Oral answer (Lords) on Wuhan Coronavirus: Tourism - Feb 26

Asked by

Lord Lee of Trafford

To ask Her Majesty’s Government what assessment they have made of the impact Wuhan coronavirus is having on United Kingdom tourism.

Lord Lee of Trafford (LD)

I beg leave to ask the Question in my name on the Order Paper and declare an interest as chairman of the Association of Leading Visitor Attractions.

The Parliamentary Under-Secretary of State, Department for Digital, Culture, Media and Sport (Baroness Barran) (Con)

My Lords, the Government are working very closely with the tourism industry to monitor the impact of Covid-19 on the sector. VisitBritain has chaired two meetings of the Tourism Industry Emergency Response Group and has been providing daily updates to industry members since 27 January. The Minister for Tourism chaired the industry council just this Monday, where the Deputy Chief Medical Officer was present to discuss these issues with the industry, and the Government continue to monitor the situation closely.

Lord Lee of Trafford

My Lords, while the health issues are obviously paramount, global travel is increasingly being disrupted and restricted. UK tourism is already being seriously affected. Flights between China and Europe are down 37%. The chief executive of Walpole, the luxury trade body, believes that there has been a 70% downturn in Chinese visitor spend and many visitor attractions, hotels and restaurants are being hit. Particularly badly hit are the 20-plus members of UKinbound, whose businesses are totally dependent on the Chinese market. I urge the Government to encourage banks to be lenient and understanding with affected businesses and, more importantly, to consider deferring VAT payments to ease liquidity pressures on companies, particularly if the various problems persist for any length of time.

Baroness Barran

The noble Lord is right to point out the challenges to certain sectors of the tourism industry. As for working more closely with the banks on the impact of Covid-19, the virus is obviously impacting businesses across many industries, of which tourism is an important one, and the Government are working very closely with the financial services sector to ensure that the economy can negotiate this period. The Government do not have any plans to introduce a blanket deferral of VAT payments as a result of Covid-19 but, if our businesses are struggling as a result of the virus, HMRC’s “time to pay” arrangements allow customers with viable businesses more flexibility over their payment periods.

Lord Hayward (Con)

My Lords, one key aspect of tourism is international sports tournaments—the Six Nations, European football tournaments and the like. Are the Government giving any guidance on the handling of sports events, where of course large numbers of people will be congregating, many of whom will naturally and inevitably be coming from abroad to watch the matches?

Baroness Barran

I thank my noble friend for his question. In everything that we are doing, we are being guided by the Chief Medical Officer in trying to strike a balance between the safety of the public, which is obviously our pre-eminent goal, and making sure that events can take place. There are no rugby events, I understand, scheduled for this weekend. Future scheduling will be based on the best advice at the time. This is a rapidly evolving situation and work is being done on guidance in relation to mass gatherings.

Lord Clark of Windermere (Lab)

My Lords, does the Minister realise that the cessation of Chinese tourists coming to the Lake District is having a massive effect? But, bearing in mind that there are 19 million visitors to the Lake District and a local population of 40,000, should not the Government be thinking that there will be other dangers like this to the tourist industry that happen overseas? The industry itself should be working with government to think how it can be long-term viable.

Baroness Barran

As I tried to explain in answer to the noble Lord, Lord Lee, the Minister for Tourism is working closely with the industry and the Government. As the noble Lord, Lord Clark, will be aware, we recently announced a tourism deal to meet a number of the issues that he rightly raised.

Lord Stevenson of Balmacara (Lab)

My Lords, the noble Baroness mentioned the work that VisitBritain is doing to try to understand better what the impact will be of this awful situation. I looked at its website this morning and noticed that it was still suggesting that there will be an increase in overseas visitors this year of some 2.9% and a growth in income from £25 billion to £26.6 billion. Does she have current figures to share with the House? Are there any plans that are not just reliant on hope, such as suggesting staycations and other ways in which we might increase the volume of traffic to those who have to suffer disbenefit, from internal resources?

Baroness Barran

Obviously, VisitBritain is responsible for the data on its website. I asked the same questions of officials that the noble Lord put to me. Rightly, the view is that there are many moving parts to this and that trying to come up with a number is probably not helpful. What is helpful is to be in constant communication with the sector, listening and engaging with it, and working across government, which is what we are doing.

Lord Foster of Bath (LD)

My Lords, we have heard of the difficulties faced by the tourism industry being made worse by coronavirus. Does the noble Baroness accept that we could help the industry by doing as other European countries have done and reducing VAT on accommodation and attractions, thereby giving some £5 billion over 10 years to the Treasury, increasing our trade balance by £23 billion and creating 120,000 jobs? Does she agree with those figures and what has her department done to try to persuade the Treasury of the merit of the case, so that we can help our tourism industry?

Baroness Barran

I am sorry to disappoint the noble Lord, but I am not aware of any plans to review VAT on tourism at the moment.