Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses(Questions 40-59)



  40. Is that ring-fenced for the whole of the Britain? You are not ring-fencing just for England.
  (Mr Quarmby) The new organisation will operate under a regime where there will be two distinct funding streams which will be embodied in our funding agreement. One funding stream will be for overseas marketing. The second funding stream will be for the domestic marketing of England and the accounting arrangements within the organisation will enable the use of those funds to be completely transparent. The third point to add is that there will be strengthened accountability of the new organisation to the Scottish Parliament and the Welsh Assembly to enable this accountability to be made very clear.

  41. Are you happy with this arrangement?
  (Mr Quarmby) We were not the architects of the new arrangement.

  42. I take it that is a no.
  (Mr Quarmby) No, I am not saying that. I am saying I believe it is entirely workable and we are very confident about the way in which the new role can be brought about. It will complement our new overseas marketing strategy and I am encouraged by the warm response we have already had from the industry and indeed the recognition—I perhaps would not use the word support—but certainly the recognition and acceptance by the leaders of the devolved administrations in Scotland and Wales expressed in press statements they made last week.

  43. How does the amount of money you have available for the promotion of Britain overseas compare with other similar countries in Europe and elsewhere in promoting their countries overseas?
  (Mr Quarmby) In a normal year—and 2001-02 was not a normal year for reasons we know well—we have £35-£36 million. To that we would normally add perhaps up to £15 million of partner funding from companies, regions, local government, area tourist boards in Scotland, who come alongside us for our marketing activities overseas, giving us total disposable funds with our partners of about £50 million in a normal year. I do not have immediately to hand, but we can let the Committee know in writing afterwards, the exact amounts made available to other national tourist offices, but we do not have many grounds for complaint. There is no similar national tourist office which spends more than we do and certainly France and Spain have similar amounts, I believe.
  (Mr Donoghue) In your inquiry last year the Committee noted the fact that the grant to BTA has been standing still for about five years and you noted that with regret. You also noted something you had identified a couple of years previously, that some of the domestic marketing budgets for some of the North American states were in some instances two to three times larger than the amount for the whole of the promotional budget of the United Kingdom. You also noted that with regret. We share that regret and one of the things we are keen to do is to make sure that even though we cannot outspend our competition overseas, we can out-think them. It means that we have to work harder for the same kind of results. For example, the New Zealand Tourist Board, which is a very successful tourist board on the global stage, achieves 85 per cent of all of its inbound tourists from just four markets. We achieve 85 per cent from 27 countries, therefore we have to work harder to get those people into Britain to achieve the same income generation. One of the interesting things here, looking at the overall balance of payment deficit, is to try to close that gap as quickly as possible. Some of that can be done by encouraging British people to holiday at home, but some of that will inevitably mean spending more on getting people over here.

  44. That seems to be in direct conflict with what the chairman has just said. You said you had to work harder to achieve that same input. You have compared it with states in the United States, yet the chairman says he is very satisfied with the amount of money he has.
  (Mr Quarmby) For me the test is how the Government responded during the crisis year 2001-02. The Committee will be aware that the first tranche of money happened within days when my colleagues appeared before you in April last year. Government made available an additional £14 million to fight the foot and mouth crisis and then made available on a matching fund basis a further £20 million in February of this year and the industry was able to match that and they exceeded it. So for the last several months we have been running with the industry a £45 million campaign overseas to get people back to Britain. I believe that has demonstrated the Government commitment to promoting inbound tourism to this country and I am very satisfied with that.


  45. I am the last person in this room, possibly the last person in the world, to criticise the Government, but a response to a crisis is very different indeed from a long-term strategy. When this Select Committee last visited the United States on a major tourism inquiry, we discovered that the British Tourist Authority had less money to spend in promoting tourism in the whole of the Americas than was spent by the State of Virginia.
  (Mr Quarmby) That indeed was illustrated by my colleague; that is perfectly true.

Mr Flook

  46. I hope you will agree that the top hotels in this country are very important in drawing in tourists from abroad. You may or may not know, but we have had a flurry of letters to the Committee from some of Britain's hoteliers, begun by Mr Skan of the extremely well renowned Chewton Glen Hotel. From my previous background I would accept that PR and marketing are a very important third party endorsement. On the basis that these hoteliers are not normally renowned for being shy and retiring, why was it that nobody knew who you were, Mr Quarmby? When 50 of the top hoteliers in the land were present at a meeting in London a question was put: what is the name of the current chairman of the BTA? Mr Skan writes that no-one knew.
  (Mr Quarmby) I have no idea. You had better ask them. The organisation does not exist to put me up front. The organisation exists to promote Britain and for me that is the test of our effectiveness.

  47. Mr Skan's letter also goes on to say that there is a large element of bureaucracy and mediocrity within the BTA. To what extent do you agree with him?
  (Mr Quarmby) It is difficult for anybody who is responsible for an organisation to have the perspective of somebody looking in. What I can reference is the quinquennial review which the Government carried out of the BTA, which reported in the summer of last year, which was on the whole pretty complimentary about our efficiency, about our effectiveness and that was not just based on their judgement but based on an extensive trawl which they made of a wider range of our stakeholders. We also monitor the opinions and attitudes of our stakeholders to the BTA on a fairly regular basis and where there are deficiencies, we address them. My reading is that on the whole our stakeholders, whether they are our partner tourist boards, whether they are the industry here in the UK, whether they are the industry overseas, are reasonably satisfied with the service the BTA provides. We can always do better and if anybody has any specific complaints about us, of course we must attend to that.

  48. I hear what you are saying, yet one of the other missives we have had is from Kit Chapman at the Castle Hotel in Taunton. As we all know, he is not a shy or retiring individual, though I must declare an interest in that he is a good friend and the Castle is an excellent hotel with a first-class restaurant. I am sorry to say that most of these letters do address the new BTA chairman with the new proposed arrangements. Mr Chapman writes that the new chairman needs to be perceived as an international super host, a roving ambassador with a passion for Britain and an ability to communicate a vision and a mood which is uniquely British. It seems to me that he is really referencing back to what is going on at the moment, so it is hardly a ringing endorsement for what is going on with the British Tourist Authority as it stands at the moment.
  (Mr Donoghue) I do believe that is an unfair assessment. We believe that our outcomes and outputs are much more important than some PR stories. For example, we would far prefer the British industry to know that for every one pound spent of taxpayers' money in BTA we return £28 back to the industry, of which £5 goes back to the Exchequer. That is a return on investment for the taxpayer which we think is far more important that a couple of comments from hotels, albeit excellent ones and albeit those hotels with which we would want to work in the future, but actually it is the outputs for the British economy which we think we should be measured by and which we can stand up and be proud of.
  (Mr Wright) May I add, as the new chief executive, that I disagree with some of the statements which you are reflecting there. First of all, I have visited many of our offices overseas and talked to much of the trade and the British Tourist Authority is highly respected, both overseas and in the British trade. You only have to look at the partnerships we have been managing in our Million Visitors Campaign this year which has 31 partners who together have contributed £5 million cash and £20 million of collateral to the joint campaign. The private sector would not invest that scale of money in a body they did not trust and have respect for.

  49. If we invest one pound and we get £28 back and we have a massive deficit with the rest of the world in terms of that, it must perhaps stand to reason that in France and Spain they get even more back for each of the euros they spend.
  (Mr Quarmby) It does not necessarily follow that it is to do with the effectiveness of the marketing activity.

  50. And effectiveness from the hoteliers—and you agreed with me that our hotels are important. They are finding that they are not being represented and they want a dynamism which is not there at the moment.
  (Mr Quarmby) I should like to feel that that is not a representative sample. From the evidence I get on the industry we deal with, of course there are going to be people who express some concern about what the BTA does or does not do for them. I do not believe that is a representative of the industry and I hope when you have representatives of the industry in front of you during the course of your inquiry, you will ask them the same questions. The point about the BTA is that our activity is most visible overseas. It is not really very visible to the UK at large or even to many of the industry. The test of our effectiveness should be on what we deliver for this country and how we are seen by the partners with whom we work most closely.

Rosemary McKenna

  51. When I read the statement, I was concerned that Scotland and Wales would be disadvantaged by the English Tourism Council being brought in under your umbrella. Having listened to the previous evidence and what you are saying, I actually think the opposite is the case. It is the English tourism industry which will be disadvantaged rather than the other way round. My original concern was that Scotland and Wales would be disadvantaged, but when I hear about the situation and I know how successful VisitScotland has been, despite a lot of criticism, not only within the industry but within the media in Scotland, how are you going to ensure that you look after the overarching remit you have and look after the English tourist industry.
  (Mr Quarmby) It is a key task of the board of the new organisation to ensure that it does the job for England. Tom Wright will be designing the organisation to ensure that both sets of objectives will be delivered.
  (Mr Wright) Absolutely. The industry partners who very much worked on the Blue Skies Group to develop a marketing remit for England welcomed the announcement which has been made. They are very supportive of what is happening. The second thing to say is that what the BTA does overseas is very much ring-fenced. Our new strategy is very much focused on the professionalism of our marketing around the world. We have a very successful track record in delivering the diversity of Britain around the world. We shall have a separate marketing unit to continue to focus on Britain, engaging with the nations and regions of Britain and we shall have an independent marketing unit doing the same for England, which can benefit from the economies of scale and the pre-existing specialism and understanding we have of Britain in England overseas. We produce an enormous amount of material which is also equally relevant to marketing England domestically. Scotland and Wales already use part of this material in their own domestic marketing and we can get the economies and benefits as a result of that.

  52. The budget will have to be there as well. You cannot do this on the existing budget. If you look at the budget in Scotland and how VisitScotland's website, again criticised but very successful, as has already been demonstrated. Incidentally, in Scotland we are about to launch a cultural portal which will link to the VisitScotland site which will be absolutely fantastic for people coming into Scotland and showing them just what is available. How can you do that with the kind of budget which is there at the moment?
  (Mr Quarmby) First of all I should like to agree with you that Scotland has been very successful and very effective in the development of their website and their strategy surrounding that. As you have heard, there is a similar strategy for England based on EnglandNet. It is a few years behind. It will be there. On the funding, we do not yet know what our baseline funding is going to be for 2003-04, but we hope that the Secretary of State will be advising us and parliament shortly and perhaps that is something you might be wishing to press the Secretary of State on when you meet her. Until we know that and the two distinct funding streams for overseas, for Britain and domestic for England, I cannot really answer your question. All we do have to go on is that in the Secretary of State's statement last week she did say that she was announcing additional funding for tourism services in England of £10 million over three years, which will be made available on certain conditions to be satisfied. We do not have the overall picture yet.
  (Mr Donoghue) The last time we appeared before this Committee, we called for additional resources and within four days we got £14 million. That was one of the reasons why we were most keen to take up your invitation today, to try to get that same sort of clarity and speedy efficiency.

  53. The English Tourism Council mentioned staff and young people leaving the industry, bright, intelligent, enthusiastic young people who are leaving the industry. Do you have any idea how many? Why are they leaving and how can you retain them?
  (Mr Quarmby) I am afraid that sort of information is not something we specialise in. We have our own information on that, which we get through the English Tourism Council, the other national tourist boards and through the industry. We are a marketing organisation. Clearly we are concerned about the health of the product, but we look to others both to advise and take the initiatives on change and so on.

  54. It is a substantial issue.
  (Mr Quarmby) It is an important issue.

John Thurso

  55. I want to ask you specifically questions regarding devolution, but in view of some of what has been said, I should like to make two brief points. One is regarding all my very good friends who have written to this Committee about the future chairmanship of the BTA, I suspect very prompted. What I should like to say is that I do not think on this occasion that their views are representative of the industry. I think the vast bulk of the industry that I know feel that the BTA have done a very good job in difficult circumstances and the difficult circumstances particularly are lack of money and the difficult structures. Much as I love Kit and Martin and Albert and Michel and all the rest of them. on this occasion I think they are wrong. Having said that, you will not now mind if I congratulate you warmly on the script you read out, but say I think it is one of the biggest bits of bovine scatology I have ever listened to. May I bring you back to overseas representation and the devolution settlement? Under the devolution settlement tourism is a wholly devolved matter, therefore it rests entirely with Scotland and Wales and therefore by inference it is devolved in England. The marketing of the United Kingdom overseas, which is what the BTA does, could easily be done either by one body for the whole country or it could be done by each of the nations who might then come together. There are many people in the industry who feel that the tourism devolution was simply wrong and it is better to have a UK body, end of story. That is not the reality we deal with. We deal with the reality of devolution, which, for the avoidance of doubt, is something I support. The point really which I should like you to address is this. Is it not always going to be impossible to have one body which is charged with bringing together three separate nations with three separate viewpoints whilst at the same time asking that same body to be one of the constituent players in that and responsible for a very partisan marketing campaign with the other two being their direct and biggest competitors.
  (Mr Quarmby) Let me take those points in turn. First of all, whether a body is constituted exactly the same way that the BTA is or whether it is constituted in some other way, I have no doubt whatsoever that Britain and Britain's tourism industry benefits by having one representative organisation overseas rather than three. First of all, when the visitors visit this country, only a proportion of them only visit a part. We know, for example, that half the visitors to Scotland actually visit England along the way. Of the half who only go to Scotland, half of them come into English airports anyway. The market expects to be able to relate to one organisation. What we are doing in a new part of our strategy is giving a much more distinctive branding to the nations and the regions of this country because they represent different things, different values, different experiences and it is to the advantage of all of them that we make more of how Scotland is different from Wales, is different from England, is different from London. I have no doubt that there is a huge benefit in having one organisation. The question is then: can that organisation still continue to be as effective—and thank you for your compliments—when it is given an additional task of domestic marketing in England? My belief is that it can. Tom has already explained how there will be two quite distinct marketing functions, there will be a certain number of common services which will support both activities. I foresee no fundamental problems in developing two quite different strategies for the two different tasks which the organisation is there to pursue.

  56. May I pursue you on that? Your submission, rather like the ETC's, has made it very plain that what they recommended was something completely different. I understand you made exactly the same recommendation.
  (Mr Quarmby) We did; we have.

  57. This was not something you would have wished, had you been in charge of it. Moving on from that, you have two strategies, you have two ring-fenced income streams, you have two completely separate sets of marketing people and just a tiny little bit of common support. It does not take a great deal of wit to say that you actually have two organisations but you have stuck them under one umbrella and you have a few back of house which are common. Why on earth is it that the politicians in charge of tourism simply cannot understand that what we need is two organisations and two organisations in name? We have that in everything but name. Why do we not just have England and Britain and be done with it?
  (Mr Wright) It is worth touching a little bit on our overseas strategy and how well BTA already serves devolution. We have a tremendous professionalism in the way we market Britain around the world. We have a presence in 27 countries and we are expanding that in new countries like China, Malaysia, Poland and Korea. We offer that infrastructure to Scotland, Wales, England, London, the regions of England, to buy into and to focus our energies on those markets which are most appropriate for their particular nations. Our strategy is to increase that professionalism and in particular get closer to the customers around the world and develop relationships and help understand the lifestyles and the occasion that people travel around the world. Those skills, that understanding, that professionalism is equally applicable to England and there is a lot more in common than I think you suggest. Already the BTA and ETC share a lot of services, for example we have common data entry for some of our websites and internet, we have continental services, we are in the same building. This is more logical than perhaps it would look from afar and it allows us to fast track all BTA's marketing professionalism and marketing skills to get England up and running very quickly and not in any way damage the diversity of Britain around the world, but to balance Scotland and Wales in the way we market overseas and bring our marketing skills and professionalism to get a really good job done.

  John Thurso: May I just challenge you on that? I am not for a moment saying you do not do a great job for the devolved areas, although you sometimes miss out the top half of Scotland, but we have corresponded about that. The point is that what we all recognise is a great lack has been the fact that England has had no marketing. It is not that it has some, it has had none. There has been some regional marketing and it has been marketed overseas by BTA, but domestically, as a whole country, England has had zero. So everybody, for a year and a half, has been saying "Let's create it", Ministers, everybody. Now we are creating something, but we are not creating something for England, we are creating a new body which is half and half. We are then saying, "Oh, but we want something special for England, so we have a separate strategy on each side, we have a separate budget on each side". It is two organisations, but it has been pushed together. If you look at the core competences of any business and you are a modern manager, you say, "What do I do? What is my core competence?" and you may well share your back of house admin, you may well share your building, but the one thing you do which makes you a unique business is your core competence. The core competence of one of these two bits of the new body is to prosecute the domestic marketing of England and the other bit is to market the United Kingdom overseas. You have admitted through everything in your evidence, the statement and what you will design which you have not got round to yet, that there will be two separate strategies, two organisations and some back of house commonality. It is the only way you can make it work but why can we not have two organisations in one building, two organisations with the same back of house and just be done with it?

  Chairman: I am going to take that as a statement rather than a question so that I can move on; an extremely pungent statement actually.

Derek Wyatt

  58. May I concur with my colleague? I also feel that this is a complete Horlicks of an approach to tourism in the United Kingdom. I am going to try not to make a statement. If you live outside this country, you either call this country the United Kingdom, Great Britain, Great Britain and Northern Ireland, England, Wales or Scotland, or something called the regions. When I was in California last week, five RDAs have five separate offices and they are going to represent an element of tourism. Forgive me, but this is rubbish. I know they are going to represent it here, but they will want to represent it over there. It is nuts. Nobody understands this overseas. It is crackers. It is the wrong way to do it. We have another thing called the British Council. The British Council represents us culturally overseas. It has 106 offices. So why do we have a BTA with 26, or whatever you have, not working in tandem; not just not working, but actually being part of the British Council? It seems to me you have an absolute mess and muddle about what this country is overseas. It is good we have this inquiry, because frankly the decision last week will have to be revisited. Let me just ask one question. Given that most MPs in England cannot stand their regional development agencies and when they have a crisis, as I did recently with my steel workers, the first person you pick up the phone to is not the chief executive of your RDA, it is the Minister responsible for manufacturing, it is a bad decision to push the RDA into travel and tourism. What is your comment on that?
  (Mr Quarmby) My first comment is that if the RDAs choose to establish offices overseas to promote investment and economic development that is entirely up to them and within their ability to do so. I do not support the RDAs having an independent tourism promotion activity overseas and I very much hope that that will not develop, indeed Alan Britten and I are meeting shortly with the lead chairman of the RDAs who looks after tourism and we shall be seeking to persuade him that that is neither in the interests of their regions nor in the interests of the country as a whole.

  59. It is in the interests of their region. If it is the fifth largest business and within their remit, they have to take it.
  (Mr Quarmby) With respect, it is not in the interests of their region to seek to promote their tourism independently of the BTA. That is a strong statement and it is one which I believe. As a parallel to that, going back to Wales and Scotland, we have offered and when I am in Edinburgh tomorrow I shall be re-offering to the administration there, desks in BTA offices around the world where we should be pleased to welcome representatives of VisitScotland or the Wales Tourist Board to sit, as they have in the past, and work with BTA, using BTA's infrastructure to promote their nation, or in the case of the regions their regions.
  (Mr Wright) We do work very closely with the British Council, indeed there is a public diplomacy board which I am part of which is chaired by the FCO and we meet and we look at how we work collectively and how we promote Britain's best interests around the world and we do indeed use some British Council offices to help promote Britain. They clearly are looking at playing a different part. We are looking at bringing tourists in, they are looking at education and culture and other aspects. However, collectively we are working together and using our resources to better the promotion of Britain in a number of different ways.

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