Written evidence submitted by The Orchard Tea Garden
The Chairman
Culture Media and Sport Select Committee
15th March 2022
Dear Chair
I beg to be permitted to make a late submission to the work of the Culture Media and Sport Select Committee of the House of Commons on Promoting Britain Abroad. Until I heard of your committees visit to Knebworth House I had no idea it was considering the issue.
Visit Cambridge, which used to be the tourist body for Cambridge and the surrounding areas, including Newmarket and Ely, didn’t survive the tourist recession caused by the Covid 19 pandemic. In normal circumstances it is this body which might have submitted evidence to your enquiry but in its absence, I trust you will enable me to do so with this written submission as I have some important issues to raise.
I run the Orchard Tea Garden in Grantchester. It is regularly included in the top ten tourist attractions for Cambridge. Its alumni of famous customers include Rupert Brooke, Virginia Woolf, Alan Turing, Stephen Hawking, together with several former prime ministers and presidents of overseas countries, and many famous names from literature, screen, and stage.
The Orchard is immortalised in Rupert Brooke’s best-known poem: The Old Vicarage, Grantchester, with its famous final lines:
Stands the church clock at ten to three.
And is there honey still for tea?
The Orchard Tea Garden is regularly included in lists of the top ten places to take afternoon tea and is regularly included as a destination in national television programmes.
It is often said that it is a rite of passage for every Cambridge student to walk, canoe or punt up the River Cam to The Orchard to take afternoon tea in the tranquillity of the fruit trees of “God’s little acre.”
The Orchard Tea Garden was founded 125 years ago. In 1992, The Orchard was threatened with a planning application for housing. Knowing its historical importance to Cambridge, the Tea Garden was saved from redevelopment by Robin Callan, my uncle, who purchased it, very nearly causing his bankruptcy. He sought to run the Tea Rooms on a pro bono publico basis "not for a profit but neither for a loss".
On Mr Callan’s death he gave the Orchard Tea Garden land to Cambridge Past Present and Future, a local preservation charity to make sure it could never be built on, together with a significant cash gift. It was to his family that he left the responsibility of running and maintaining the tea garden business. It continues to be run by Mr Callan’s family as best they can as 'a community asset,’ with the same ‘pro bono publico' ideal, while knowing it must trade profitably if it is to continue in business and be enjoyed by generations to come.
The Orchard Tea Garden deliberately allows open access to visitors 24 hours a day 363 days a year. This is because we want it to be a place where people can come and sit by themselves and think, or be with friends and chatter, at any time without obligation. We simply ask that visitors don’t picnic. Two tragic deaths in and close to the Tea Garden during the pandemic highlights how very important spaces like the tea garden is to our people, particularly as our country gets more crowded.
The Tea Garden is highly weather dependant. This means it makes money in May to September. It loses money between November and February and breaks even during the other months of the year. It means we are the same as most tourism-based businesses; we have five months to make a profit, and this has to sustain us over 12 months of costs.
Cambridge is the third most visited tourist attraction after Buckingham Palace and Bicester Village for the Chinese visitor. This is because of Xu Zhimo’s poem ‘Leaving Cambridge for the Second (or Last) Time’ is learnt at school by rote by every Chinese school child. Xu Zhimo is as famous in China as Shakespeare is in the United Kingdom.
Xu Zhimo’s poem was inspired by his time as a pupil at King's College, Cambridge. King’s College, in recognition of its connection with this famous poet, imported a rock from Beijing, engraved it with his poem, and placed it in a small Chinese style garden in the College grounds. This generated a moneymaking opportunity for King's College through entrance ticket sales, but a nightmare for the City of Cambridge.
Xu Zhimo also visited the Orchard Tea Garden. We thought we would leverage his connection to increase our trade too. To this end we had a marketing leaflet produced describing The Orchard Tea Garden in Chinese. The knowledge we gained in seeking to access this market is quite illuminating.
Cambridge is one of the primary destinations for any Chinese person going on a national or European tour. The average price charged for a ten-day all-inclusive UK tour (which might include Belgium and France) was the renminbi equivalent of US$1,200 to US$1,500. This price includes a return air ticket, hotel accommodation, coach travel, breakfast, dinner, a packed lunch and a tour guide. The Chinese UK inbound market was so sensitive to price that it could not afford the price of an afternoon tea, even at a discounted price.
Cambridge is a stop off point between London and York on the national tour. The dwell time for the average Chinese tourist in Cambridge was just two hours. Apart from the ticket money spent to get into King's College, it became evident that mass tourism brought no discernible financial or other benefits to the City.
In the summer, Cambridge became quite unpleasant with its roads clogged with coaches while the city had the cost of providing toilet and waste disposal facilities, but with none of the benefits. The primary outcome has been to make an elite and very wealthy educational charity even richer, while the rest of Cambridge has suffered.
The effect of mass inbound tourism in Cambridge has been to drive out the Staycation or Short-Stay tourist, and not only from Cambridge but the surrounding areas of Ely and Newmarket too. Staycation or Short-Stay tourist are known to spend more money and more widely in hotels, restaurants, shops and cafes which in turn benefits the local economy.
The lesson to be learned from the Xu Zhimo experience is that while mass tourism enables the airlines, hotels, coach companies and shopping centres (like Bicester Village) to enjoy most of the income, the indirect costs and burdens are borne by a local population with significant disruption to their lives – and this applies equally to the Cotswolds as it does to Cambridge.
It is, of course, important to consider the cultural aspects of in-bound tourism for I am a strong believer in the adage that “those who trade together are at peace together.” However, two sixty-seater coaches arriving at our Tea Garden without warning with the same nationals each ordering a cream tea but not speaking a word of English, not learning the importance or relevance of the place they are visiting, instead staring at their mobile phone taking selfies while not looking or wondering at what was about them, achieves very little in terms of learning and cultural exchange. Further, by their sheer dominance in numbers, these coach customers had the effect of driving away our regular customers because they felt as though we had been taken over. Everything works so much better when it is in moderation.
Cambridge is the home of very many language schools. We are fortunate to host a large number of their pupils who come to learn about The Orchard and its place in our cultural heritage while they are learning English. The work of our language schools in cultural development is significantly more important in developing the soft power of the United Kingdom than mass tourism. And, as former executive chairman of the UK’s largest single establishment language school, at one time teaching 2,000 pupils a day in the summer, it is a subject on which I can speak with considerable authority.
Those who lobby parliament and are invited to give evidence are the main trade bodies, like Hospitality UK. But they speak mainly for their larger membership. The ones who benefit mostly from mass in-bound tourism. Sadly, no one speaks for the uninvolved third party who bears the cost, both directly and indirectly, in financial and life style terms from mass tourism.
This enquiry gives parliament the opportunity to consider the externalities of mass tourism on the UK for it is an important issue which never gets on the agenda.
The Orchard Tea Garden estimates that, in a normal year, we would receive around 120,000 visitors and most of those would come between May and Mid-October. It is a destination for cyclists and walkers. The popular TV detective series, Grantchester, has also helped put the village on the map. The burden placed on the village and its inhabitants from such a large number of visitors, particularly at weekends, should not be underestimated.
To give you an example of the burden, during the pandemic, when we were shut and people were supposed to be at home, we still had to pay to have taken away about 480 litres of rubbish (two large domestic wheely bins) which people left in our grounds every day.
Given the heritage of the Orchard Tea Garden and its number of visitors, we would have thought that Cambridge County Council, who has “declared a climate and environment emergency” and is claiming “it is working to reduce our carbon emissions” would have wanted the Orchard Tea Garden well signposted. Not least because of the environmental benefits of making sure that cars didn't have unnecessarily long journeys.
However, despite the Orchard Tea Garden meeting all the requirements, including our venue being a site recognised by Visit England, getting brown tourist road signage turned out to be an administrative nightmare. I will explain:
a) Grantchester lies almost equidistant between two main roads - the A603 and A1134. They are both major roads into and out of Cambridge, connecting to Junction 12 and Junction 11 of the M11 respectively. We were not seeking signage from the M11, but we thought it would be sensible to have brown tourist signs giving directions to the Orchard Tea Garden to come off both A roads. But apparently not! According to the Traffic Management Officer of Cambridge County Council’s Integrated Highways Management Centre, their rule book states we can only have a brown tourist sign coming off one A road, and we had to choose one of them. Why?
b) From the A603, there are two roads to Grantchester. Both roads are of a similar nature and suitable for traffic. In these circumstances you would have thought Cambridge County Council would have approved brown tourist signposts at both junctions. But apparently not. According to the Traffic Management Officer, Cambridge County Council’s rule book states we can have only one brown tourist sign coming off one A road, and we had to choose one of them. Why? Which ever one we chose, it would have meant a car coming in the opposite direction would have travelled an unnecessary extra distance with its obvious adverse environmental impact– and at a time when the council have declared an environmental emergency!
c) Again, according to the Traffic Management Officer, “current legislation does not permit brown tourism signs to advertise a specific location and have to be generic”. Further, they told us that “all our private signage would have to be removed if they were to install brown tourism signs”. This was on the grounds that “having a mixture of private and brown signs is inconsistent and can confuse drivers”.
i. Except both Wimpole Hall and Anglesey Abbey in Cambridgeshire have both private signage and brown tourism signs; and
ii. Wimpole Hall, Anglesey Abbey, and Linton Zoo all have brown tourist signs with their full names on them, and
iii. The brown signs proposed by Cambridge County Council didn’t include our name or the Visit England crest. It just said Tea Room with a picture of a cup!
I had prior warning from a Cambridgeshire CC councillor that the task of getting a brown tourist sign would be impossibly difficult because he’d had a bad experience in getting a signpost put up directing traffic to the local rugby club.
At a time when tourism and hospitality businesses are genuinely struggling to survive, one would have hoped that County Council officers would have taken a constructive approach to helping businesses in their county. Instead, they operate, through a rule book more attuned with a command-and-control culture of exercising power over us rather than seeking to serve us.
So horrendously obstructive was the attitude of Cambridgeshire CC officers towards our application for brown tourist signs that in the end we gave up.
County Council officers have an unlimited amount of time to obstruct, hinder and delay. We, the small businesses, who pay our taxes and thus their wages, only have a limited amount of time as we have the daily burden of running a business, with the responsibility of dealing with the plethora of additional regulations thrown at us every year by government.
I would like to suggest that your committee recommends that the Department for Levelling Up, Housing and Communities issues guidance to Local Authorities requesting that in respect of tourist brown signs they take a positive and constructive approach to working with Visit England heritage sites in the future.
For the avoidance of doubt, I should emphasise that we have not had the same kind of negative cultural approach from South Cambs District Council. On every occasion we have dealt with them they have been constructive, positive and helpful in every way.
It would be both remiss and negligent of me if, in making my submission to the Culture, Media and Sport Select Committee, I did not raise the issue of the economic storm which is currently hitting the hospitality and tourism sectors. A storm which, after Russia invaded Ukraine, is about to become an economic hurricane in its intensity.
1) Reduction in sales income
We know that family disposable income is about to fall dramatically. The rise in the price of petrol, the increase in the cost of heating a home, together with the increased costs of the family's weekly shop means that the average family can expect to be about £300 a month, or £3,600 a year, worse off.
The Russia-Ukraine war is making people who would normally visit England nervous about travelling, and there is not a country in the western world whose people are not already seeing a dramatic reduction in their living standards too. And there are still those who remain nervous about travelling following the Covid pandemic. We must assume that pre Covid in-bound tourism activity levels are not going to be seen for some time yet.
With all of us having much less disposable income in future, and with in-bound tourism distinctly uncertain, the hospitality and tourism sectors must plan for a dramatic fall in sales in both volume and absolute revenue terms over the next couple of years.
2) Increase in real costs
Between October 2020 and August 2021, the Orchard Tea Garden suffered an inflation rate of between 18 and 23%. This is because:
a) To attract and retain staff we increased wages by between 25% and 33% depending on the skill set. No one was employed on the minimum wage.
b) In those eleven months plain flour rose by 66.8%, sugar rose by 36.9%, Cream by 32.9%, Jam by 24.6% and cakes by between 37% and 39%. Even paper blue rolls rose by 41.7%.
Between August 2021 and December 2021 flour rose by another 9.2%, Sugar rose by another 14.3%, Cream by 8.2% and a Victoria sponge cake by 13.9%.
Our electricity bill has just increased from an average of £1,300 per month to over £3,100 per month.
The inflationary figures published by the Government do not reflect the reality of what everyone in the sector can see is happening with their own eyes. I am reminded of what George Orwell wrote in his book
- 1984:
The Party told you to reject the evidence of your eyes and ears. It was their final most essential command.
We cannot afford to absorb these additional costs as our balance sheet, as is common throughout the hospitality sector, was hit very hard by the pandemic. In the year ended 31st March 2021 we were only able to trade for 17 weeks out of a possible 52 weeks. This meant we had 17 weeks of income to cover 52 weeks of costs. Three times in the space of sixteen months we had to write off thousands of pounds worth of uninsured and uninsurable stocks. Further, when we reopened in Spring 2021, after being shut for four months, we found we had significant equipment failures when we restarted machinery after it had been turned off for so long. It meant a huge investment in new equipment – and industrial catering equipment is not cheap. And this saga is atypical of all small operators in the hospitality sector.
We have no alternative. We must increase our prices on 1st April 2022 if we are not to trade at a loss.
The inflexion point in the elasticity of demand curve and the effect of a 60% increase in the rate of VAT
Goods and services in the hospitality sector are considered elastic in economic terms i.e., a change in price directly results in a change in the demand for its products or services.
There is a genuine risk that, with household incomes severely squeezed, any increase in sales price which must be made to cover the sectors increase in costs could result in a much bigger fall in total income. This is because the sector will have reached the inflexion point in its elasticity of demand curve.
To put this into context – we currently sell a cream tea for £8.60 (of which the government currently gets £0.95 in VAT at 12.5%). We need to increase our selling price to around £9.45 (of which the government would get £1.05p in VAT at 12.5%) if we are to cover our costs. My assessment is that at £9.45 the price would be too high and my volume in sales is bound to fall.
The government plans to increase our VAT rate by 60% from 12.5% to 20% on 1st April 2022. This means that I would have to increase the price of a cream tea from £8.60 to £10.08 of which the government would take £1.68 in VAT at 20%. At a sales price of £10.08 for a cream tea I can confidently state that sales would collapse and with it the government tax take would collapse too.
Whatever the government and the bank of England says, we are in a period of hyperinflation. For the government to increase VAT on hospitality non-alcohol sales from 12.5% to 20% on 1st April 2022 would add to inflation, reduce its overall tax take, and comprise the economics of the mad house.
Yours faithfully
Charles Bunker
Director