so much in the forefront of the news; and never before has the future, the core and the infrastructure of tourism been so thoroughly under threat.

Britain's tourism industry, as we have heard, is the fifth biggest industry and comprises 120,000 businesses, more than 80 per cent. of which employ fewer than 10 people. The tourism industry makes £64 billion a year, of which rural tourism provides £12 billion. In rural England, tourism supports 380,000 jobs. A quarter of all holidays taken by British people in England alone are in the countryside, and those rural areas contain 39 per cent. of the known accommodation capacity in England, provided by 25,000 establishments.

Because of the crisis, British tourists have withdrawn into their own home territory, or they are booking holidays abroad, encouraged by other European countries, which have ploughed into our markets, advertising walking and rambling holidays. There is no need to withdraw from our own holiday pattern--beaches, rural areas, country bordering rural areas and, indeed, most holiday spots inland are accessible.

Much in evidence have been scenes in newspapers and on TV, both here and abroad, showing Britain on fire and the Army moving in, none of which has helped to stem any fears that tourists might have. In the USA, "Come to Britain" holidays have taken a nose dive. A wrong strategy was taken by the Government, who simply failed to realise that tourism would be hit far more than farming in the long term.

The lack of information supplied to tourism businesses in the first weeks of the crisis was absolutely appalling. The information is still inadequate and red tape surrounds many aspects of business. Why not ease the pressure by requesting the regulatory impact unit to carry out a snapshot study, with the Government acting quickly on the findings?

The British Tourist Authority now estimates that, in 2001, inbound tourism will be between 10 to 20 per cent. short of its original forecast. That will involve a likely drop in revenue of between £1.5 billion and £2.5 billion. In Cumbria, the trade is facing 350 redundancies, with many more in the pipeline, and 193 tourism businesses and attractions have reported losses to the Cumbria tourist board. Not only hotels and shops, but food suppliers, petrol stations and restaurants are beginning to see no light at the end of the tunnel.

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The Youth Hostels Association, with which I am closely associated, faces losses of almost £6 million after being forced to close almost half its hostels. In Cumbria, 17 out of 24 youth hostels have shut down, yet I visited the area just after Easter and found the lakes and many countryside beauty spots thronging with visitors, acting very responsibly and enjoying themselves, too. I met hoteliers to discuss the future of tourism. They, and those in other businesses throughout Britain, have suffered a collapse in bookings and a drastic drop in cash income. That is exemplified by statistics that show that the inquiry rate from 19 February to date is about a third of that in the same period last year.

The statistics certainly show a drastic drop in bookings for September, October and into early next year. That was also highlighted on my visits to Torbay, Bath, Welshpool, Eastbourne, Weston-super-Mare and my own constituency--Southport. Tourist boards in all those areas are fighting back with positive moves, but they need more Government help. In Devon, the county council estimated that 1,200 jobs would be lost in agriculture and ancillary rural industries, while 8,700 jobs could be lost from its tourism sector and allied businesses. The reduction in income in the tourism sector was estimated at £196 million.

Nationally, the Liberal Democrats called immediately for a grip to be taken when we saw how easily businesses could head towards bankruptcy. We asked for a moratorium on VAT, or for it to be reduced, which would not only help the tourism industry, but bring us more in line with other European countries, especially Ireland, where an immediate upsurge in tourism occurred when VAT was lowered. We asked for a moratorium on business rates and suggested that repayment of arrears could take place over a long period.

We contacted the banks and an immediate response came, stating that full consideration would be given to those whose cashflow was in difficulty. The possibility of help with the payments for specific essential services, such as gas, water and electricity, was taken up and an agreement was sought for the banks to provide loans or grants, with lower interest rates than the Government's loan guarantee scheme.

Liberal Democrats have also urged that the recently published Rating (Former Agricultural Premises and Rural Shops) Bill should be implemented soon, instead of waiting until April 2002. An alarming aspect of the 50 per cent. mandatory relief is that it will not initially apply to pubs and garages. That needs to be amended urgently to protect those in rural areas who could go out of business very soon.

The British Tourist Authority has put a lot on its website, detailing a visitors' charter on which 1,100 attractions have already been entered. The BTA targets overseas visitors coming to the United Kingdom and has received a commitment from the Government for £2.2 million in additional funding towards its planned recovery activity. However, the BTA has made it clear to the Government that that is only the first part of further substantial investment. The second instalment of money, totalling £8 million, is already required to undertake tactical advertising and further PR activity. That £8 million is needed now, so why do the Government not release it?

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The English Tourism Council has also prepared a recovery plan for tourism in the United Kingdom. It has been submitted to the Government in support of a bid for £35.5 million--the sum estimated to be needed to carry out the recommendations contained in the plan. Delivery will take place nationally and regionally. Together with the regional tourist boards, the ETC has received £3.8 million to implement the short-term measures identified in the plan, of which it has passed on £1.4 million to regional tourist boards--but where is the Government's total commitment to the sum of £35.5 million?

In Devon, the county council has sought to compensate for the loss of visitors from within the United Kingdom by diversifying into the overseas visitors markets, the objective of which is to increase the number of visitors, and visitor spends, from the overseas markets to the rural sub-region. That will sustain employment opportunities and raise the quality of Devon and Cornwall's tourism sector. We applaud that, but much more needs to be done. Better communication is needed between the Government and the regional tourist boards so that contact is easily maintained and the situation is monitored directly. An additional bank holiday would assist small businesses to recuperate some of their financial losses, and that would be best timed in the autumn towards the end of September.

The impact of foot and mouth on rural tourism businesses, as defined by the North West tourist board, will affect the ability of regional boards to raise money for marketing this year. The industry will not have the funds to partake in marketing activities. Attractions also will not have the resources to take part in the national quality assessment scheme and accommodation will withdraw from the accommodation inspection scheme. The long-term effects of that will be a reduction in the quality offered and a downward spiral in our competitiveness. Subsidies already announced must extend throughout all those sectors. Tourist boards need to develop the case for compensation for tourism businesses, highlighting the scale and extent of foot and mouth's disastrous impact on visitor expenditure, local economies and special circumstances.

I particularly take on board the suggestions made by the Cumbrian representative, the hon. Member for Workington (Mr. Campbell-Savours). All such remedies will help rural tourism, which must and will survive.

6.41 pm

Mr. Matthew Taylor (Truro and St. Austell): This has been an important debate. It has given the House a chance, after the Easter break, to discuss the biggest issue to have hit the countryside in possibly a generation. It has highlighted the real crisis in the countryside and Members--such as the hon. Members for Exeter (Mr. Bradshaw) and for Workington (Mr. Campbell-Savours) and my hon. Friend the Member for Southport (Mr. Fearn), as well as the Minister of State, the Ministry of Agriculture, Fisheries and Food and the Opposition spokesman, the hon. Member for South Suffolk (Mr. Yeo)--have understandably focused on that. I suspect that it will be my hon. Friend's last speech in the House as he is retiring when the election is called. As ever, he fought hard for the tourism industry.

It is not simply foot and mouth that is at the heart of the economic problems facing the countryside. The problems have been built on top of a crisis that is of longer making.

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Between autumn 1996 and autumn 2000, agricultural employment fell by 85,000. It fell by almost 20 per cent. even before foot and mouth hit home. In 2000, farm incomes fell to as low as £7,800 per capita--the lowest figure for 25 years, as the Chairman of the Select Committee on Agriculture rightly pointed out.

The crisis is not merely confined to farming. As my hon. Friend the Member for Southport pointed out, it has hit hard at tourism. The whole rural economy has been affected, as I and all hon. Members, whatever their party, will know from their constituents who face serious difficulties as a result of the impact of the disease. For example, there has been a huge impact on the St. Austell brewery because of the loss of trade in its pubs in Devon. Teagles, the agricultural machinery manufacturers, has had to lay off workers near Blackwater in my constituency. The problems have spread throughout the rural economy, so I cannot agree with the hon. Member for Exeter who said that, without foot and mouth, the debate would have been about how well the rural economy is doing. People in rural areas would not recognise that picture.

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