Month: February 2022
Updates and new items
1. Online Sales Tax. “The UK government has today (25 February 2022) published an early-stage consultation, exploring the arguments for and against an Online Sales Tax (OST)”. The consultation which closes 20 May is potentially the first step towards an online sales tax, equally it could kick the issue off into the long grass or kill the idea off in its entirety. The announcement makes it clear that the rational is to “address tax imbalance reported in the retail sector”. In the consultation itself there are references that suggests that such a tax charged at 1 or 2%, as previewed in last Autumns spending review, could raise sufficient funding to reduce business rates on bricks and mortar based retail, not eliminate them, which is critical to understanding the direction of both the thought process and of potential travel. The consultation has been added to the consultation page of Britishdestiantions.net: https://britishdestinations.net/consultation-responses/open-consultations/uk-government-to-assess-whether-online-sales-tax-could-address-tax-imbalance-reported-by-retail-sector-closes-20-may-22/
2. Covid-19 non-damage denial of access insurance cover. Last week Axa lost a potentially landmark case in the High Court against the hospitality group Corbin and King. The case follows on from the 2020 finds by the City Regulator in large part in favour of the Financial Conduct Authority’s arguments made on behalf of policy holders, originally denied full non-damage denial of access insurance cover payments. The 2020 findings left considerable doubt over many cases, including that of Corbin in King.
In essence Axa, argued that their liability was limited to a single claim £250k over the period of the Covid-19 pandemic and only one claim of up to that value for the groups rather than up to £250k for each of their 9 London-based premises. Axa are “carefully considering” the finding. A specific settlement for Corbin and King will follow from the Courts. However, depending on the wording of policies and the interpretation previously placed on these, the finding may (will) have significant implications for other insurers and for other groups denied sequential and/or multiple claims across their operation. It isn’t going to help single businesses but it may have implications for micro and SME with more than one outlet (?) and presumably on a number of national groups and chains, some sadly no longer operating. It will also doubtless be reflected in future business insurance costs, potentially regardless of the cover previously held or the nature of that being sought in future See more on this from FT at:
3. ClearSights on recovery. The February issue of the BVA-BRDC ClearSights on Covid-19 & recovery has now been published and is available to members via the Britishdestinaton.net, C19 research page. This edition paints a more optimistic picture than we have seen for some time: https://britishdestinations.net/c19-research/ .
4. VAT infographic. The Tourism Alliance of which we are members and a number of the major industry sector trade bodies have produced a one-page infographic setting out the key arguments for retaining VAT on tourism services at 12.5%. I have added the infographic to the research page containing the summary and full-page links which were circulated earlier in February.
Although there are still no direct indictors to suggest that the argument may be accepted before the VAT level returns to 20% at the end of March and a good few indirect, indicator that it is very unlikely, it may well still be useful to circulate the infographic to partners businesses and others (MPs etc.?) with or without the expectation management caveat that campaign’s aim is to: either retain the 12.5% VAT level, or failing that, to regain it at the earliest opportunity. Links to the two reports and infographic can be found at: https://britishdestinations.net/research-and-statistics/
Meanwhile here what it has to say:
Westminster Parliamentary Reception and next Officers’ meeting date.
The Tourism Alliance has kindly extended the invitation to attend their forthcoming Parliamentary Reception on the afternoon of 24th March to members of British Destinations (see below). In order to make the most of the day, we in turn have arrange to hold our next officers’ meeting from 12.00 to 2:00pm at the Visit Britain Offices, 3 Grosvenor Gardens, SW1W 0BD. You should aim to allow at least 20 minutes to gain entry for both.
To ensure I keep track of who is attending what, I would ask that you to let me know if you wish to attend one or both events and I will RSVP to the Tourism Alliance on your behalf.
For those unable to attend the officers’ meeting in person, I will be sending a Teams link in due course. Agenda to follow, key items remain a mix of immediate recovery issues, future funding arrangements and critical strategic direction, including rail, road, energy and environment policies.
The Board of the Tourism Alliance requests the pleasure of your company
at a reception hosted by Baroness Doocey
to mark English Tourism Week and the launch of Rebuilding Britain’s Tourism Industry
on 24th March 2022
The Terrace, The House of Commons, Westminster
3:00pm – 5:00pm
Next steps towards introducing the UK’s first tourism taxes
A recent statement from the Welsh Government announcing a public consultation to be conducted in “Autumn 2022”, on the introduction of an adoptive local authority based tourism tax may have passed largely unnoticed, at least outside of Wales. We think it may be of great significance, not just for tourism businesses and for domestic and international visitors to Wales but also for all other parts of the UK. The arguments for and against such taxes may ebb and flow but what only ever seems to increase is the pressure on the amount of public funding available to support local services, tourism and destination management, including within that, destination development and promotion.
Although the Welsh Government’s statement is brief, it gives some clear indicators of the rational and the purposes for which such taxes might be used. Critically the announcement follows on from last year’s Government elections and the Welsh Labour and Plaid Cymru’s Cooperative Agreement, which now contains a commitment to introduce an (adoptive) tourism tax. Unless there are some major unforeseen developments, the consultation will almost certainly be about how, when and in what form such taxes will take, rather than about whether they should be introduced at all.
Meanwhile we know that the current administration in England is dead set against a new, additional taxes, notably even rejecting recent industry led proposals to pilot an accommodation-based tax in Liverpool (central area). It is also wrestling with how, if at all, to respond positively to the recommendations of the English DMO review with, in its original form, a £51m price tag over its first three years.
At some point soon someone is going to have to ask the question of the Westminster Government, “so with what then do I mend my bucket?”. Ignoring the well-known market failure issues within tourism, presumably in the hope that acting in universal, voluntary cooperative spirit the private sector will rise to the challenge, isn’t a workable solution. Despite best endeavours it hasn’t worked for the last 30 plus years, so what fundamental changes have occurred to make anyone think it might suddenly work in future? For one of the better descriptions of the marketing aspect of the market failure issues see the 2017 DCMS produced but never officially published paper at: https://britishdestinations.net/strategies-and-policies/tourism-industry-strategies-policies/market-failure-in-tourism/
If nothing else the proposals to be adopted by some or all local authorities in Wales will test and prove, one way or the other, some of the diametrically opposing views on the perils and positives of a UK based tourism tax on domestic and international inbound tourism. We will then know for certain if a tourism tax represents a viable, predictable and sustainable means of financing appropriate levels of local management of destinations for the mutual benefit of the visitor and the visited. Next step in development of tourism tax | GOV.WALES
Colleagues seek your assistance
Colleagues are seeking information on Visitor/Tourism Information Centre provision, including details of an innovative approaches and examples of tender documents, where facilities are run by third parties. I am also taking the opportunity to try and assess who is and who isn’t now providing traditional information centre services. This unfortunately necessitates a short reply from as many member destinations as possible.
See request under Britishdestinations.net, “Forum: ask questions get answers”, page or go direct to the questions at: https://britishdestinations.net/need-an-answer/tourist-and-visitor-information-centre-provision/
VAT campaign update, Parliamentary Reception Invitation and more…..
1. The Hospitality and Tourism industry led campaign for lower rates of VAT on tourism services and, specifically at this time, the retention of the emergency reduced levels in force until 31 March 2022 continues. Last week a paper outlining the benefits to both the industry and over time to the Treasury of retaining 12.5% VAT was published. The 17-page summary and 147-age full report can now be accessed in the main Britishdestinations.net research library: https://britishdestinations.net/research-and-statistics/
Destination managers may wish to circulate the summary to their partners as evidence of the ongoing efforts to secure permanent lower rates of VAT for the industry. I would inclined not to inadvertently suggest that there is any particularly strong likelihood of success in the few weeks remaining before VAT reverts to its original level. There has been nothing to suggest that it is likely and plenty in the recent heady mix of political, financial and pandemic related policy direction to suggest that special plea bargaining for tourism isn’t likely to score that highly, for the time being at least.
2. It has been decided to hold the 2022 Industry Parliamentary Reception which has been postponed for the last two years back in its traditional slot ahead of the first of the major Bank Holidays. The event will be held 24 March 2022 between 3 and 5 pm in the House of Commons Dining room. Since it is less 6 months since we held our last (delayed) joint conference with the Tourism Alliance and Tourism Society the two will not be linked this year (conference dates TBC), however, it is intended to get the two back in to sequence from spring 2023. British Destinations will, however, hold an officers’ meeting in the VB/VE offices from midday to 14.30 for those willing and able to attend both. Remote access for those unable to physical attend the officers’ meeting will be arranged. If you wish to attend the reception and/or the officers meeting email me and I will arrange to have invitations sent out to you.
3. Defra has just closed its evidence gathering consultation on the potential banning of a range of additional single use plastic items, for example, condiment or coffee sachets. The outcoming of this consultation joins the growing list of major environmental proposal awaiting announcement, like the Deposit Return Scheme, all of which could have some interesting practical implications for tourism and hospitality businesses, as well as much needed environmental benefits for people and places.
4. Defra are currently consulting on proposals to designate two new bathing waters. One of these is Wolvercote Mill Stream a channel off the upper reach of the River Thames in Northern Oxford. As we have been predicting since the application for designation of the UK’s first riverine bathing water on the Wharfe at Ilkley, the “mill pond” is well and truly breached and the pressure to designate far more rivers and lakes is almost certain to follow. As those on the coast who have been wrestling with the pros and cons of bathing water designation and requirement to then proactively manage them can testify, it is seldom without challenge.
The popularity of open water swimming combined with the removal of the very British excuse, “we don’t have any designated bathing rivers”, now means that designation should be pursued wherever “a large number of people bathe” in order to “protect bathers’ health by monitoring for intestinal enterococci and E.coli in the water”. Bathing for these purposes including paddling, especially by younger children. This becomes particularly difficult to avoid where public authorities facilitate access to the water by providing adjoining open public space, paths etc. and or facilities like parking and toilets. As with both Ilkley and Oxford we would expect a number environmental and water users interest groups to start campaigning for the adoption of bathing water status at many more sites in the coming months and years. If any colleagues need access to advise on bathing water issues, please let me know and I will put you in touch with UK Beach Managers Forum members who can give chapter and verse.
UK and other key strategy issues
1. In case anyone is wondering why I have not yet referenced last week’s Levelling Up White Paper; it isn’t because I have missed it or underestimate its obvious strategic importance. At this point I don’t feel I can say much that would add anything of value to what is a physically larger, broad-based paper, with big ambitions, covering most areas of Government, with potentially significant implications for almost everywhere, with a target delivery (completed) date of 2030.
Little or nothing within it is absolutely new. It is largely a compendium of policies and initiative that have already been agreed and announced, which means from our prospective that any immediate opportunity to shape them has already passed. Even the flagship devolution proposals for England aren’t exactly new. Some areas have already agreed to adopt devolved powers (power[s] in my book a mix of: authority, accountability, adequate recourse and responsibility) Some (many?) others have rejected devolution deal in an earlier form, presumably for good reason? I am not qualified to comment on whether the new devolution proposals are significantly different, offer greater benefits and, in particular, greater resources to deliver and are therefore more or less appealing. That hopefully is something that local authority-based members destinations can help me better understand?
Normally I would try to point you to key passages and reference to tourism to save you the effort of finding them. There are less than dozen fleeting references to tourism or associated issues, several of them historic, none of which that I can see add much to the tourism debate, albeit we should be pleased with the acknowledgement. Disappointingly the was no reference to the England DMO review. That might be a simple issue of timing, as the DCMS announcements have yet to be made, or indicative that the review’s recommendation to establish a pan England network that would surely have contributed to the levelling up ambitions, has not found favour, at least not favour and funding for an England wide roll out?
The 17-page summary and a 332-page White Paper, together with a 27-page Delivery for all parts of the UK documents and a further set of technical annexes and matrix (extremely useful for some), can all be accessed from one page. If nothing else it is worth scanning both the summary and delivery document: https://www.gov.uk/government/publications/levelling-up-the-united-kingdom
2. Of potential far greater immediate interest for destination managers is the simultaneous issue of the UK Shared Prosperity fund pre-launch guidance. This document outlines the nature of the fund, its criteria and gives indicative amounts potentially available to whom in what circumstances. It urges local authorities, Combined Authorities down to Districts, as appropriate, to start their planning and negotiations with partners now (assuming they haven’t already?).
If you haven’t already got to grip with the potential opportunities for tourism and the visitor economy arising for the fund and started restating the case for tourism, culture etc. within your organisation and/or with partners, now is time to at least start thinking about it if not doing it with some vigor. As has been pointed out to me by Andrew Bateman with his TMI policy hat on, the structure of the fund and accountabilities, begs some interesting questions for policies and places where local authorities have disengaged from or arms lengthened tourism as previously encouraged: UK Shared Prosperity Fund: pre-launch guidance – GOV.UK (www.gov.uk)
3. Confirmation of the delayed announcements of DCMS comprehensive spending review allocations are now trickling out from via other departmental announcements. I am not aware of a central DCMS announcement or as yet the critical VB and hopefully the DMO review’s allocation, if any, within that. We are told that a formal response to the DMO review will be published in due course, but are very unclear as to what that promise indicates. Hopefully that response will be preceded by or include within it an adequate allocation to make some or all the key recommendation work, preferably at a meaningful, pan England level.
Extension to Consultation date – Great British Railways’ strategy plan
If anyone wants to submit comments on the Great British Railways’ Whole Industry Strategy Plan, GBR have just indicated to me that they can and will take further comment/evidence until midnight Friday 11 February. There is both an online or an email option.
Not very long, I appreciate but if you agree with some or all of the points made in our response, long enough to submit something to reinforce them. Anything that helps establish in their mind that leisure rail travel represents a (the?) major opportunity for growth for them and is of equal importance to us in rapidly changed and changing circumstance would be appreciated. Even a simple note supporting the thrust of the British Destinations’ submission couldn’t harm.
See my original post of 7 February for more detail and the necessary links at: https://britishdestinations.net/2022/02/07/great-british-railways-whole-industry-strategy-plan-cc/
Great British Railways’ Whole Industry Strategy Plan.
The call for evidence for Great British Railways’ (GBR) 5, 10 and 30-year strategic plan has now closed (4 Feb 22).
Unless you are absolutely confident that private car ownership and usage and, consequently, its current role as the primary means of transport for much of the leisure and tourism activity within the UK is not likely to change in any significant way, then I would suggest that helping positively shaping GBR’s 5 to 30-year strategy is of fundamental importance to both domestic and inbound international tourism and the future success, or indeed potential for failure, of some if not many of the UK’s popular urban and rural destinations.
Although it may be too late to directly influence the general thrust or some of the detail of the strategy to be presented to Government, via the formal call for evidence, it may not yet be too late to submit unsolicited (late) views to GBR, or to start proactively raising your views with local MP’s and/or any and all other tourism, transport and rail interest groups you have contact with. The aim being to create wider and reinforce better understanding of the threats and opportunities for both the UK rail network and for tourism and leisure across much of the UK. Get the strategy right and rail could once again be the prime mover in developing, sustaining and growing tourism, get it wrong and both the rail network and tourism could (will) almost certainly suffer.
Once the strategy options have been formulated there will undoubtedly be formal and/or informal opportunities to comment on the proposed direction before it is adopted, after its presentation to Government later, we believe, this year. If anyone doubts there is a problem looming it is worth noting that the £1bn plus monthly cost of simply operating a still reduced rail service (trains costs, staff, fuel/energy) is now falling largely to the tax payers.
Previously the “subsidy” to train operating companies (TOCs), after fares where deducted, was in the order of £0.6bn per year. Costs of this magnitude clearly can’t be sustainable and regardless of what we or the strategy has to say, something major must give and give soon. So, in addition to trying to influence the future strategic direction, colleagues would be well advised to be both mindful of, and alert to, the intended and unintended consequences arising for off peak leisure travel, as a direct or indirect result of restructuring of previously almost untouchable peak commuter services.
Essentially if rail is an important carrier for your destination, don’t just automatically assume a return to normality, must necessarily means that normal rail service will resume soon, if ever. The network is broken, hence, effectively chunks of it have been taken back into public ownership, some of it potentially permanently and, hence, the urgent need for a particularly, radical new strategy and the current fleeting chance to reposition rail at the very least as a major, if not the primary, vehicle for visitor movement, as it was in its earlier history.
As is often the case we have chosen to submit a longer narrative response giving the answers to questions we think GBR and other need to hear, rather than just answering the narrower set questions posed in the call for evidence. More details on the consultation and a copy of British Destination’s response can be found at: https://britishdestinations.net/consultation-responses/open-consultations/great-british-railways-whole-industry-strategic-plan-closing-4-feb-2022/
British Destinations