House of Commons - Culture, Media and Sport

Select Committee on Culture, Media and Sport Fourth Report

UNRESOLVED ISSUES AND AREAS IN NEED OF ATTENTION

58. The Secretary of State claims that the new arrangements will take account of the devolution settlement fully by working in close collaboration with the Welsh and Scottish tourist boards.[132] The Committee welcomes this collaboration but questions why these bodies were not included in the consultation process. It concerns us that the merger of the BTA and ETC will compromise the devolution settlement and cause the nations to compete for business rather than co-operate to increase tourism earnings for Britain. ABTA said of the English regional tourist bodies that "The competitive nature of these bodies is likely to undermine their ability to deliver a consistent and national approach".[133] The Committee feels this concern could be applied to the UK as a whole. Devolution seems to be encouraging competition between constituent nations regarding tourism, instead of co-operation and a UK-wide approach to attracting visitors.

Quality of accommodation and product

59. With the introduction of the Fitness for Purpose scheme, in 2002, DCMS is making important steps towards tackling the standard of accommodation quality, which has been a problem for the industry for many years. We welcome this step and recommend further attention in this area. However, Mr Reynolds from the Tourism Alliance and ABTA pointed out that "statutory regulation alone does not necessarily improve quality, and unless there are clearly marked steps and hurdles" implementation may not be effective.[134] It is also necessary to make sure that schemes such as Fitness for Purpose[135], Stepping Stones Programme[136] and Best Practise Forums[137] are properly established to allow those who do not meet quality requirements to reach the targets set.[138] There is a need for statutory registration of accommodation providers and, notwithstanding the devolution settlement, for this to be uniform throughout the UK .[139]

VAT and regulations

60. Many stakeholders highlighted to us in their evidence the burden of comparatively high levels of VAT and the effect this has on the competitiveness of tourist businesses compared to their European rivals.[140] After Denmark the UK is the member of the European Union with the highest VAT rates, which add to the cost for tourists and reduce our competitiveness.[141] France has VAT on hotels set at just 5.5%.[142] We recommend that the Department seeks a review of VAT levels on accommodation within Britain.

61. The Tourism Alliance called for reduction of regulation and claimed an excessive burden on small businesses in the sector. The Committee welcomes the recent announcements by the Secretary of State proposing to lighten the regulation burden where businesses are complying and quality is rising.[143]

Data collection and collation

62. In order for Britain to remain amongst the top tourist destinations in the world and to cut the balance of payments deficit, which is a key priority for DCMS[144], it is extremely important to increase and improve data collection, collation and dissemination within the sector. The British Institute of Innkeepers in their evidence call for a "centralised information source" to help their members.[145] South West Tourism identify "market intelligence and research" as an issue which needs consideration[146], the fragmentation and diversity of the industry being a disadvantage.

63. The multiplicity of channels through which to receive help, available to businesses during FMD, was confusing to many and so uncoordinated that many did not receive the help they needed. There are too many organisations wishing to emphasise their existence by taking action which is often conflicting and may actually damage the effort to send a coherent message. It is to be hoped that the new body will be able to tackle the need for information throughout England and the UK, giving up-to-the-minute customer and product information so that businesses can provide for the ever-changing market and compete on an international scale. The further development of e-tourism will not only aid the dissemination of information through the EnglandNet project[147], but also cater for the market so that consumers can book on-line.[148]

Profile of tourism within Government

64. During this inquiry there were calls especially from the Tourism Alliance and its members, for tourism to be represented by a cabinet post.[149] It is the view of many in the sector that tourism is not high enough on the Government agenda, that more ought to be done by DCMS for tourism[150] and that tourism is only one of six key responsibilities held by Dr Kim Howells MP.[151]

65. There is much debate within the sector over where the responsibility for tourism should lie within Government. Some feel the needs of the sector would be better catered for under the DTI, though Dr Howells stressed the link between tourism and cultural attractions of Britain and felt that tourism should remain the responsibility of DCMS.[152] We believe that there should be a major rearrangement of Government departments in order to accommodate the needs of the tourism sector so that they do not get lost in the at present oversized DTI but also should not be stranded as the cinderella of Government within DCMS. Tourism needs a proper commitment from the Government commensurate with its economic importance to the country.

66. We heard considerable evidence that London dominates overseas tourism to the UK, attracting and retaining the majority of visitors, many of whom never step outside the capital. A vital aspect of Government support for the industry must be the wider encouragement of visitors to delve deeper and more widely into the rest of the UK. It must also involve enabling visitors to explore alternative styles of UK holidays and discover unexposed places. This issue is nowhere more important than in using tourism as a powerful means of economic regeneration.

A single voice

67. The combined crises exposed many of the weaknesses within the tourism sector, especially the lack of a single voice to represent the industry to Government, as was identified by the Committee in their report 'Tourism—The Hidden Giant—And Foot and Mouth'.[153] Other areas of concern were raised, such as accommodation quality and standards, lack of development of e-tourism, bad information collection and collation, the need for training and skills development, and especially the absence of a marketing function for England. It was seen by all outside Government who gave evidence to the inquiry that these problems needed to be tackled in order to maximise the potential of this key growth industry. Tourism must be a priority for the Government. It is one of Britain's largest and fastest growing industries and it should be treated as such.

68. The Tourism Alliance was set up in the wake of the FMD crisis in order to provide the tourist industry with a single representative with whom DCMS could liaise. This has been widely welcomed by the sector as a positive move away from the fragmentation and confusion experienced during FMD.[154]

69. Although DCMS specifically requested the Tourism Alliance to be formed during the process leading to the announcement of a new organisation of tourist support in England, "the Alliance itself was not particularly consulted".[155] Concerns were raised by the Alliance, not about their access to representatives of the department but about the department listening to their recommendations and concerns. We have concerns about the agenda of the Alliance and especially the lack of coherence in views it was able to present to us as the industry representative. However, the organisation is young and has yet to establish itself. We welcome the establishment of this single voice, but feel the industry must unite behind it and the Government must listen to it. We recommend that during a consultation process concerning changes to the tourism structure, DCMS should not ingore the body which had been set up specifically at its own request to liaise with Government as the industry representative.

Training and employment

70. We welcome the encouraging news concerning the establishment of a Sector Skills Council (SSC) for leisure and tourism as outlined by the Secretary of State in her oral evidence to the Committee. This is an important step towards increasing the education available to those employed in the sector. The Hilton Group, a large tourist business, identify the skills shortage within the sector that many businesses experience and able to provide training for their employees independently.[156] The small businesses dominating the sector are usually unable to provide training for their employees. The potential for young people to establish a career within the sector has been improved, but the industry must continue to tackle this structural weakness through the development of the SSC. [157]

Funding

71. There have been no announcements, as yet, presenting the exact funding structure for the new body. The Secretary of State has expressed the desire of the Department for the new body to be a public-private partnership. Concerns have been raised by some large businesses in the sector[158] that basing the funding model on the Million Visitor Campaign (MVC) may not work. The MVC was implemented during a time of crisis for the industry when tourism was high on the Government agenda and when the industry was prepared to donate a lot to the campaign. Mr Quarmby, Chairman of the BTA, told us he believed that Government response to the crises was "£40 million to fight the Foot and Mouth crisis and then ... £20 million in February of this year".[159] It is a worry to the Committee and the industry that the impetus and funding will not be as readily available when the industry is not in actual crisis.

132 Q 144 Back

133 Ev 71 Back

134 Q 85 Back

135 'Fitness for Purpose' is an initiative announced by the Secretary of State and industry leaders in October 2001. It is a scheme aimed to increase tourism quality including: food hygiene, health and safety, trading standards and fire safety. Support will be offered in these areas to those not presently meeting set standards in order to improve the service given to tourists and visitors. (DCMS press release 26 Nov 2002) Back

136 Ev 142 Back

137 Ibid Back

138 Q 85 [Mr Reynolds] Back

139 The 1969 Act provides for this at the discretion of Ministers therefore primary legislation is not necessary for such a scheme to be implemented. Back

140 Ev 35 Back

141 Q 127 Back

142 Ev 141 Back

143 See DCMS Press Release, 26 November 2002: 'Jowell welcomes moves to stamp out shabby hotels and restaurants' Back