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Speech to The British Institute of Innkeeping
8 June 2006

LICENSING ACT

The recent licensing changes are an example of a good idea, badly undermined by the Government’s botched implementation. We agreed that there was a need for reform of Britain’s licensing laws – they had remained largely unchanged since the First World War and it so it was right to reform them.

However, the Government has placed new, costly burdens on village halls, sports clubs and voluntary groups. For instance, a maximum of 12 Temporary Event Notices can be granted for any premises per year, even if just for cheese and wine parties. As a result, community facilities are being forced to apply for the same expensive and complex licences as pubs and nightclubs.

The Government’s implementation of the Act has been roundly criticised – for example by the Select Committee on what was the Office of the Deputy Prime Minister and the Better Regulation Commission.

We believe that decisions about licensing are best made locally because longer opening hours will be appropriate in some places more than others.

Conservatives are all in favour of people having a good night out. But the right to have a drink brings with it a responsibility - a responsibility not to disturb local residents in the early hours, and a responsibility to act in accordance with the law.

Landlords also have a responsibility not to encourage excessive drinking through irresponsible drinks promotions or serving people who are clearly inebriated. I therefore applaud the strong stance taken by BII on social responsibility issues. As John McNamara (BII chief executive) has said,Irresponsible drink promotions fuel binge drinking, which has been identified as a problem in many of our city centres’ (BII press release, 23 May 2005).

It was worrying to discover last week that Britain is third in the European ‘league table’ of binge drinking. The report from the Institute of Alcohol Studies also revealed that more than a quarter of 15 and 16 year olds binge drinking at least three times a month. We are still some way off from the much-vaunted ‘café culture’ in the way we drink; in many places there is a still a culture which says you haven’t had a good night out unless you can’t remember it the next day.

It is too early to make a conclusive assessment of the success of the new licensing arrangements. We believe that the combination of summer evenings and the World Cup will be the first major test of the Act and will watch closely to judge how local communities and public services are affected.

The Government released figures in February showing a fall in violent crime during a six week campaign to reduce alcohol related disorder, which they claimed justified their 24 hour licensing reforms. However, the campaign had received £2.5 million of extra money for policing, showing that as Conservatives have always said, putting more police on the street cuts crime. It will be appropriate to judge the licensing arrangements over a 12 month, not six week, period.

TOURISM

We are in no doubt that the tourist industry is absolutely vital to the British economy as a whole:

  • There were a record 30 million visitors to the UK in 2005.
  • With a total value £74bn per annum (£13bn in inbound visitor receipts) the industry as a whole accounts for 4.5% of GDP (3.4% of Gross Value Added).
  • According to the Tourism Alliance, the £13bn per annum received from inbound visitors also makes the industry one of Britain’s largest export earners above crude oil (£9.3bn), food, beverages and tobacco (£10.5bn) and vehicles (£12.1bn).

CURRENT CHALLENGES

  • The World Trade Organisation estimates that, by 2020, Europe’s share of the global market will have decreased from 58% to 46%.
  • Britain has already slipped from 5th to 6th position in terms of revenue generated by inbound visitors and is likely to be overtaken by China this year.
  • Global challenges such as terrorism remain with us, and we can still see the effects of foot and mouth and the global economic downturn. They underline the importance of a concerted marketing campaign abroad.
  • We are concerned about the Government’s lack of commitment to tourism. VisitBritain, the organisation that markets Britain abroad, has been labouring under a standstill budget under this Government. And in a recent letter to Tessa Jowell outlining the priorities of her department, the Prime Minister barely mentions tourism.

CONSERVATIVE APPROACH

Opposition to the bed tax. We believe that the possibility of a ‘bed tax’, a local levy on hotel accommodation under consideration by the Lyons Review, would be seriously detrimental to the tourist industry.

  • It would deter inbound tourism and put jobs at risk. Hotels already pay business rates and contribute to local services, and VAT is levied on hotel prices. Tourists also contribute to the wider local economy and tax base via their spending.
  • Britain’s tourist deficit was £17 billion in 2003, and a tax of this kind would only make matters worse.
  • According to the Tourism Alliance a 10% bed tax could cut revenues for hotels, B&Bs and caravan parks by £1.3bn, threatening 32,000 jobs (The Guardian, 5 June 2006).
  • The Family Holiday Association, which works to enable lower income families to take holidays, has said that a bed tax would increase the number of families unable to afford a holiday in the UK. Currently one in three families cannot afford a one week break away from home (FHA Press Release, 2 June 2006).

Reform to marketing structure. There to needs to be a much better degree of cohesion between the various bodies responsible for the tourism industry and clarity over who does what.

To ensure that there is a national tourism strategy for England we have argued that there needs to be a re-vamped England Marketing Advisory Board. This would have new executive powers for delivering a national tourism policy and distributing funding for promoting tourism from a central pot to strengthened Regional Tourist Boards so that local strategies are harnessed as part of a coordinated and cohesive tourism policy.

Support for skills training. High quality training for people in the tourist industry is absolutely vital in ensuring Britain is at the forefront of the international tourist market. We are supportive of the People1st scheme, which has been a welcome innovation but we remain concerned about the Government’s record on skills.

According to the OECD Britain ranks 17th out of the 30 OECD countries in terms of the percentage of adults with better than low skills and 5th out of the G7 countries.

The importance of foreign language skills is clearly vital to an industry that deals with incoming visitors, and yet the worrying trend is that we are producing too few pupils and students with these skills, partly due to the Government’s ill-considered removal of languages as a compulsory part of the curriculum.

We need to look at boosting the practical elements of apprenticeships and vocational training so that elements like language work, IT skills and financial management are at the heart of training.

Making the most of 2012. London 2012 provides a tremendous opportunity for the tourist industry. We need to ensure that there is a coordinated national strategy to ensure the whole of Britain is on display, not just London. We have suggested a concerted marketing strategy to encouraging foreign media/journalists to travel throughout the country, before and during the Games, as much as possible.

SMOKING BAN

The complete ban on smoking in all enclosed public spaces will come into effect next year. The BII argued against a total ban and that ‘…the choice of banning smoking in pubs and bars should be at the discretion of the licensee. Where possible there should be the opportunity within the legislation to provide a separate room with good ventilation for smokers’ (BII press release, 10 October 2005).

The House of Lords Economic Affairs Committee this week published a report on Government policy on the management of risk. The report says that greater attention should have been given to scientific evidence, which it says suggests that passive smoking in public places is a relatively minor problem compared with passive smoking in the home. The committee concludes that: ‘Failure to consider these matters properly has resulted in the introduction of a policy that appears to demonstrate a disproportionate response to the problem’.

As you know there was a free vote in the House of Commons on this issue. We did believe that restrictions on smoking in enclosed public places were necessary but there was a variety of opinion about the merits of a complete ban, an exemption for private members’ clubs and the possibility of a voluntary system. However, the view of Parliament was clear and at least a blanket ban puts the whole licensed trade on an equal footing.

I know that the BII expressed strong opposition to the ban, citing the impact it could have on jobs and businesses.

However, now that we know that a full ban is coming into effect the challenge is clearly there to ensure the ban is implemented in a way that minimises any long term damage to the licensed trade and looks to boost demand from people for whom the prospect of a smoke-free pub is attractive.

There are mixed opinions about the effects of the smoking ban in Ireland on the pub trade; in many ways the jury is still out.

The Government has said that ‘Irish retail sales data from the Central Statistics Office shows bar sales falls after the ban in line with year on year falls since 2000. In general, there is a lack of international evidence to support a prediction of a significant drop in sales in the hospitality industry’ (Partial Regulatory Impact Assessment – Smokefree Aspects of the Health Bill, 2005).

However, I know that the BII argue that ‘the pub ownership model here is very different to the one in Eire. The majority of our pubs are operated by individual tenant and lessees operating on far tighter margins than Irish pubs’ (BII press release, 10 October 2005).

So it will take some time to assess the impact of the ban on the pub trade, although so far we have seen successes in terms of enforcement and the impact on health.