Examination of Witnesses (Questions 160
THURSDAY 26 APRIL 2001
ANDERSON, MP, MR
160. It was proposed to reduce the funding in
2001-02 and then onwards. Only because of foot and mouth disease
have they been given additional funding, which is obviously desperately
(Ms Anderson) That is certainly true.
The additional £6 million has been in recognition of this
particularly difficult situation. But we would always argue with
our colleagues at the Treasury for better funding for tourism.
We always have done so and we will continue to do so. That applies
both to the English Tourism Council and to the BTA.
161. As I understand it, the BTA were facing
reductions in their budget. We also understand that the English
Tourism Council has no budget for marketing, and that many of
the regional tourist councils have no budget for marketing. Quite
frankly, that is not good enough given the importance of tourism,
and what you rightly said about its place in the economy. You
have travelled around, you have seen not just what is going on
in this country but you have been abroad, and I am sure you have
made comparisons with the level of funding that is made available
by governments abroad for their tourism agencies, both for domestic
markets and international. What is the comparison? Do you not
think there is much more that we need to do?
(Ms Anderson) I would certainly like
to do more if we can. That is why I very much welcomed the Prime
Minister's announcement yesterday that there is to be additional
funding, and we will hear what that is to be in the next few days.
The reason for setting up the English Tourism Council without
a marketing role was that when we reviewed the support for tourism
in the country, there was a feeling, I think, which was shared
by everyone, including the industry, that there was a need for
a leaner, more strategic body, that would provide some much-needed
leadership and research facilities for the industry. In tourism
you cannot be complacent, you cannot sit still; you have to constantly
re-invent yourself. That is why I very much welcomed, for example,
the work that the ETC has done on our seaside resorts. They have
produced a very helpful report on how we might do more to re-generate
our seaside resorts. Many of them are facing quite difficult times,
and it is interesting that those that have tried to re-invent
themselvesBrighton, Bournemouth, Morecambe and Scarboroughare
doing much better now. So there is a need for that constant research
to help the industry understand what the changing consumer demands
are and to take steps to meet them.
162. There are lots of other problems that tourism
in this country faces, and has been facing in the last year, other
than foot and mouth disease: the high level of the pound, general
costs, fuel costs, the cost of travel. One of the points that
I made to earlier witnesses was that I understand now the cost
of travelling on the train from London to the Lake District can
range from anything up to £250, and for that you could have
a couple of nights away in most European cities; you could certainly
have a flight to the States. What is the Government doing to try
to bring together all of these different organisations and agencies
that could assist in trying to make tourism in the UK easier and
more effective and more cost-efficient, given that 90 per cent
of the market for tourism is domestic and not international?
(Ms Anderson) We understand that very
well, and when we produced our strategy for tourism, about two
and a half years ago now, I think potentially the most important
proposal in that, upon which we have now acted, was to set up
a ministerial summit each year. We have now had two of those.
The last one was on 6 March, rather aptly timed because it was
by then that we began to understand the effect of the situation
on the tourism industry. That brings together ministers from every
other government department, including the Treasury, and we ask
them to make sure that when they are making policy, when they
are taking decisions in their own individual departments, they
think about the impact on the tourism industry. As a result of
the first tourism summit, for example, MAFF announced the enterprise
scheme which made funding available to farmers to diversify. You
have raised transport. That is a very good example. You can go
to almost any resort or any tourist attraction and there will
be some kind of transport issue. It might be that there is only
one road going in and one road going out, and they get very congested
in the summer months. It might be, as you say, the cost of rail
travel. We use that ministerial summit all the time to emphasise
to our colleagues in other government departments when they are
taking decisions to think about the likely impact on tourism.
It could be employment law it could be licensing, it could be
all sort of things. Planning is something that comes up. One of
the things that we achieved from this year's summit was a review
of signage in DETR, because we get complaints from people all
round the country that practices in terms of signage are inconsistent,
that some people get signs to their attractions and others cannot.
That is an example. We are talking about acorns rather than oak
trees, but we are building on that. It is something that works
very well, for example, in a country like Greece, where tourism
is even more important than it is to us here.
163. My constituency of Feltham and Heston has
no castles, stately homes, or beaches but people often forget
the 55,000 permanent jobs at Heathrow Airport. My constituents
suffer the environmental damage and noise but they are proud to
contribute. Is BAA's income taken into account when calculating
the tourism figures?
(Ms Anderson) I am really not sure. I
am going to ask Mr Leonard to comment.
(Mr Leonard) One of the interesting things
about tourism is that, while it is an industry in certain respects,
as you have referred to it this morning, a hospitality industry,
hotels, attractions, for example, it is also an activity which
has fingers in all areas of the economy, such as in transport.
We have been looking these last few months at the use of tourism
satellite accounting, which would measure those kinds of figures.
It is very much part of the Government's strategy to treat tourism
not just as an industry in the sense that it has hotels and it
has attractions that charge people, but as a whole range of what
the economists call demand-side activity, which includes purchase
of transport. That is very much part of the work we are doing
strategically, and it is part of the reason why ETC was given
a strategic role to look at these aspects. Malcolm Bell, who was
before you earlier, has done some very good work in the South
West to measure the amount of money spent in the South West on
marketing every year by the public and private sector. It is £170
million spent in the South West every year on marketing, almost
all by private bodies. It is the strategic capturing of all that
expenditure which is very much part of the Government's tourism
(Ms Anderson) If I can just add to that,
if we could establish a tourism satellite accountingand
we do not do it in this country and it is, as Mr Leonard has said,
something we are looking at in the Departmentit would be
very welcome to the industry because we need a proper, accurate
measure of what tourism does mean to us as an economy. On your
point about Heathrow, Heathrow is very important. Previous witnesses
from the English Tourism Council mentioned a report produced by
the British Tourist Authority called "First Impressions",
and this was about the impressions that visitors get when they
first arrive. Heathrow is obviously a very important port of entry,
and I have set up a group in my Department with representatives
from the public and private sector to look at that to see if we
can do more to make our ports of entry more welcoming. For example,
we some time ago persuaded the Home Office to make arrangements
to be more welcoming to some of our visitors from overseas, so
that when people come in on tours, which is particularly a problem
with Japanese visitors, they can be got through the procedures
more quickly in recognition that they are genuine tourists. We
constantly look at this; it is very important. Heathrow is a very
busy airport, and anything we can do to make it more friendly
we will do.
164. Because Feltham and Heston is not a mecca
of tourismit was a joke that the two best restaurants were
the north and south services on the A4 at Heston, but the Minister
knows that is not the case because when she came, though not in
the same capacity, I took her to the Passage to India, which is
where the Champion curry chef cooks every day. That leads me on
to another point. A lot of my time at advice surgeries is spent
trying to assist relatives of constituents of mine to get visas
to come in for holidays to the United Kingdom. We are actually
stopping potential tourists from coming in. I think that is a
point worth noting. It is not really your Department's remit.
(Ms Anderson) No, it is not my Department's
remit, but that is a very good example, Mr Keen, of why I believe
the ministerial summit, the tourism summit we hold once a year,
is very important because it is exactly those kinds of representations
that we can make to our colleagues at the Home Office, and we
165. As the Foreign Secretary said the other
day, Britain is a multi-cultural society, and that has an attraction
for overseas visitors, I believe, and I think we should take account
(Ms Anderson) It certainly does, and
the meal I had at Passage to India was excellent and I remember
it very well, thank you.
166. Can I ask about the budget for the British
Tourist Authority? I can give you the Hansard quote, but it does
say that BTA was going to have a reduced budget for the year 2001-02
and subsequent years until the foot and mouth broke out. What
is the story? Are they or are they not?
(Ms Anderson) We are reviewing the BTA's
position at the moment. As I have said, Mr Wyatt, I am very pleased
that we are to be allocated more money for tourism, as the Prime
Minister announced yesterday, and I look forward to hearing exactly
how much that is in the next few days.
167. But is it not remarkable that an industry
that is one of the biggest in Britain should be seen to be getting
a cut? It seems to me that if the turnover for tourism is £6
billionis that what you said?
(Ms Anderson) The contribution to the
economy is £64 billion. It is three to four per cent of GDP.
168. So a budget of £35 million is something
less than 0.1 per cent to actually encourage one of the fastest
growing industries in the world. It just does not add up.
(Ms Anderson) As I say, we would always
like to do better, and we are reviewing the BTA's position at
the moment, but they use that money very effectively. They have
27 offices in our key markets abroad, and they also use the money
that they are allocated by the Governmentthat is the grant
in aid figureto lever in a lot of private money as well.
We think that they do an excellent job, but we are always ready
to listen to requests for more, because we do understand the importance
of the tourism industry.
169. Mr Donoghue pointed out in his evidence
that in our report on the tourist industry we cited the fact that
the entire marketing budget of the British Tourist Authority for
the whole of the Americasnorth, central and southis
less than the tourist budget for the state of Virginia.
(Ms Anderson) As I say, Mr Kaufman, we
are always willing to listen to requests for more and we will
always do what we can to help.
170. Yesterday I gather you met your counterparts
from Scotland and Wales. I think this is the first time all the
ministers have met. Is that right?
(Ms Anderson) Yes, it is.
171. The other three are domiciled not in culture,
media or sport. They are domiciled in economic or business areas
in their own assemblies or parliaments. Given that, do you really
think on reflection that DCMS is the right place for tourism to
(Ms Anderson) I am bound to say yes,
because it is my job and I enjoy it very much. On a serious point,
yes, I do think it is the right place to be, and for this reason.
I think it fits in so well with the other responsibilities in
the Department: with culture, with sport, with our historic heritage.
I think that is where tourism belongs.
172. You do not feel that the DCMS is seen as
a weaker department by the Treasury, and that tourism being in
it, it weakens the position of tourism? As it is one of our bigger
industries, it makes it much harder to argue for. I will give
you an example. In Ireland ten years ago they halved the rate
of VAT on accommodation and within four years they tripled the
number of visitors. We have the highest VAT rate on bed and breakfast
and hotel rooms, as you well know. It would be nice if that could
be cut immediately, now, in crisis, to get B&B back. It is
mainly British people who actually go for B&B. Because DCMS
is perceived by the Treasury to be a weaker department, it means
tourism is weakened.
(Ms Anderson) We are the smallest department;
that is certainly true, but I was very encouraged when we had
what I describe as our "OFSTED". We were the first department
to be "OFSTED-ed". That report said we were a department
that punched above our weight in Whitehall, and I think that is
certainly true. If there is one good thing to come out of this
current situation, it is that people do now understand the importance
of tourism. They understand that it is the fastest growing industry
in the world and that we are going to have to compete very hard
to try and keep our fair share of it, as previous witnesses have
outlined. I am very sad that it should have happened in this way,
but I think tourism is now much higher up everyone's agenda.
173. Finally, we have this rural task force.
I was in Aldburgh at Easter. Cambridge, Norwich, Colchester, Ipswich,
Bury St Edmonds are destination towns and cities where people
go for a day or two and then move on. These are not rural; these
are large urban areas. Given that what has happened this year
may have an effect on tourism for the next two or three years,
so many people will think twice about re-investing; they might
get through this yearor they may notbut they certainly
will not come back if they are in the business, what we probably
need is a tourism regeneration package, and that is millions of
pounds, and that is needed tomorrow really. I do not feel that
sense of urgency, that the Government understands this.
(Ms Anderson) As I say, the Prime Minister
said yesterday that there was going to be an extra allocation
of funding, and he will be announcing how much that will be in
the next few days. I have said many times, Mr Wyatt, that when
this is over there will be a need for a marketing campaign. It
is recognised by DCMS, it is recognised by ETC and particularly
by the BTA, to restore confidence in Britain as a visitor destination.
There is no doubt about that. Our greatest fear is that visitors
may feel deterred, that our domestic market will be more likely
to go overseas and our visitors from abroad will be more likely
to go elsewhere, and once they have been displaced, it will be
doubly difficult to get them back. So there is no doubt that we
need to do some intensive marketing when we have the all-clear
to do that.
174. I am not sure you have really explained
to this Committee why it was that, as the responsible minister,
who fully accepts that there is a growing tourism market and that
we do not actually get our fair share of it; we have a deficit,
you were prepared to preside over a shrinking budget for BTA.
(Ms Anderson) As I say, BTA for the present
year are getting £35.5 million. We are currently in the middle
of reviewing their remit and what they do. We have to reach a
conclusion on that. They are now getting extra money, I am very
pleased to say.
175. Why did you plan to give them less?
(Ms Anderson) I am not sure we ever did.
(Mr Broadley) The plan is that they should
receive £35.5 million in each of the next three years. That
is the same in cash terms, but obviously with inflation...
176. It is a real-terms cut. Why was that planned?
(Ms Anderson) We felt at the time that
that was sufficient for BTA to do the job they were doing, and
it is a job they do very well.
177. You have told us, Minister, that actually
we have a shrinking market for tourism, yet it is growing worldwide.
How could you possibly think it was right to have a diminishing
(Ms Anderson) It is growing worldwide.
It is a global market. We are competing with all sorts of other
countries. It becomes more and more competitive.
178. So why cut the budget?
(Ms Anderson) As I understand it, we
were not cutting BTA's budget. They have now had additional money
and they are going to get some more.
179. Mr Broadley just said that it is a real-terms
cut implied in the budget for the forthcoming years.
(Ms Anderson) I think I can proudly stand
on our record of the money that we have allocated to the support
of tourism, and as I recall, when we came into government we were
faced with a situation which had been left to us by the last Government
which had reduced the funding for the English Tourist Board from
something like £25 million at its height to less than £10
million. We have got that back up to £12 million, and I would
like to do more, but at least it is being increased.