Jack Irvine is a former newspaper editor and now chairman of a crisis management and public affairs company. He is also Campaign Director of the Cut Tourism VAT Campaign.
A report published earlier this year by the House of Lords described UK seaside towns as being “at the end of the line” in both a physical and metaphorical sense. Of the 31 largest UK seaside resorts, 25 are more deprived than the national average. Indeed, several are amongst the most deprived areas in the county.
Blackpool, for example, which is one of the most-densely populated places in the country outside of London, has the lowest life expectancy in England and the unenviable title of “England’s unhealthiest town”.
The UK Government’s Indices of Multiple Deprivation reveal that nine of the 10 most deprived regions in the UK are coastal areas, including the seaside village of Jaywick, near Clacton-on-Sea, ranked as the most deprived neighbourhood in England in 2010, 2015 and 2019.
UK seaside communities suffer from high levels of unemployment, crime and substance abuse. Workers living in seaside areas in Great Britain earn on average £1,600 less per year than those living inland, and two-thirds of coastal areas have seen a real term fall in wages since 2010. Poor education standards and the lack of work opportunities encourage the bright and best youngsters to leave whilst the high number of retirees, who often relocate to the coast, places an intolerable strain on local NHS resources.
To make matters worse they have become dumping grounds for councils from London and the South East who actively relocate social rejects, immigrants and asylum seekers from larger English towns and cities to seaside towns, causing tension within the local communities.
The ignorance of many MPs and ministers towards the state of seaside communities is particularly surprising as coastal constituencies elect a quarter of all MPs. When I visited Amber Rudd in her run-down Hastings constituency office, she appeared completely ignorant of many of the problems that were obvious to anyone who wandered along the seafront. When we pointed out the importance of the hospitality sector to Hastings and the problems it is currently facing, we were told blithely that don’t worry “we have a new putting green”. Clearly the answer to Hastings woes.
At least she was aware that hospitality played a role in her constituency. When I visited Oliver “Two Brains” Letwin at Rockley Park Holiday Park in Poole he was not even aware that the industry was located in his constituency, despite the fact it was the largest employer. He has been the member for West Dorset since 1997 – for 22 years.
The fact these seaside communities returned 91 Conservative MPs at the last general election was in spite of, not due to, government policies.
Successive governments have failed to address the core issues surrounding the deprivation and lack of aspiration in a great many of these coastal towns. You have the frankly insulting Coastal Communities Fund which has invested a paltry £229 million into 369 projects UK-wide since 2012. £229 million would barely sort out the problems facing Blackpool, and the fact these communities are having to compete for a trivial sum demonstrates the complete disconnect between Westminster and the rest of the country.
Making matters worse for coastal communities is the behaviour of the Treasury, which is actively damaging the one industry that is regularly investing in our coastal communities – the tourism sector.
Unbeknown to many in the Westminster bubble, tourism and hospitality are in fact two of the UK’s economic crown jewels, generating £143bn for the Exchequer each year and employing nearly 15% of the country’s workforce. Together they are Britain’s fourth largest industry, employing people in every region of the country, and the UK’s sixth largest export-earner.
Despite this, the UK currently maintains the second highest rate of VAT on tourism in Europe, and is the only European nation which does not apply a reduced rate of tax or special dispensation for tourism services. This puts the UK’s tourism industry at an inequitable disadvantage to our European neighbours as destinations on the continent are frequently viewed as providing greater value for money.
The 2019 Travel and Tourism Competitiveness Report, published last month by the World Economic Forum, ranked the UK last out of 140 nations on price competitiveness and offering value for money. This is highly damaging for the UK’s coastal communities, which disproportionately depend on tourism.
The hospitality sector is very price sensitive – as demonstrated by the Republic of Ireland. In May 2011 the Irish government cut the rate of tourism VAT from 13.5% to 9% which resulted in international visitor numbers increasing by 7.2% in just two years, leading to the creation of 30,000 more jobs.
Rather foolishly, considering the ongoing uncertainties linked with Brexit, the Irish Government decided to raise tourism VAT back to 13.5% at the start of 2019, which has resulted in visitor expenditure falling by 4% this year and the number of visitors to major tourism attractions down 10%.
Whilst this has been bad news for the Republic’s 20,000 tourism and hospitality businesses, things are much worse north of the border. Due to the imbalance in VAT rates between the Republic (13.5%) and Northern Ireland (20%) we have seen the massive expansion of day trips across the border with large number of tourists visiting the sights of Northern Ireland but staying in cheaper accommodation across the border. One Northern Irish hotelier joked to me earlier this year that the industry could benefit from the return of a hard border as it would stop tourists from disappearing back to the Republic every evening.
A more peaceful and productive solution would be for the UK government to establish a progressive tax environment, which encourages existing and new coastal enterprises to invest in their business and staff. Using the Treasury’s own Computable General Equilibrium (CGE) model, the Cut Tourism Vat campaign has calculated that a reduction in VAT on tourist attractions and accommodations from 20% to 5% would lead to the creation of 43,000 jobs in year one, and more than 121,000 jobs over the next decade.
As a point of comparison we need only look at the recent claims that the renewable energy sector can play a vital role in revitalising coastal communities, despite the fact it would only create an estimated 6,000 jobs over the next decade.
Yet creating more jobs and encouraging enterprise in coastal communities is only the start, and must be accompanied by improved education and training provision, with government investment in critical infrastructure, including improved broadband, rail and road connections.
The UK government must also support local authorities to help them tackle social issues and housing problems, including multi-occupancy, which creates negative impacts in coastal towns and reduces their attraction as visitor destinations.
The Prime Minister made the right noises on his first day in office – pledging to support Britain’s ‘forgotten’ seaside communities, but quasi-Churchillian speeches are not enough. If the Conservatives under Johnson are to win a majority they must start caring for our coastal communities.