TUESDAY 26 NOVEMBER 2002

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Members present:

Mr Gerald Kaufman, in the Chair
Mr Frank Doran
Michael Fabricant
Mr Adrian Flook
Alan Keen
Rosemary McKenna
John Thurso
Derek Wyatt

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Memorandum submitted by Scottish Tourism Forum

Examination of Witnesses

MR ANDREW MATHIESON, Chairman, MR IVAN BROUSSINE, Chief Executive, MR PETER J TAYLOR, Director, Scottish Tourism Forum, examined.

Chairman

Gentlemen, thank you very much indeed for coming. I am sorry for the slight delay but we were just sorting out some domestic matters. I wonder if, since it is the first time we have met, you would like to make an introductory statement?

(Mr Mathieson) Yes, good morning, Chairman, thank you. I am Andrew Mathieson, I am Chairman of the Scottish Tourism Forum. I think some of you may know my background, you have a brief resume of my CV, but very briefly the Scottish Tourism Forum stands as the voice of Scottish tourism as a trade body. Could I, on my right, introduce my Chief Executive, Mr Ivan Broussine, and, on my left, my Deputy Chairman, Peter Taylor, who is Chairman of the Townhouse Group in Edinburgh and, also, happens to be the Chairman of the national BHA.

Chairman: Thank you very much indeed.

John Thurso

Good morning. Subsequent to your original submission to the Committee, the Department of Culture, Media and Sport has announced some very radical changes for tourism in England, which obviously impacts on Scotland via the BTA. As you have just said, you represent a pretty wide cross-section of the tourism industry in Scotland and I know that you have undertaken a consultation of your membership subsequent to those changes being announced, largely because I was one of the recipients of the e-mail. Could you tell the Committee what response you have had to that consultation?

(Mr Mathieson) Thank you. I can tell you that about two-thirds of the respondents highlighted the risks or at least the perceived risks to Scotland, in that the overseas marketing for Scotland may be weakened, whilst about one-third suggested that Scotland should actually go it alone with an increased overseas presence in our main markets. I have to say that anecdotally and in addition to the formal request for information and people= s feelings, it would appear that the trade accept that it is a fait accompli as to what has happened. We, as a forum, accept that that is now the situation and we must work within the framework which was presented to us, and I do not think any one would have expected, nor preferred, the outcome of the minister= s deliberations. I think that overall people would have preferred Scotland and the BTA to have worked along similar lines to how they have in the past, without perhaps what is seen as the encumbrance of the amalgamation of the two organisations. Notwithstanding that, we in the Scottish Tourism Forum are looking positively to the future and our job is to make sure that this reorganisation will not see Scotland at a disadvantage.

You have said that as far as you are concerned it is a fait accompli and, therefore, cannot be changed. Leaving that aside, bearing in mind that ministers are responsible to Parliament and Parliament may indicate that it does not regard it as a fait accompli, if you had the opportunity to modify that settlement, how would you like to see it modified?

(Mr Mathieson) Perhaps I can ask Peter Taylor to respond.

(Mr Taylor) First of all, I should say that I am in a slightly difficult situation (as I have found myself before) because I am a UK Chairman of BHA which has, in general terms, welcomed the statement. I think, frankly, in any organisation there is always a wide range of views from memberships, but today I am wearing my Scottish hat and, as Andrew has said, it is up to us to make it work. There is a certain advantage in what we have got because we are not starting from scratch with a fresh organisation recruiting a team. So there is a lot of expertise there that can be moved and, indeed, in many markets they are working towards the same end. Our concern from Scotland= s point of view is that we actually make sure that there are targets set and that BTA deliver separately to Scotland tourist targets. As to exactly what we would have suggested as an ideal, I am not sure. It is a difficult one.

You see the danger, which is that you are accused of saying you do not really like it but you will accept it, but what you are also saying is you have not got a preference that you would put in its place. There is a danger that you could be accused of just being pro-Scottish for the sake of it.

(Mr Taylor) Wearing a Scottish hat, yes. Scotland has more of a brand and has more of an essence or perceived brand and essence. I think England - and I happen to be English - really needs to work up that brand and that essence for themselves and to work towards products rather than regions, in my book, as far as marketing is concerned.

Really, given that in your evidence you stated very clearly the benefits of devolution - and I think nobody would gainsay that tourism has benefited hugely in Scotland from the devolution settlement - is it not fair to say that actually the real danger that you are highlighting, particularly with your comments about England needing a brand, is that England actually has a great need for domestic marketing, which is coming through the new settlement, and that the danger that you perceive is therefore that in order to deliver that for England it begins to take away from the BTA overseas= effort?

(Mr Mathieson) There is the potential for that, and that is one of the chief concerns that the industry in Scotland has, in that the focus is taken away from Scotland. Whilst we understand the need for a focus within England and overseas, our perspective is that there are dangers there. We will want to see that the Scottish product is not harmed by this move. Undoubtedly there is the potential for that to happen.

My understanding is that the Scottish Executive have received assurances that there will be an exchange of letters on targets and all sorts of other things. Is not the real danger that the BTA will be so busy making sure it meets all its targets to satisfy us Scots and the Welsh that England, for whom this whole rearrangement has really been put in place, are going to be pretty stuffed?

(Mr Mathieson) We should be so lucky, I would say!

That is what you are hoping for! Can I move on to a slightly different line of questioning. There is each year, I think now it is in either its second or third glorious year, an annual tourism summit at which all the players involved in the administration of government and tourism meet. Clearly this is something which cuts into both the Scottish Executive and Visit Scotland. It is my understanding that no representative of any Scottish body has ever been to the tourism summit. Do you think that is appropriate, given what has actually happened?

(Mr Mathieson) I have to say I have little knowledge of the summit, for the very reason that nobody has been invited. I find it difficult to pass comment, really. I do not know, Ivan, if you have more knowledge than I on that?

(Mr Broussine) I think it is desperately important that the UK tourism summit meets regularly and there is good representation from across the UK. Further than that, and we make the point in our supplementary evidence, the opportunity is not only for the Wales Tourism Alliance and the English Tourism Alliance and the Scottish Tourism Forum - that is the trade - to meet across the UK but it is also an opportunity for the nearest parliamentary committees to meet as well to look at this across the UK. We have to recognise that whilst there are significant benefits of devolution, tourism in Scotland is impacted significantly and crucially by decisions made in London, and we have to find ways and mechanisms that ensure that those decisions acknowledge and respond across UK-wide issues. That is crucially important.

Effectively, what you are saying is that there is a slight mismatch or there is a mismatch between the devolution settlement and the ways in which the various devolved nations communicate at a UK level?

(Mr Broussine) I do not think you will draw me out on that, but I do not see it as a mismatch myself.

If it is working then clearly there is not a problem. If it is not working, which was the inference of what you were saying ----

(Mr Broussine) Devolution has been beneficial for Scottish business. What we are saying is there are still opportunities for enhanced cross-UK policy making and investment decisions by government that will impact beneficially across the UK as well. We can always make improvements on what we have got.

Do you feel that Scottish tourism businesses were adequately consulted with regard to what DCMS is proposing for the BTA?

(Mr Mathieson) No, because there was not any consultation.

There was none at all?

(Mr Mathieson) Not to my knowledge.

John Thurso: Thank you. Thank you, Chairman

Mr Doran

Back to the recent changes, or the announcement of changes, to the BTA. One of the recent things that has concerned us in some of the previous questioning that we have done is the apparent conflict of interest that the BTA will have, on the one hand, promoting Britain abroad, including Scotland and Wales, and England at home. How are you going to deal with that in terms of your presentation and your relations with BTA?

(Mr Mathieson) Traditionally our relationship with the BTA has been very positive. Indeed, industry relations with BTA have traditionally been very positive. I think I have already said that there is a perception now within the industry of dangers of that lack of focus on Scotland. We, as an organisation, would be very keen for - in practical terms, for instance - BTA to accept Visit Scotland to be much more proactive in the overseas market in a more direct way. One way forward on that, perhaps, would be for Visit Scotland to be sufficiently resourced to have a personal presence in certain key overseas offices, thereby actually ploughing the Scottish furrow deeper in those markets. We also accept, however, that Scotland cannot do that worldwide and there are emerging markets where it would be far better to allow the BTA to continue representing the nation. So there is a kind of halfway house there, and I think that our industry view on that is that the BTA has done a fair job but there are now dangers on the horizon and we have an opportunity perhaps to strengthen the Scottish presence. My colleagues and I would like to see part of that strengthening process going in making sure that Visit Scotland is there on the coalface abroad.

One of the difficulties, certainly from the English perspective, which we have heard on this Committee is what seems to be a gross mismatch in funding. I have got a paper in front of me from the Minister in Scotland, from whom we will hear later, and he talks about a budget of around , 90 million spent on tourism in Scotland, if you include the local authority budget, but in England the figure is about , 12 million. That does not take into account the Regional Development Agencies spend, but given that they are fairly new bodies they have not racked up their spending in this area. So we are talking about a fairly huge mismatch. It does look as though BTA is going to have to spend quite a bit of its time in the future sorting out that mismatch. That will be their focus and I do not buy the point that my colleague here, John Thurso, has made about the English suffering more than the Scots. Quite clearly, in terms of the focus and the development of their strategy, the BTA is going to have to look very hard at England. That seems to be in accord with what you are saying, that we may see a problem developing in Scotland. If the only way to deal with that is the solution you presented, which is more resources, then do you think it is likely that the Executive will find these resources for you?

(Mr Mathieson) Of course, that is for the Executive to decide, but the argument ----

They are already - in the Minister= s statement - investing very heavily in the industry.

(Mr Mathieson) Indeed, but it may not even be a question of more resource in total but it may be a use of resource in a different way.

Does your organisation and the members of your organisation contribute to Visit Scotland= s presence abroad or is that purely funded by Government?

(Mr Mathieson) It is funded by Government but, of course, individual businesses can participate in overseas= marketing campaigns in a very direct way.

Moving on to another area, I am a real amateur when it comes to tourism and looking at the papers, particularly from the English end of the market, it seemed obvious to me that one of the things that was lacking was a proper strategy, and particularly a long-term strategy. When I read through your submissions and the various other Scottish bodies we will be seeing today, you seem to be a bit further advanced in developing a longer-term strategy. I am not looking to pick out comparisons, but I would be interested to hear from you the steps that you, the Executive and the other partners in tourism have taken to develop that strategy - if you agree with my point. What can we learn in the way in which you have done that?

(Mr Mathieson) I am going to ask Ivan to respond to that because Ivan has a unique overview, in fact, from an industry perspective on that particular matter.

(Mr Broussine) The last two or three years has seen quite a significant cultural change inside the tourism sector in Scotland, with industry being far more assertive about what it considers to be commercially desirable and advisable, from the point of view of what public sector investment and priority should be. So actually there has been a very strong development partnership between the public and private sectors. The current tourism framework, which is an articulation of the strategy and priorities in Scotland, has been developed with Visit Scotland in the lead, but actually I represented the industry and other industry representatives participated in the development of that strategy. So it is not as if it is just the Executive saying A This is where we are going@ ; nor is it Visit Scotland suggesting that; there has been actually quite a strong working-through of the various issues to identify the priorities for the industry. On top of that, in relation to the marketing priorities for Scotland, in terms of brand identity, in terms of products, in terms of the most desirable markets and so on, much of the expertise comes from Visit Scotland, but they rely very heavily upon commercial input. So the advances we have made, I think, are advances that emanate from very strong partnership working. It has been hard work and it has been tough work, and it has been quite aggressive at times but, ultimately, what we have is a far stronger and far more robust product and a far more robust opportunity as well.

Does it help that the industry has a seat at the Cabinet table?

(Mr Broussine) It does now, but there are mixed views about that in Scotland. There are many people who would suggest there is an advantage in being close to enterprise, or looking to the DTI for the whole of the UK. So there are mixed views about that, but I think, by and large, the Minister in Scotland has won plaudits from the industry for his energy and focus - and, indeed, financial commitment to marketing.

So partnership is very important. When we heard from your counterparts in England, The Tourism Alliance, most of their brief to us covered what you might call a business agenda. You give it passing reference. You mentioned VAT in the tourism industry and you mentioned some issues about red tape, whereas it seemed to be their whole focus. That was of some interest to me, in the way in which the case was presented. I would be interested to know why you take that focus as compared to what is effectively a business agenda from your colleagues in England?

(Mr Broussine) I do not want us to misrepresent ourselves in terms of our focus; our focus is certainly upon resources for marketing, overseas marketing and the capability and delivery of marketing on the consumer to the Scottish market. However, that is equalled by the business agenda as well. I have obviously got the wrong emphasis in this paper if you consider the business agenda to be just a passing reference, because those are crucial issues. Actually, from the point of view of Westminster and UK-wide policy and investment issues, they are crucial to the performance of the industry in Scotland - transport, fiscal policy, monetary policy, exchange rate policy and so forth. I think probably we have a balance, and I would like to think we have got that balance right between the effort in the marketing area and in the business agenda. DCMS decisions about ETC and about marketing England are the hardest issues in tourism in the UK. I am not surprised the English Tourism Alliance is focusing on the business agenda and what are the solutions for the English market. It is a really tough call and I do not envy anybody the decisions that need to be made there. However, it is crucial that the English marketing activity - and London= s capability as well, because London is important to Scotland - is resolved.

Derek Wyatt

Good morning. Can I pick up two things? Mr Taylor, you said something about you being worried that the regions in England do not either manifestly support tourism or that the development is going to upgrade the regions to make tourism happen, yet at the same time you are saying England needs a higher profile. Are you actually saying that we should not put tourism down to the regions first; we should actually spend five years getting the England brand correct before you put it down to the regions? Is that really what you are telling us?

(Mr Taylor) It is not for me to say how England should approach the marketing of England or identify what the brand is. My approach would be to build on the strengths, and particularly build on the gateways. London, as a gateway, needs significant central support. I think, for England, it may be just as much building on London as a gateway as all the regions fighting with each other for marketing spend. Certainly in Scotland we have moved more towards brands - experiential things - than the regional approach, and we are very excited about that .

Can I ask the Chief Executive: you may have seen the FT on Friday which carried a page of coruscating criticism of the DTI, saying it was a , 10 billion government department which did not support business. As you know, the CBI yesterday and today ... the evidence of that is coming out more and more. We are quite defensive.(?) We here are arguing that tourism is more DTI but if the DTI cannot deliver where should tourism fit into? I am talking of Scotland, really, just as much as England.

(Mr Broussine) I did suggest in response to Mr Doran that there is some debate about whether there should be a stand alone Cabinet level responsibility or integrated into enterprise or DTI. I think that is the baseline and I think if you go to the industry to get a view, you will not get a common view, quite frankly.

Chairman: Surely, Derek, before you go on, the situation in Scotland is different, and looking enviously through English eyes, far better in that they have much better funding than England has and they actually have a tourism minister.

Derek Wyatt

I do not dispute that. Can I come on to the point I have raised before, that there are 10 government organisations in America which do not report to Washington and there are 9 of those in California. Much of that is the Scottish Development Agency, the Welsh Development Agency, all our RDAs - this is a very confusing picture that we are giving to our would-be tourists overseas. Suddenly they are broken up into 19 different organisations in America that do not report back to Washington, and therefore do not report to our consulates and, therefore, do not report back to the Government in Scotland. This is very scary, because these things happen without any government knowledge. When I asked the DTI, on the Order Paper, that very question they said they were unaware of it. This has happened in the last 18 months. Do you think it would be better if there was one electronic gateway in America to tourism in the United Kingdom, or do you think you have got such a better brand you would rather go off and develop your brand - because it is a strong brand, much stronger than anything else? Are you worried about what is going on?

(Mr Broussine) I am not sure if there are 19 organisations in the States or a representative of Scotland because my understanding of the Scottish representation overseas is that the government agency Scottish Enterprise and its sister organisation Scottish Trade International (whatever they call it now) plus Visit Scotland, plus the BTA, are the only three organisations overseas in terms of Scotland, and the relationship between Visit Scotland and the BTA is a positive one and there should not be any tripping up over each other. Just to amplify it a little further, a single electronic gateway might sound very nice but in practice, actually, several electronic gateways might be required for different markets and different brands.

(Mr Mathieson) Could I add something, if I may? We always, as an industry, approach this from the consumer perspective. From the consumer perspective I would not necessarily agree that it is that confusing. You mentioned specifically the single electronic gateway. There are thousands of gateways but for true gateways we have the BTA, on to which I would like to see the Visit Scotland.com more closely integrated. I think, from a consumer point of view, it has to be as simple as possible, and I myself do not see a huge problem in that. I would like to see further integration between BTA and Visit Scotland.com.

In your travels do you think that tourism is handled better anywhere else in Europe or anywhere else in the world. As a forum is it better somewhere else?

(Mr Mathieson) I think there is evidence to suggest that certain elements of tourism are better both formulated and dissipated throughout the world in other areas. One could look at areas such as New Zealand who have done very well, and one could look at Ireland who, over the past five to eight years, have done particularly well. However, that is not necessarily across the board. There are things which Scotland has and things which Scotland does which are market-leading, without any doubt; our brand is known throughout the world and we have everything going for us. Certain things and how we handle them are particularly good. That is not to say that we cannot learn from others.

Chairman

Before I call Mr Fabricant, could I go a little further down the line of questioning that Mr Wyatt has embarked on? I suppose, really, if one knew - but does one know - the test of different structures in different countries is the success that they have in attracting visitors. Obviously, Scotland has got some very vivid brands, but to what extent does that attract visitors? If one is mentioning New Zealand, New Zealand is so remote from anywhere else that one would guess - I do not know - that it really has got to do very special things in order to attract tourists. I had the good fortune to go there and it is extremely beautiful, but it is quite difficult and quite costly to get there.

(Mr Mathieson) Yes, I think you are absolutely right. What these countries have done is something we must do more coherently in the UK and, in particular, in Scotland, which is to focus on the brand and consistently, over a period of years, say the same things over and over again - thereby helping to build that brand. If you ask anyone in the world, taking New Zealand, what does it stand for, they will say A activities and the great outdoors@ . They have consistently said that for years now and it begins to take effect. What we must not do is fragment what we have in the UK at the expense of the UK plc income to tourism. Notwithstanding that, Scotland has the strongest brand, if you like, within the UK in worldwide terms, and we have got to focus on that.

In the end, one can try to brand oneself but one has to live with other people= s perceptions of one. I suppose if people abroad are thinking of Scotland then they will think of tartan, kilts, Highlands and whisky. Whatever you do, that is what they are going to think about, are they not?

(Mr Mathieson) They are the core values, certainly, yes.

John Thurso: And shortbread.

Michael Fabricant

Every year I do the three peaks. It is a desperate attempt to convince myself I am still fit and young. This year I ended up, as ever, in Ben Nevis but then took a holiday for a week in Scotland. It was great: I went to Skye, the Outer Hebrides, North of Scotland and Cape Wrath. I almost visited John Thurso, but he managed to escape! As far as websites are concerned, I just used the search engine Google and said A Hotels Stornaway@ and had no problems at all in finding places to stay. So well done on that. I am just curious about the whole philosophy of marketing a country like Scotland. Earlier on you said that really we should be marketing products rather than regions. It occurs to me, can one successfully market Scotland other than to nearby countries such as Scandinavia or Northern Europe? My first question is this: in the past in this inquiry we have been hearing that the great difficulty is getting people out of London to visit regions in the UK. What percentage of distant visitors - by that I mean North America or Italy or Spain; places that are not that easily get-at-able to Scotland - come exclusively to Scotland as opposed to, say, coming to London and England first and then continuing to visit Scotland?

(Mr Mathieson) I think, without question, the majority will come to visit London first and then England. Some will come directly to Scotland but the majority will come via England, which is why the Scottish Tourism Forum recognise the value of London, in particular, as a gateway to the whole of the UK.

That is interesting because that is what, intuitively, I would have thought, too. In that case (and obviously one wants to preserve devolution and all the rest of it) would not a more integrated marketing of the United Kingdom be more successful, not just talking about those things that the Chairman talked about, which people identify as being Scotland, but specific things within Scotland - Edinburgh Castle and whatever, Pitlochry, Cape Wrath, Thurso and all the other marvellous parts of Scotland - as being alternative places to Stratford-upon-Avon and the rest of it to visit, as part of the United Kingdom as a whole?

(Mr Mathieson) Absolutely. That is, indeed, what the BTA remit is; it is to market Scotland overseas. There are icons within Scotland which are very useful to the whole of the UK. Of course, we, on a stand-alone basis, would be delighted to see more people coming directly to Scotland. Part of the product portfolio is to excite those overseas visitors to come directly to Scotland, but the fact is that in gateway terms the majority will come via England. I think we have to accept that.

While I welcome devolution, as I think it was going to be an inevitable thing, I am not clear, given that answer, what impact devolution has really made in the promotion of Scotland per se as a marketing venue.

(Mr Mathieson) That is an interesting point. Peter, do you want to respond to that?

(Mr Taylor) I was going to talk about something slightly different. We have been talking on and off about the overseas market but for Scotland 90 per cent of our market is the UK. I guess therein lies the potential conflict with the BTA/ETC. I think you need to learn the detail of how that is going to work out.

I think we would like to know. I do not think they have worked it out yet.

(Mr Taylor) They can make it work but it is very important that we take our place in the UK marketing an alternative to other parts of the UK, and perhaps too much focus has been placed on the overseas market in our discussion this morning.

(Mr Broussine) Perhaps I could advise on the points made earlier by Andrew and Peter. Certainly the Scottish products and experienced have a brand recognition in certain markets. For instance, business tourism is worth a billion to us, 22-25 per cent or thereabouts of the value of tourism. Some of that business tourism product is in competition, for instance, with the NEC in Birmingham for international association business. Scotland has a pretty strong brand recognition in golf, for instance, in the business market of incentive travel and on packages to association business and so on. It would be sensible for us to continue to market ourselves for golf which, if it is in a hierarchy, is certainly at the top of that hierarchy for the UK. I do not know if our partners in Wales would disagree with that.

But is that not again what Andrew Mathieson was saying, that you are really marketing products rather than regions? That is perfectly acceptable; I think it is very logical actually, but you are marketing golf; you are not marketing Scotland. It just happens to be that there are pretty good golf courses, to say the least, in Scotland.

(Mr Broussine) For UK plc selling golf in Scotland adds the most value to the UK. It is a QED.

Alan Keen

You mentioned that devolution had been a help. Can you explain further how and will that relate to the English regions as they move towards devolution?

(Mr Mathieson) I think it is perceived as being a help. I think there is a A feel good@ factor that we have a Scottish Minister for Tourism sitting in Cabinet. The proof is in the pudding on that one. There are concerns which have been highlighted already, fiscal concerns, in that some of the focus may be rather lessened in financial terms for Scottish tourism being taken away from economic development, but in terms of the benefits, I think that the reality is that there is now a re-focus on Scotland= s largest industry, tourism. I think that it is appreciated, certainly by the Scottish tourism industry, that the Scottish Executive recognise that. There is now more focus on tourism, certainly in my 25 years of experience within the industry, than there ever has been, so that has to be a positive, but we are waiting for some further outcomes on that strategy to see what happens.

What are the trends for the future? Winter sports - is global warming damaging that or is it helping Scotland have a better image?

(Mr Mathieson) I do not think it is helping. Is that a loaded question?

No. I am just interested in what are the prospects for Scotland. Can I ask you about winter sports? Presumably it is a fairly small part of the total. Are you getting people from the rest of the UK to winter sport in Scotland?

(Mr Mathieson) Yes, and I think the largest market will be the Scottish market because the winter sports destinations are within reach on a daily basis. VisitScotland will have the figures; I do not. I do not believe that there is huge mileage in a lot of extra overnight or longer holiday stays for winter sports, specifically for skiing. There are so many destinations within relatively easy reach, especially with the onset of budget airlines in Europe now, that to get better snow people will tend to travel, but when the snow is good the skiing is excellent and it is there. It is a perfectly viable sport. The global warming issue actually is an issue. I can remember up to about five years ago, and Michael Fabricant mentioned Pitlochrie, that there was a huge interest within Pitlochrie to establish yet another ski slope within reach of that key hub for Scottish tourism. I think, frankly, thank goodness it did not happen because I do not think it is sustainable now through global warming.

In your association do you help very small businesses who want to improve their image, or maybe they do not want to improve it? Maybe they do not understand even that they can improve their image and benefit from this. How does your organisation help those people who want to improve?

(Mr Mathieson) I will ask Ivan to respond to that because it is largely an association membership that we have and perhaps he could elucidate a little.

(Mr Broussine) Without going into too much detail, I am very happy to do so. Our role is very much to represent industry views to government and to public agencies, but we also play an advocacy role back to the industry to remind businesses that the market is changing and there are certain opportunities here, there and everywhere and that opportunities to work with the local area tourist board are under VisitScotland, so a lot of the time there is communication back to the industry in order to elicit views back out and to give them additional information, and we are often working very closely with public agencies, Visit Scotland included, to remind business about how they might be improving their performance, where the new market opportunities might be, where the training courses are and so on.

Presumably you reach out to the businesses that do not exist as well. Are there links with the Scottish Government that you have? There must be missing links, so you are not just representing the businesses that are in your association?

(Mr Broussine) We have a particular focus upon product development and innovation, trying to identify where new markets might be, where the trends are taking us and what the new products and services and market opportunities might be. It is private sector led, a strong partnership grouping of companies working in that field. It is pretty embryonic at present but it is an interesting area for development.

Are there some gaps that you see there, in the organisation I mean, and in the promotion? Are there areas that you are talking to the Scottish Government about, getting them to look for and to put the opportunities there in front of businesses that do not exist at the moment? Are you helping to drive that forward or is that not your focus?

(Mr Broussine) I would like to think that we are a significant part of the equation in being able to say to industry from an industry and commercial base that X, Y and Z are desirable, and that that has quite a strong credibility. With the best will in the world if a public agency or indeed a government minister suggest that a market opportunity does exist then sometimes the reinforcement from the commercial sector, that endorsement from the private sector, is quite helpful in encouraging businesses to look at that as a real opportunity. Nobody does it on their own. We cannot over-emphasise the extent to which there is partnership working within the tourism sector. There is still a lot more to do but we have come a long way in quite a short period of time.

Chairman: Gentlemen, that was a most informative and useful session and we are very grateful to you. Thank you.

Memorandum submitted by VisitScotland

Examination of Witnesses

MR PETER LEDERER OBE, Chairman, and MR PHILIP RIDDLE, Chief Executive, Scottish Tourist Board (VisitScotland), examined.

Chairman

Good morning and welcome. I wonder if I could start by asking you how you think the new structure will work. It is obviously anomalous, is it not, in the sense that there you are, a free-standing organisation funded through devolution with a tourist minister whom we are looking forward to seeing later this morning, and yet you are also going to be represented by the BTA.? Could I ask quite bluntly, do you think it will work?

(Mr Lederer) I suppose we keep a watching brief. We certainly have concerns, as we stated before, about eye off the ball because inevitably when you put two organisations together, my experience of mergers is that unless you create a new organisation they tend not to work as well as they could, so we are keeping a very close watching brief on it. The other issue is, as you touched on earlier, how is England to be marketed in the future and using England as a brand? I do not care for the word A brand@ because my experience of brands is that a brand is not a brand unless you can control the product, which is an issue for all of us who are marketing a country. If we call it a brand then how we are going to develop what is this brand, England, or parts of it, is going to be critical. We need to keep a watching brief on how the BTA= s time is going to be spent to make sure that what our objectives are and how our strategy is being delivered overseas, which is our priority.

Again let me be blunt. The BTA= s job is to project the whole of the UK. No doubt it will do its very best to do that but at the same time, if it is projecting the whole of the UK, it is going to spend quite a lot of its time projecting England, Wales and Northern Ireland, inevitably, and that is what it is there for. That being so, would you feel that that set-up, which presumably is done in order to attract people coming to the country as a whole since London is the gateway, will give sufficient emphasis as far as Scotland is concerned, or do you believe that there may be a duplication of effort and perhaps an unnecessary expenditure of money too many ways?

(Mr Lederer) I do not think it is necessarily the best organisation. Not to have a separate England and a clearly identified England marketing body taking the biggest picture, looking at the UK, has got be a question in my mind. My concern is this eye off the ball. The BTA has an excellent reputation abroad and we should be careful not to damage that. We are also working in probably the most competitive industry in the world at the present with a huge growth potential of 4.5 per cent a year projected over the next 15 years. That level of scale of opportunity frankly over the next year, thinking about who is doing what and what is happening to whom, is a huge worry to me as an industry player, so I think we have got to get ourselves sorted out as quickly as possible. We have to make it work. The BTA has always done a good job and we have obviously challenged them and there is a tension in that relationship and that is healthy. We will always challenge them to make sure that Scotland is high on the agenda. We are fortunate, as you mentioned earlier, that the brand in Scotland is very strong and if you talk about the brands that are known overseas, they tend to be London, Scotland, and then you are getting into the Stratford-on-Avons and places like that. We should work on those strengths but that does not mean you do not also build up areas where you are weak. There is a big opportunity and we do not have too much time to spend sorting it out.

Do you think that there is a real problem with regard to projection of Scotland in particular, since we are meeting you today, and this is as it were a Scottish day, but also projecting Britain as a whole, namely that possibly the most effective way of attracting people is to play to outside perceptions and in many ways outside perceptions of this country are that it is quaint? The particular image of Britain is of processions, the Royal family, Wales, bards, - and we have a very prominent bard here today. I am not being frivolous about this. This country after all inherently, very much including Scotland, is a modern, up-to-date country leading the world in all kinds of developments and yet to a considerable degree that is not the way we are seen abroad and if we are going to attract visitors we have got to play to the perception rather than what may be the reality.

(Mr Riddle) That is very important but we must make sure that it is the consumer= s perception and not our perception. The point that Peter made and I would re-emphasise is that this is an intensely competitive industry. I was at the World Travel Market last week. There were 180 exhibitors there; that is 180 other countries and states competing with us for the world= s biggest and probably fastest-growing industry on this scale. We really have to be sharp and the essence of being sharp is to understand consumers and what they want and I think we do get distracted into what we think is right in terms of structures and also in what we sell. I think it is very important that we focus on what consumers want to buy and our organisation should be aligned to that and the way we market should be aligned to that. I will take slight exception, Mr Chairman, to characterising Scotland as just whisky and tourism and kilts and tartan. There are many markets out there and although those arguments are very strong and that is what we should deliver in those segments, there are a great many other segments because Scotland is appealing to completely different images and different activities and different needs and our job is to understand all of those segments and to deliver into each of those segments what the consumer really wants, the products on the ground.

Derek Wyatt

We have an institution called the British Council overseas. It has over 120 offices. Do you think it ought to have a tourist function?

(Mr Lederer) The strange thing about tourism is that it seems to be treated as a different industry. To me it is one of the many strong industries that this country has and should be treated accordingly. This is where the argument goes about whether the DTI or some other department is doing it in Scotland, why is it carved up. This is the argument about having a separate tourism minister. In terms of how we use the huge strengths we have got overseas, we should of course use as many of them as possible as long as it is done in a co-ordinated way. One of the issues about all of this discussion that does scare me a little bit is that we end up talking about structures and who is doing what and current organisations. If this was a commercial opportunity on the scale we think it is, tourism, as Phil has said, has huge potential. If we looked at this commercially we would say, A Where is the political will and where is the leadership that says that we want this industry to be 50 per cent bigger?@ , as we would in our own businesses, and to say, A How do we get to that point?@ We then put a strategy in place for, A We would like to get from here where we are today and we would like to be a play on this scale in ten years= time, 15 years= time@ , whatever. You put the strategy in place. You then think about what structure you put in place to support that strategy. We need to be careful that we do not end up talking about playing with the structures and not having a strategy and not actually having a goal that we are shooting for.

Do you think we have not got a strategy?

(Mr Lederer) For Scotland we now do have a strategy, a very clear strategy, and we are focused on it and it takes up our time every day of the week and that is how we spend our day. I would say that the UK needs to think about it as well. Where do you want this industry to be in ten years= time? There is huge potential. We are either going to maximise that potential or we are going to lose out.

My family had part of its holiday in Skye last year and we booked in via the brilliant website you have, so congratulations for that. We stayed in Flodigarry in the north east part of Skye. The disappointment was that we could not fly to the island. There was an airport before but if you look at the short-haul Easyjet, Ryanair phenomenon, it is going to the continent. It is not going to Scotland and it is not going to much of Ireland, even though Ryanair does some of that. Is there an airport strategy that you have put into the Green Paper that concludes on 30 November for the islands of Scotland?

(Mr Riddle) I do not think we should focus very specifically on the islands but we certainly do on transportation and access within which the islands are very significant. Scotland, especially nowadays, is very much a short break destination. One of the key elements of being successful as a short break destination is that you need good direct access. You get there, you do not want to mess about changing planes, and you want excellent convenient transport when you are there so that you can get about and not be stopping in one place and you can add value to your break. We have taken great pains to emphasise the need for this for tourism. We have in terms of continental access, for example, identified the routes we think are really important together with the Scottish Enterprise figures. It is no good just putting in lots more routes. If the routes are primarily dominated by outbound traffic then for our economy that is not very good so it is very important to identify the routes to generate income to Scotland from tourism. Better routes to the islands, undoubtedly we would favour. I am very pleased to see new competition on the Stornoway route is producing fares unheard of before and we hope to see that spreading.

We could not take a car on the railway anywhere. We used to. When I first went to Scotland 25 years ago you could take a car all over the place. The issue is that it is , 15 to go to Barcelona to watch Real Madrid at the weekend. I cannot get to Skye. I know it is apples and pears, but the issue is, if you want us to come there has to be a better way of coming.

(Mr Riddle) As I say, we are emphasising the access. I would say though that partly there is a psychological element on access that we have to get across, that we are tackling with our marketing, A Scotland is closer than you think@ , and there is a bridge to Skye now so you can drive there all the way.

Mr Bryant

How much work do you do on gathering the Scots diaspora? I lived in Argentina for a while in 1986 and there are five pipe bands in Buenos Aires, so there must be quite a lot of people all way round the world, some of them perhaps in seed markets, as you call them in your presentation. How much work do you do on that?

(Mr Lederer) Our strategy is very focused on the countries where we target our resources. Any marketing campaign has to be very targeted if it is going to work because you have got limited resources. However, there are a number of initiatives in Scotland in conjunction with Helen Liddell, the Friends of Scotland campaign and Global Scots, which is run by Scottish Enterprise and which has about 400 diaspora around the world, many in America at the moment but expanding into the Far East and other places. They are actively using those people both to help Scottish businesses abroad and to make contacts for people who are going there to develop business, whether that is us or the industry.

Genealogy is one of the most popular pastimes in the world. You have only got to go into any computer store to see how many different software programmes there are now. Do you do any work on trying to encourage the Government to put the registers of births, deaths and marriages on line and have a tourism connection into that on-line presence which would encourage people to come to Scotland?

(Mr Riddle) We are working very closely with the Registrar= s Office in offering a tourism product for people who want to trace their ancestors. It is a very interesting development because, while genealogy is now extremely popular, our challenge is to build a link between that interest and visiting Scotland. You could argue that having fantastic access on the internet precludes the need to visit. I do not think that is the case but that is the challenge. We have to make it very interesting for people to trace their roots but then to say,@ Now come and see them@ . We have to make that seamless link and to say, A It is easy to get here. Come and see the factory, see the housing@ . We have our own website, ancestralscotland.com, which we have launched in the UK, which we have launched in the United States and which very recently we have launched in Australia and New Zealand and that is the precise purpose of that. It is not a genealogical tour. It is a tour to take you from the genealogical research into a visit to your roots.

One of the issues that you raise in your submission is about the product and you point out that in recent years the volume and value of tourism in Scotland has declined from both domestic and overseas markets. I presume by A recent years@ you mean that this was starting before September 11 and foot and mouth and that the long term factors that affect that are perceived low levels of quality and value for money in some areas and sectors. What do you mean by that?

(Mr Lederer) There are two parts to that quality issue. The most important part in my mind is the people element of it, so in terms of the skills of the individuals in the industry and the commitment to training and development. The other part of it is the physical part. That does not just mean hotels. The judgement of quality in my mind is the warmth of the welcome and the professionalism of the people, value for money, and it ought to be spotlessly clean. Spotlessly clean means no litter at the airport or it means the roads are kept properly and of course it means that the hotel you check into is spotlessly clean and delivers the services. The people side I also think is key because people will forgive, if it is clean, the odd worn carpet or worn curtains. What we will not forgive is poor service or poor attitude.

One of the ways in which the Spanish tourism industry and the Government in Spain, tried to turn around their reputation for low levels of quality and value for money in some areas and sectors, and I guess one would mostly argue that they have succeeded in doing that, is their mandatory Lista de Reclamaciónes, their book that has to be available for complaints, and the fact that every complaint then has to go through to the local authority, so that there is quite a hefty penalty for poor service. Do you think that that is a model that would work in Britain?

(Mr Lederer) It is interesting that there is a debate just kicking off in Scotland at the moment about compulsory registration and the pros and cons of that and what does it mean. If we look at our competitors in places like Austria, where I was a couple of years ago at New Year, you cannot operate a business in our sector there without having the diploma on the wall. The diploma is not onerous but it means you have gone through the basics. If that is up-rating the skills of the management and leadership in the industry, that is great. If it is another policing service personally I am not for that. I do not think that will necessarily work. Part of this debate is looking at what other countries are doing and what has worked and what has not, again, all driven by the expectations of the consumer. If we think the consumer expectations in the last five years have been tough in the way they have accelerated, it is nothing to the next five and ten years. The more people travel the higher their expectations are going to be. If we do not meet those demands, whether it is in London or outside or in Scotland, then we will fail as a tourist destination however much we market it.

One final question about modern foreign languages. I presume that the industry needs people who speak modern foreign languages, and I do not just mean English. Are you confident that we are growing enough young people who are studying modern foreign languages to be able to service the industry in the future?

(Mr Lederer) I am not sure of the numbers but we certainly need them. Whether they come from this country or overseas, that is fine, but we do need people who are multilingual in this country if we are going to compete.

John Thurso

Can I go back first of all to something that you were talking about, which was basically strategy. I think it could be described as the long term nature of the investment necessary to build a brand over a number of years. It has been said here that one of the reasons why the Treasury will not give any more money to market England is that they have looked at the cost of Wales and Scotland and seen the results and decided it is not worth the investment. In your submission you said that the latest market information shows the decline of visitors to Scotland being slowly addressed. Could I ask you to talk about the long term nature of the investment that you are making and the point at which you will be able to demonstrate to the Treasury that the investment is paying off?

(Mr Lederer) It is long term. There is no question that since 1997 there has been a decline; there is no question in my mind that that can be arrested and turned around, and there is no question that we can do a lot better than we have done in the past, but that must be done in a different way than we have been doing it in the past. Part of this discussion that we are having is about the fact that we recognise the importance of the industry and what it can return. Secondly, in a way we have not been marketing it correctly. In our case marketing Dumfries and Galloway versus Caithness versus Angus does not make a lot of sense when most consumers cannot put them on a map. Thinking about how the consumer thinks and thinking about how they make their decisions and what they are looking for on holiday or a business trip, understanding that decision process before they make the decision is key. The way we have turned the organisation around and restructured the organisation and focused it means that we will be able to demonstrate success quite quickly. I would hope certainly that we will be back to the 1999/2000 levels and can demonstrate that in the next couple of years and then take it from there. There is no question in my mind that we had to make the huge changes that we made in VisitScotland. VisitScotland is a totally new, different organisation than it was two years ago. The thinking is different and I think the political will is starting to change as well, that this is an industry that, if we invest in it, will give a good return.

(Mr Riddle) There is sometimes perhaps slight confusion about brand marketing and product marketing, both of which we do, but they are different. It is very much the public sector= s responsibility to take the lead on brand marketing. That is creating the desire to come to the country. That is not an easy one to measure just in straight numbers because you are creating that desire and then on top of that you need a good product to deliver and you need ease of access to get to the country and that has to come from the industry. The measurement ultimately must take in the broad picture. That is not a public sector thing. It is primarily an industry thing. We must be delivering into an industry that is then enabled to generate increased wealth for the economy and, as Peter said, we believe that is happening now and it will continue to happen.

Clearly you have talked about coming at it from the consumer end. I assume that means undertaking research to find out what the consumer thinks. How much have you spent - just give me a rough idea - in terms of research over the last year or two?

(Mr Riddle) , 400,000.

So you have a budget of , 400,000 purely for consumer research?

(Mr Riddle) It covers all the research we do, which is primarily consumer research and marketing.

What is that research telling you? What are the main lessons you are getting out of that?

(Mr Riddle) The nature of the market, simple things. It has been proven by the research that it is a growing market with growing potential. For Scotland it is changing, increasingly going towards short breaks, increasingly going towards people who want a different sort of experience from a holiday. They do not just want to go to seasides or sit somewhere rather passively. They want to be involved in something, they want to learn something, they want culture, something like that. The increasing size of what we call the grey market, the more mature market, people who are active longer, who have more income to spend on additional holidays, is again very attracted to Scotland as a destination. There is an increasing significance of the business tourist market which is one that I do not think we have given enough emphasis to in the past. These trends are also becoming increasingly short term. Markets can change very quickly. People book late, people use the latest technology for information and for booking. Once upon a time people ordered their brochures in January and pored over them on the dining room table for a couple of weeks and chose their two-week holiday. That is not a core market for Scotland any more. It is about people thinking perhaps on Thursday night, A I deserve a treat. I think I will go for a short break to Skye@ , and hopefully they can get there by Friday night, have a n ice weekend and come back again fresh for work on Monday morning. That is the way we are moving.

Can I take you to a different subject which is back to the question of structure? I believe a body was created called Tourism UK which was the chairmen of the four nations= tourist boards who came together to a certain extent out of concern for what the BTA might or might not be doing. Can you amplify that for me?

(Mr Lederer) Suddenly we realised, sitting down at breakfast one morning, that the three then chairmen, Chairman of the BTB, the Chairman of the Wales Tourist Board and the Chairman of the Scottish Tourist Board, had never met, had never discussed anything and did we not think there were areas of common interest that we should be talking about, so that is actually how it started. Some of the things we started talking about were compulsory registration, the changing market place and so on, and as we all sit as ex-officio members on the BTA board the question of BTA does come up in conversation. It came up in that group and the frustration sometimes was that people heard a lot from industry about where was the input from the three organisations that were charged by government to bring this forward, to be advisers, if you like. The remit was to say, where are the areas of common interest in which we can help each other and move the agenda forward?

Mr Doran

Still on the BTA, you heard the Forum earlier and we have been listening to what you have been saying about the BTA. It seems that you are very pragmatic, that there is not any enthusiasm at all for the changes. Would that be a fair assessment of your position?

(Mr Lederer) Our position is that we want the BTA to continue to do a better and better job. We have a good relationship with the BTA. We think they can be doing more and we would like to work with them to do that. If they are going to be distracted for any period of time, which these things tend to do, we are worried. Equally, we are worried about what is the expectation in England of the BTA and how is that going to affect us? We have not seen the detail yet but we have got certain measures in place. We are concerned, I would say, and we are keeping a very watchful eye on it.

One of the issues is obviously the perceptions of this, and certainly we have heard worries expressed about the conflict of interest and the fact that the BTA has clearly an enormous job to do to get English tourism into a similar shape that Scottish tourism is in, so that is a distraction in itself. The perceptions in Scotland are at the moment as I see it fairly negative.

(Mr Lederer) The perceptions in Scotland are A wait and see@ . Yes, there is concern. It is unfortunate that the BTA has got a new chief executive, there is a new strategy. There has been a lot of excitement around that strategy; it is different thinking, it is thoughtful and it is well done. You are just about to launch into that and get it rolling and suddenly that chief executive and his senior team, which is very limited - it is a small team and this is not a big organisation - has suddenly got this enormous thing landed on his desk that they have now got to worry about. They will do a good job worrying about it but at what expense? That A at what expense@ is obviously a worry for us.

Can I move on to the issue of quality and skills? Clearly that is a priority in an industry which has a fairly poor track record, I think it is fair to say, on the skills side with among the lowest paid and least well trained workers in the country. Can you spell out how you see that strategy developing over the next few years?

(Mr Lederer) We have had a strategy going in Scotland for some time. I was the initial Chairman for something called Tourism Training in Scotland which did a lot of work on developing skills at what I call the lower end of the industry with people starting out in the industry and for a lot of the service jobs. We made quite a lot of progress with that, with things like Welcome Host and Scotland= s Best which were very good initiatives and worked well. Something like 70,000 people have been through Welcome Host, for example. The mistake we made and the mission I am on at the moment is that it is not them; it is the management and the leaders in the industry we need to get to, because if you train these very willing young people to try to do the job and you uprate their expectations and then you put them back into a poorly managed business, you have got a double negative in a way. You raise their expectations and they get hit when they get back. We have got to look at the management skills, the leadership skills of businesses in our industry because if you ask most people in our industry, A When was the last time you uprated your skills?@ , I think you would get some pretty frightening responses. That is an area I would like to focus on because that is the mistake we have made in the past, concentrating on the sharp end if you like, because it is the people running the businesses that we need to support and help and uprate their skills.

One of the issues there is obviously the way these people are rewarded for developing their skills. Is there a strategy there?

(Mr Lederer) There is quite a lot of work going on about it. It is about getting the message across to the right people. It is frustrating in a way that the industry will say every time that their most important strategic asset is their people, and then when you ask them, A How much do you invest in your most important strategic asset?@ , they cannot tell you. They can tell you how much they spend on marketing and how much they spend on maintenance down to the last penny, but ask them how much they spend on training and development and a lot of them cannot tell you. On the other hand a lot of them are very small businesses so they cannot just take a month out to go to INCEAD(?), as I was fortunate enough to do, and uprate their skills that way. We have got to manage those. It is horses for courses; probably small businesses can do some and larger businesses can do others, and is there any support for larger companies - I do not think there is - or is there any way that the large companies can help the smaller businesses?

Mentoring - is that the sort thing you had in mind?

(Mr Riddle) We do have a strategy on the theme that tourism is everyone= s business in Scotland. One of the things that holds back the development of skill is the status of the industry. It is not given the regard that it should have. This is the country= s most important industry. It needs to have that recognition in government and in the community at large, and that in turn attracts more people into the industry, attracts better people, attracts better investment into the industry and it raises the pride in being in the industry which I believe is one of the main things that will lead to better service and to people seeking to improve their skills. That is something that is everybody= s responsibility and that we have to get across.

I was interested in the points that Mr Riddle was making earlier about the branding and the kilts and tartan approach. I speak as a Scot who grew up in a Scotland where the kilt and the granny= s healing home type of culture was so alien to everything that I was interested in as a child that I must confess I have never worn a kilt and it is very unlikely that I will ever wear a kilt. Do you feel that you have a problem with the curmudgeons like me who feel an antipathy to that sort of Scottish culture?

(Mr Riddle) Not at all. One of the challenges we saw early on when we started talking about the Scottish brand was that we recognised that tourism in Scotland needs a very strong brand to differentiate itself in the market. Scotland is a very diverse country. It has fantastic things which are often quite diametrically opposed. We have very vibrant, strong cities, great night life, great modern culture, great history, very isolated places, people who want to go to islands where there is nothing else but birds. That is all part of that rich heritage of Scotland. We said, can we actually put on brand on that? We believe we can. We did a lot of research on that. It is about not focusing on the type of business, not focusing on pictures of a castle and the tartan. That is about the product marketing. It is about focusing on the underlying markets. What we found about Scotland was that the perceptions were that it is very enduring, it is very dramatic, and that is across everything, not just the scenery. The people are quite dramatic, the cities are quite dramatic, and it is very human. The people are interesting. If you put these elements together into brand positioning it is a very strong statement in the market that I think can embrace everybody= s interests in Scotland but, more importantly for us, a ver wide range of consumer interests.

Mr Fabricant

Earlier on the Scottish Tourism Forum were talking about the vast number of people who use London as a gateway for coming up to Scotland. How do you feel about that and is there anything you can do as an organisation, or indeed the Scottish Executive, to try and get, as I was calling them earlier on, distant visitors to visit Scotland, or maybe use Scotland as a gateway to visit England?

(Mr Riddle) As we mentioned, direct access is very high on our list of priorities. As Mr Taylor mentioned from the Tourism Forum, of course the first thing is direct access from our main market, which is England, and better access to Skye and better budget airline flights coming north, but beyond that we are definitely looking first of all at the most immediate countries around us. It is important to differentiate the routes because some routes are obviously likely to be a lot better for us in terms of net benefit to the economy than others, but we would certainly like to develop much stronger links with Scandinavia, with Germany, with Italy and with Spain. These are potentially very good markets for us. We like direct access because that is the only way we are going to get the short break.

Why did you pick on Italy and Spain? I can imagine Scandinavian countries but why Italy and Spain particularly?

(Mr Riddle) There is a great deal of interest in Spain in other cultures. The Italians and the Spaniards do not go on holiday for the weather; they get that a lot of the year round, so a lot of the Italians and Spaniards like to come to a rather cooler environment and enjoy the culture, the heritage and the events of the country. They are particularly strong, they are growing markets. There is more disposable income in these countries being spent on touring holidays. As regards the hub of London, it is difficult to imagine replacing London as a hub for long haul and that will still be very important for us. The important market is the United States in terms of overseas visitors; it is still our biggest source of visitors. That is a longer trip usually. It is not a short break market. We would like more flights directly from the United States but we recognise that visitors would still be coming through the London hub from, as we hopefully develop other markets, for example, the Far East, the Middle East, and certainly at this stage it is primarily through the hub. These people are coming for longer periods at times. It is a different market segment.

Just out of curiosity, the Chairman was asking you earlier on about the perceptions of overseas visitors about Scotland and should we not be building on those perceptions. Would it be fair to say that visitors from North America are looking for tartan and kilts and shortbread or whatever?

(Mr Riddle) In the main, yes. Visitors from North America tend to fall into two, perhaps three, categories. There are visitors seeking to look at culture, the heritage, the history and the associations there tend rather to be with tartan and castles. We also have a strong market, for example, in golf where that is less relevant. They are looking for the best golf courses in the world, which we undoubtedly have, and they are looking to enjoy that. The other market which is developing, which is one we have not completely defined yet, is this one about genealogy and looking for one= s ancestors. That is not one that one easily pigeonholes with tartan and heather either. It is people who normally want to come and see the docks on the Clyde and they are rather disappointed if they are not there, or people who want to come and see the croft on Skye or even to come and see a graveyard, so it is a slightly new tourism need that we are addressing there.

(Mr Lederer) I spent the other half of my working life on the other side fo the Atlantic where I remember discussions when I was in Ontario, where we would look at Scotland or the UK and we would kill for half the icons that we have here, and yet we seem to spend all our time apologising for them, thinking we should not use them. We should use them where appropriate. That is about understanding consumers. What is it that is going to make them visit? If you go to Germany it is a totally different discussion. If you got to France it is another different discussion. There are different things we use, but are we not fortunate that we have got all the things that we have to use because a lot of our competitors do not have those? They have got sandy beaches and nice weather and that is it.

Which shows what a stupid bit of marketing Cool Britannia was, because if you can have Cool Britannia you can have Cool New York City. It is something different that people were looking for. VisitScotland has been rather lucky in that its budget has doubled over the last ten years and yet visits have fallen off steadily. Is it solely due to September 11 and foot and mouth?

(Mr Lederer) It has not doubled. It has gone up nine million in six years.

It has doubled in ten years is what I have got.

(Mr Lederer) It has gone from 22 per cent in 1997 to 33 this year. The answer is no. There is another point I can quickly make about when you were comparing budgets earlier on, that somehow ours was , 90 million and something and England was , 12 million, from memory. That is not the case because of course included in the , 90 million is everything that Historic Scotland spends, everything that the National Trust and all these bodies spend. If you are going to make a fair comparison, if you add those to England it is a lot more. We should get the comparison right. It is not only about September 11. In fact, a lot of excuses have been made and a lot of people have used September 11 as an excuse and we must not do that. Yes, it was a terrible thing and it knocked us backwards but the long term trend was already there that we were in decline, which was exactly why we had to re-invent the organisation, look at the budget again, look at how we spent the money and really come up with the strategy I talked about earlier and say, A What is the goal?@ . I still do not think that goal is necessarily ambitious enough but the reason we made all those changes is that we can move it forward in a completely different way not only to arrest that decline but start to grow.

To what extent, with the changes that happened with the restructuring of the BTA, were you consulted as an organisation by the Department of Culture, Media and Sport?

(Mr Lederer) As far as I am aware we were not.

Would you like to have been consulted?

(Mr Lederer) Yes.

If you had been consulted would you have approved of the changes that have now come about?

(Mr Lederer) I think we would have had some serious questions about what the implications would be of that decision and in my training with all decisions you have got to ask the A what if@ questions and what are the implications of that decision. We would have had questions about that. I am not saying we were right or wrong but we certainly would have had questions.

Would one of the questions have been this? I have been asking questions so far today about overseas visitors but in the domestic market do you not think that it could be argued that there is now going to be some waste of public money because of competition between the three national tourist boards competing for the same market to get people within the United Kingdom to go to their particular regions or nations?

(Mr Lederer) There is some of that but it is more that the emphasis mainly, if you talk to the English regions and if you talk to Scotland and you talk to Wales, that what they are trying to do is arrest this negative balance we have got about the British being one of the largest outgoing markets in the world and how can we address that. We have a huge outflow. How can we make more of those people who have one holiday in the UK a year, preferably in Scotland? How can we address that balance? It is not just about A Come to the Lake District@ versus A Come to Dumfries@ . I think we are past that. If we could change this balance and have a few more holidays made more attractive for people in the UK to spend time in the UK and have one less holiday abroad as well as bringing more visitors in, it would make a huge difference to our balance of payments.

Mr Flook

I note from the figures that there has been a reduction in inbound tourism in Scotland over the years and no doubt there are lots of reasons for that. What percentage of that reduction has been English tourists, if any?

(Mr Lederer) Are you talking about overseas tourists?

I am talking about the number of tourists going into Scotland. I am English. I do not represent anything to do with Scotland so you can answer this from the Scottish perspective.

(Mr Lederer) Are you talking about overseas or domestic tourists?

Both.

(Mr Riddle) From 1997 to 2001 I believe we lost somewhere in the region of three million visitors in total. About 500,000 of those were not British, so most of them would be British. Of those British we have not got a precise figure but I think it would be approximately 50 per cent English, 50 per cent Scottish.

(Mr Lederer) But that would include Scots, for example, who did holiday in Scotland and then went abroad, so you have to factor in a lot of these things.

(Mr Riddle) Over the same period you can see quite a significant increase in expenditure by British people overseas. The decline from 1997 through to 2001 was primarily due to two factors: the massive increase in competition, new countries opening up, made all the more competitive by an exchange rate that was rather disadvantageous, and cheaper access. You can see the growth of cheaper access to all these new destinations attracting the British travelling public.

Does distance matter - I presume it does, but to what extent - the further you go into England in relation to people= s propensity for wanting to go to Scotland? That is, do people from Somerset have as strong a propensity to go to Scotland as they do from, say, Yorkshire?

(Mr Lederer) The strongest market is right here, London and the south east, and after that there is an element of the closer you are the easier it is to jump in the car and go, if you are in Newcastle, to Edinburgh or come to Perthshire and it is fairly quick, and that gets less in general terms as you go south. That is the market.

Is that market from London because obviously there are a lot of people here who have moved from Scotland to London and they are going home, or is it to do with better transportation links?

(Mr Lederer) I think both of those. Visiting families and relatives is a huge market in itself. Also the access is that much easier again, because you can jump on a flight from several airports around London and get there very easily now.

The reason I am asking is that there is a very good train from Somerset to large elements of Scotland and yet you do not seem to see too much advertising of that. Could it be that you are impacted by the likes of the poor cross-country Virgin services?

(Mr Lederer) I am not sure.

They have a very bad reputation for turning up on time. It used to be to do with Railtrack, or whatever it is called now.

(Mr Riddle) In general terms it probably is fair to say that railway travel is not seen as nearly as attractive as it used to be and is very important for Scotland. One of the previous heydays of Scottish tourism, going back to Victorian times, was built on the back of the railways which was also relatively short breaks going to country hotels in the Highlands by train to a purpose-built station. We would like to see that come back. It is not there today but I think that would be a major contribution to better access to the country and around the country.

I get the perception that, if you look at English patriotism growing, there is an increasing awareness of whingeing Scots moaning about the English and what-have-you. Does that impact on people= s desire to go to Scotland or is it rather like the fact that we still go to France even though we dislike the French? Have you detected at all an increasing reluctance?

(Mr Lederer) No. We would be very concerned if that was the case.

Is there going to be?

(Mr Lederer) If that is a growing perception in England we would be very worried about it. Whether it or it is not I do not know. We need to institute some research but that would be a very serious concern. It is not the case but it would be a serious concern.

Rosemary McKenna

I am delighted about the idea of driving up standards. I am passionate about quality and quality of service and I do think there has been a much more professional approach over the last five to ten years. You can see it; it is very obvious. There are a whole list of areas that we need to look at to try and improve them. One of the areas I would like to explore a bit with you has already been looked at but perhaps we could explore it a bit more deeply and that is training and training for quality. My local college, Cumbernauld College, does an excellent job and produces some very fine young people, well trained, but there is strong anecdotal evidence that a lot of young people leave the industry. Is that true and, if so, what are you doing to address that?

(Mr Lederer) I think it is true. It frustrates me enormously. I do a lot of talks to schools and various young people, and I have two sons of my own who obviously look at the industry with some interest. They see it as a very exciting industry. They like the fact that it is seven days a week, it is 24 hours a day, it is clubs, it is pubs, it is bars, it is hotels. They love that fact and they think it is terrific. Then they talk to their teachers and parents and that is the first place they get put off. If they made it into a college like Cumbernauld which, as you say, does a very good job and gets people well prepared, the worry then is this issue about what kind of businesses are they going into and are they encouraged or put off? It is getting better. Is it getting better and fast enough to keep up with consumer changes in their expectations? That is my worry. The two biggest concerns for my business is the growth in customer expectations and will I be able to find people fast enough to take care of those rising expectations, that is the real issue.

I agree with that. I see real problems for these young people. Then at a stage further on there are those who go through degree qualifications and achieve, but even after that they are very often in the industry for a while, is that right, and then they are off somewhere else?

(Mr Lederer) Yes, I think that is fair and it does happen. Equally, we need to be careful because a lot of those young people go into the industry. If you go and speak to the bosses at Boots, as I have done, you will find that they target their young graduates from hotel and catering courses because they know they have been well schooled in the art of looking after people, that is what they are going after. There are a lot of people after those young people, which is great. Equally, we get people who have got degrees in geography or other degrees. I do not think that is a problem. I think it is about whether we look after our people as well as Boots or Marks & Spencer do, if they are the bench mark, and are they going back to their peers saying this is an industry that not only is exciting but there are real prospects and you get looked after and you get good training and development.

On the issue of rail transport, I agree with you, I think there is a real opportunity there. Do you talk to the Scottish Executive about improving the transport infrastructure and, on a national scale, improving rail links? It is a very pleasant holiday to be able to go on to a train without having the hassle of getting to an airport or driving. Do you see any hopeful signs there that you are being listened to?

(Mr Riddle) I think the growth in tourism has risen with the government and with the community, so that can only be a good thing as far as we are concerned and therefore our contributions on all major issues do get a better hearing than they used to do. Unfortunately that was partly due to the tragedies of last year which emphasised how significant tourism is. Obviously it is not feasible for us to make significant changes in internal transportation, but I do believe the subject is being addressed. I think there is a new emphasis because it is not just tourism but other areas of business that are calling on the Executive to have a good look at the transport structure within Scotland.

Chairman

Thank you very much indeed. We are most grateful to you, gentlemen.

(Mr Riddle) Chairman, I understand you are moving on to films at a later date. We would like to give you a book about locations in Scotland because that is, of course, the best place in the world to make films!

Chairman: Thank you.

Memorandum submitted by the Scottish Minister for Tourism, Culture & Sport

Examination of Witness

MR MIKE WATSON, a Member of the Scottish Parliament, Minister for Tourism, Culture and Sport, Scottish Executive, examined.

Chairman

Mr Watson, it is a particular pleasure to welcome you here today. I am going to launch the questioning with Alan Keen. Do I discern from your face that you would like to say something to us first?

(Mr Watson) I have a short statement to make, if that is okay. It is a pleasure for me as a Scottish Executive Minister to be asked to give evidence at a House of Commons Select Committee. I think that is an important way within general terms of defining the relationship between the Scottish Parliament, the Scottish Executive in the post-devolution period and I would like to think - it has not happened yet - that we could soon be in a position where the Scottish Parliament could ask for Whitehall ministers to come and give evidence and that they would feel they were comfortable enough to do so. However, I am very pleased to be here today. I know that you and your members have seen my written submission and that confirms where the Executive believes the challenges lie for Scottish tourism and it also sets out the key strategic priorities which we have identified as crucial to the success of Scottish tourism. Much has been made of the impact of foot and mouth disease and September 11 in 2001 and of course these events had a huge impact on tourism across Scotland and particularly Dumfries and Galloway and the Borders. The figures show that tourism activity in Scotland had been in decline for some years before that after a sustained period of growth through to the mid-1990s and that decline is not particular to Scotland but mirrors the pattern at UK level and the reasons for that I think Members will already be aware of. It does need to be seen against a continuing growth in international tourism and it has happened despite significant increases in investment in Scottish tourism and the VisitScotland budget has more than doubled over the last decade. So the major challenge facing us in Scotland, and in the UK, is to reverse that decline and to re-establish tourism as a growth sector in the Scottish and UK economies. As I have said in my statement, we have focused in Scotland on five priorities for tourism: improving the structure of tourism funding and that is taking the form of the Area Tourist Board review; improving the marketing of Scotland under the new marketing strategy developed by VisitScotland which is now in place and is paying dividends; improving the use of technology to understand and meet the needs of our visitors and that is our website VisitScotland.com, a new tourism initiative which was launched earlier this year; improving product quality, and improving employee skills and training. The last two are the ones we have concentrated on because these are the ones where we have not made much headway. Work is under way on all of these. I have just come from a meeting of the DCMS across Whitehall and the devolved administrations and we discussed both the issue of product quality and employee skills and training and I am encouraged by the positive spirit of co-operation demonstrated at that meeting and I am sure we will turn that into effective action in future meetings. I think it would be appropriate for me to say a little bit about our relationship with the British Tourist Authority and our views on the recently announced changes because I know the Committee is interested in that. The Executive keeps in close contact with the DCMS on tourism issues, both at ministerial and official level and that relationship worked well in the weeks before the DCMS announcement. We were briefed first at official level, then First Minister Jack McConnell discussed our concerns with the Secretary of State, Tessa Jowell and I also had a discussion with Kim Howells. I see the BTA restructuring as certainly potentially good for Scottish tourism and it was on that basis that the First Minister and I were able to welcome Tessa Jowell's announcement. DCMS have agreed that the activities of and funding for the new English marketing be kept entirely separate from the overseas marketing efforts of the BTA and to make this a reality the DCMS have agreed to consult the Scottish Executive on a number of key aspects of the BTA's operations. They have also agreed that they will lay a copy of their Annual Report and Accounts before the Scottish Parliament in future. I am clear that our agreement with DCMS on these arrangements will ensure that there is no dilution of BTA marketing effort on behalf on Scotland in overseas tourism markets. Clearly we will have to work to ensure that that is the case, but I am confident that it can and will be on the basis of the understandings that we have. BTA have offered VisitScotland a desk in every one of their overseas hub offices and VisitScotland are currently reviewing how best to take up this offer. The UK remains the priority market for VisitScotland, accounting for over 90 per cent of tourism trips in Scotland. But growing the overseas market is hugely important to the future success of Scottish tourism. I am determined it should once again be a growth sector within the Scottish economy and I am clear that the restructuring of BTA will help us to achieve that objective.

Chairman: Thank you very much indeed. I should point out to the Committee that we have got a limited time for the Minister so I am going to ration time pretty briskly.

Alan Keen

Welcome, Mike. That was all very fascinating, but can I come on to what is really the point. We have done a lot of good work on this Committee in the past on the value of hosting sporting events. What value do you put on your bid for the European football championships in partnership with Ireland and how do you see it going? Presumably it will have a long-term benefit in raising Scotland's profile.

(Mr Watson) Our bid with Ireland for the Euro 2000 football championships are part of the major events strategy that we are trying to develop. There will be a formal announcement on this later in the week by the First Minister, but it is very much our aim to position Scotland as a serious player in major events in the years ahead and that is not just sporting events, it could be cultural, major conferences, major exhibitions, anything on a big scale that brings people to Scotland and lets people see what Scotland has to offer apart from the event itself. We will hear the outcome in just over two weeks= time. I can only say that we are hopeful. We have done everything we can do. We have worked very well with the Irish and we have made our bid and it deserves to be successful. I do not think there is anything else we could have done. The benefits to Scotland will be clear and go well beyond the three weeks or so of the event in June 2008. It would be about positioning Scotland as a destination that is attractive and seen to be so, perhaps more so if people have not thought about coming to Scotland for whatever reason in the past. There will be investment in infrastructure, in the new stadiums, in associated sports facilities, in youth sport as well, they will all benefit. I have responsibility also for culture and sport which is increasingly linked with tourism. Although we do not have a figure where we can say if we are successful on the 12 December this will mean , X million or billion over the years, what I do know is that it will greatly enhance Scotland as a visitor attraction and it will show that modern Scotland has a lot to offer that perhaps some people do not realise yet. So we will be marketing that in its broadest sense if we are successful on 12 December.

Alan Keen: Good luck with that.

Derek Wyatt

It is very good to hear that the FA is supporting the Scottish-Irish bid. Can we count on the Scottish Rugby Union supporting the English bid for the World Cup in 2007 and if we cannot, can we get the Scottish Parliament to endorse it?

(Mr Watson) Let me just say that obviously we have made our case to Jeff Thomson, who is the FA representative on the UEFA Executive. He has not stated specifically what he intends to do, he certainly has not stated it publicly. We have made a strong case to him just as we have to all the members of the Executive who will be voting on 12 December. As far as the Rugby World Cup is concerned, I know that England has announced that it is going to bid. There are still discussions going on within Scotland. There is a possibility that Scotland, along with other countries, may also submit a bid. I was talking as recently as Sunday with senior people from the Scottish Rugby Union and they have not yet decided what their position will be. I have got to say, there was a feeling - and I expressed this at the meeting of UK sports ministers in Cardiff in June - that the RFU bid was perhaps a little bit too quickly endorsed by Richard Caborn and I said this to Richard himself. I think it is important in a situation where we do not have British countries competing against one another, whatever the sport is, if there is a major event to come I would rather that the home countries get together and decide a way forward. Rugby has been fraught recently. We know all about the television deal and it has not been possible and the RFU have gone their own way on that. I suspect that this is a fall out. At this stage I cannot give the support you would like me to give because there is the possibility that Scotland may be part of another bid.

Can I ask you about transport. If tourism is your number one business in Scotland and if most English now take their holidays abroad but go for the short, fast breaks, ie for four days or the three days to Scotland you become a much more interesting proposition again, but if you cannot fly to most of the destinations directly and you have to go to Glasgow and then drive or you have to go to Glasgow by train and drive it makes it less attractive. I am thinking of the Islands where it is the most beautiful place on earth, where we would like to go more often, but getting there is so difficult from the South-East. In the Green Paper on airports are you planning smaller airports like City Airport across those areas to attract even more destination tourists?

(Mr Watson) This is another matter we were discussing with DCMS colleagues this morning and John Spellar, the Transport Minister, was there for that part of the discussion. It is a big issue in Scotland, more so in terms of flights from abroad than it is from within the UK. There are issues with that and I will come to that in a minute. There are not enough flights from countries like, for instance, Sweden and we had the Scottish and Swedish promotion just last month. There are no direct flights from Stockholm to Edinburgh or Glasgow but that will change in the not too distant future. That is a difficulty. If people have to come to the UK and go to London, frankly, they are not going to do that for a four-day break. If you live in Stockholm and you want four days away you are not going to go to London and then to Glasgow or Edinburgh, it does not make sense. Even in terms of a longer break, there is a psychological barrier if you have got to take four flights instead of two. One of the ways we are tackling that - and this would impact also on internal UK short break holidays - is that we announced a week ago a route development fund which will basically enable landing charges at airports to be subsidised. That has been a problem particularly with Inverness. You mentioned the Islands, but Inverness is a case in point. Quite a few of the Islands flights go from Inverness. You cannot get direct to Inverness - you can from Gatwick - from places like Manchester or Birmingham, but if you cannot get there direct then that is a problem. Part of the problem is that you will want to get the cut price airlines to fly to Inverness, and one of them in particular rather publicly made the point that they were not prepared to do it unless landing charges were reduced. In a sense there has been a response to that, recognising that those handling charges had to come down. The question of flights to the Islands is a slightly different issue, although it is an issue within Scotland as well. People who have got family in the Islands often complain about the frequency or the cost of flights from Glasgow or Edinburgh to Stornaway and that is something that is slightly different. There are a number of reduced price flights certainly from Aberdeen to Orkney and Shetland but not enough and that is an issue that we have also been discussing with the airlines. I am aware of the point that you make and I am hopeful that the route development fund money we have announced will enable more internal UK flights to be available from the cut price airlines so that people from all parts of England can have those short breaks in Scotland.

Mr Doran

It is nice to welcome you back, Mike, and it is also nice to welcome a fellow Arab to the House of Commons. I will leave everyone else to speculate what that means. I listened carefully to what you said about the new arrangements concerning the British Tourist Authority. We have heard quite a lot of evidence now from a number of sources, including from the Scottish bodies today and at best you can say that they are unenthusiastic about the proposals. I think there are concerns about the conflict of interest which the BTA will have and you have made it quite clear in what you said. When the Secretary of State was here last week she made it clear that this had been discussed between the governments and agreed between the governments. Does it not concern you that the people who will actually have to deal with this on the ground, people like VisitScotland and the various other agencies, are not showing a lot of enthusiasm for this change?

(Mr Watson) I would not dispute the way in which you have characterised the response to the changes. Within the last hour I have said that, in terms of Tessa Jowell asking me what I thought, I was happy with the assurances that we got, but the new regime is not in place yet. If we were meeting a year today I might have a different attitude and I might be raising the issues or problems that have arisen. We have asked for assurances. Our First Minister asked for assurances and we got them in writing. We will have to see how it operates. If it operates as we intend it will then it will not be a problem, but there are issues that will have to be addressed and they can only really be assessed when they arise. There is a possibility of VisitScotland having a presence in the BTA hub offices that they are going to have. There are other aspects you have heard from VisitScotland and there is the possibility of developing Scotland internationally, that is another prospect. We will have to see within the resources given to VisitScotland what can be done in terms of a direct presence there. I can only say that the two BTA offices that I have visited so far this year have been in New York and Stockholm and they have both certainly impressed me with what they were doing on Scotland's behalf. You could say that is now, what about the future? We will have to ensure that the assurances that we have got are carried forward.

Once the thing is up and running will there be scope for change? We heard earlier from Mr Lederer about the distractions, for example. I can understand why they do not want to get sucked into a debate about structures and processes. This is an industry which is very competitive, it operates with quite a number of constraints and I can see why the professionals want to focus, but at the same time we have to be concerned about the structures that are being put in place. I accept what you are saying about monitoring, but a year from now change will be costly and expensive. Now is when we need to see the problems.

(Mr Watson) What I am saying is that the problems that we have identified we have sought assurances on and all I can say at this stage is that we are satisfied with that. Obviously I have discussed this with VisitScotland as well. We are not looking into the future and saying we think everything will necessarily work out as we anticipated, but what I will say is that changes can be made. If something is not working effectively and if I am still the Minister then we will be lobbying very strongly for those changes to be made.

We heard some very impressive and very focused evidence earlier from the various Scottish bodies that we have heard from today and I certainly was impressed and pleased at what I heard. There is clearly a strategy, and everyone talked positively about the partnership it operates between government and industry which is extremely important. One of the clear differences between Scotland and England, apart from the amount of money that is spent on tourism, is that Scotland has a seat at the Cabinet table. Given you have a seat at the Cabinet table, can you say a little about exactly what advantages you feel that gives the tourism industry in Scotland?

(Mr Watson) About this time last year the major tourism hospitality sector conference in Scotland called for a tourism minister within the Cabinet. I think what they probably called for was a dedicated minister who had nothing to do but tourism. I also have responsibility for culture and sport and Gaelic and heritage and so on. I have a deputy minister who concentrates more on the culture and sport aspects and I lead very clearly on tourism. I think that change made by the new First Minister was a statement that there was a recognition of the importance of the sector to the Scottish economy. The fact that I am a Cabinet minister simply enables me to deal with issues on a one-to-one basis within the Cabinet in a way that was not the case in the past. There were previous ministers who had responsibility for tourism but they all floated on to become junior ministers. That has changed and that sort of focus and status has been given. I am sure if the VisitScotland and Scottish Tourism Forum people sitting behind me were to be asked if that had translated into sufficient extra funding they would at least have to consider the opposition and I understand that. At the same time, I do feel I am in a stronger position to argue for additional resources not just for VisitScotland but for other sources of funding for Scottish tourism.

Mr Doran: Thank you very much.

John Thurso

I think Eastern Airlines have just opened a direct flight from Inverness to Manchester which will enable me to go and visit the Chairman. On airports, could I also suggest that Wick should not be forgotten and the second runway resurfacing should remain at the forefront of the Executive thought. Can I come on to what you said about the assurances that you have had from DCMS and the point that these are in writing. Will they be published?

(Mr Watson) The honest answer is I do not know. There has been an exchange of letters between the First Minister and Tessa Jowell and that has been followed up in an exchange of letters between Mr Broadley of the DCMS and Tom Wright, who is the new Chief Executive of the BTA and that is basically setting out the requirements and it is putting in those terms subsequent to the agreement between Tessa Jowell and Jack McConnell. I cannot give you an answer as to whether that will be made public, it is not my correspondence, but certainly it meets what both myself and the First Minister were looking for.

Presumably the First Minister's correspondence would be publicly available under the Freedom of Information Act and so on?

(Mr Watson) I am not sure of that.

Would you like to see it published?

(Mr Watson) Yes, in a sense because everything that is in it has been mentioned in advancing our case for the new BTA. I am not uncomfortable with any of that. We asked for assurances and basically after some discussion they were agreed.

Can I come back to the point that Mr Doran was mentioning because it does seem to me slightly curious. As I understand it approximately a week before the announcement was made by the Secretary of State here VisitScotland were unaware of what was happening and therefore the conclusion is that, as they gave in evidence this morning, they were not consulted about what was happening. Can I ask why it would be that you as the Minister responsible for that had no dialogue with them about what their thoughts might be or took advice from the body that was due to market Scotland?

(Mr Watson) My recollection is that my officials certainly had discussions with VisitScotland after I spoke to Kim Howells in the conversation to which I referred earlier. I cannot be absolutely precise as to when that was, but certainly all the discussions took place. One of my officials has a weekly meeting with the Director of VisitScotland and that is a weekly standing meeting and my understanding is that that should be discussed then.

But not at a time when anything could have been input or changed. It was a briefing, a case of this is what is happening, was it not?

(Mr Watson) Yes, that would be fair to say. I think it is fair to say that the decision was pretty far down the road by the time I had my discussions with Kim Howells. Let us be clear, at the end of the day responsibility for the BTA and the ETC rests with the DCMS. From my point of view, I look after the Scottish end of that and that is why myself and the First Minister sought the assurances to which I have referred on several occasions.

Under section 86 or 88, the cross-border authorities paragraph in the Scotland Act, you have a statutory right not only to be consulted but to advise on and the whole point about cross-border authorities in a wholly reserved area is that you have the right to express yourself. My concern here is that the implications of full scale devolution which we all enjoy north of the border and understand are not necessarily understood south of the border and that there is a fait accompli that arrives north of the border, has been signed up to by the Executive and I do not either criticise or applaud that, but the fact is that the Scottish industry and the Scottish body which is supposed to be linking up with the BTA are unaware of what is going on, have no chance to consult and yet the whole point about cross-border authorities in a wholly devolved area is precisely that they should have.

(Mr Watson) If you are saying to me could there have been more discussion on this matter then clearly that is right. If you then asked me would that have brought about a different outcome I would have to say I am not sure. I understand what you are saying, but by and large I think the fact that the position of VisitScotland now and that which will exist, say, a year from now is still subject to the way in which the new arrangements for BTA develop. We have got to make sure that we have input into that to make it as positive as possible. That is basically what I and the First Minister are confident that we can do on the basis of discussions with ministers. Rather than looking backwards, I would look forwards and say I do not think this is a situation in which we have no influence because the new arrangements have still to be rolled out, put into operation and seen to be operating effectively for all parts of the UK.

Chairman

Your title is Minister for Tourism, but you are in fact responsible for a good many other areas of activity and a lot of those areas of activity in the UK would come under the Department for Culture, Media and Sport. Is the fact that your title is Minister for Tourism a token of the greater importance that is attached in Scotland to the tourism industry than might be regarded in the UK government that we have here and we saw last week?

(Mr Watson) I can only really talk for Scotland. My full title is Minister for Tourism, Culture and Sport.

It starts from tourism.

(Mr Watson) As I said earlier, I think it is quite clear that the First Minister had in mind when he decided to create this post that tourism was to be the major focus of that. The fact that tourism does not appear in the title of the Department for Culture, Media and Sport may say something about England, I would not like to comment on that. I think almost all of my portfolio would relate to what happens within culture, media and sport and I am sure heritage must be within that Department as well. Even Gaelic comes under that heading because Gaelic broadcasting, broadcasting being a reserved power, is financed to the Scottish Executive from DCMS. I think it is only fair to say you would have to ask the ministers from the Department of Culture, Media and Sport where they place tourism. Certainly, we had a very full agenda today on tourism and hospitality issues. That is a six-monthly meeting and it involves ministers from the devolved assemblies in the Scottish Parliament. Ivan Lewis from the DfES was there as well, so I think that shows it is getting quite a high level of importance.

There was a concern shown right across the Committee last week when we had Tessa Jowell and Kim Howells here in that Kim Howells is the person with specific responsibility in the Department of Culture, Media and Sport for tourism. There was concern that with all his other responsibilities, tourism was in danger of getting lost. One would take it from the priority in your title and in your work that there is no danger of tourism getting lost as far as the Scottish administration is concerned?

(Mr Watson) No, indeed. That was why the ministerial portfolios were reconfigured this time last year, to give recognition to the fact that, as you have already heard, tourism makes such a contribution to the Scottish economy, and partly because that factor is not widely appreciated in Scotland, I should say, and creating a minister with main responsibility for tourism was one way of ensuring that that did get greater attention.

Rosemary McKenna

There is an area here that is worth looking at given the nature of devolved government and given how the Scottish Parliament and the Welsh Assembly have looked at issues in - the jargon is - a more joined-up way, and I think that is absolutely right, that there does seem to be a better working across the sectors. Would you agree with that? I suggest to you that the current development of the cultural portal in Scotland where access will be available to point people to all sorts of areas would be a very good example of how that works within your department.

(Mr Watson) Yes, it would. We certainly do work very hard within my portfolio to operate in a cross-cutting manner between the various parts of it because the linkages are so clear and so obvious. We also do it outwith the department as well because particularly the cultural aspects of my portfolio are linked very clearly with education, sporting aspects are linked very clearly with health. In our spending review that was announced in September there were funds made available to my portfolio from those other ones. We do practice cross-cutting quite vigorously and I think quite effectively. We do it internally as well. The cultural portal that you mentioned will very shortly have a tourism equivalent in the e-tourism initiative, VisitScotland.com, which will be a gateway into everything that tourism in Scotland has to offer in the same way as the cultural portal when it comes on stream will do for all sorts of cultural aspects. We do try and work in that joined-up way, both within the disciplines of the portfolio and outwith as well, where there are benefits clearly to be made in that kind of joint working.

Can I put my little plug in for the bid with Ireland on football because I am just as interested in football as well. I was at the English-Irish inter-parliamentary body meeting yesterday at Manchester where the issue was raised and was certainly very strongly supported on all sides by all the members there and the minister as well, so we are delighted about that. Not only that but I think one of the little stadiums in my constituency, Clyde, is going to be used as a training area, not for major events but certainly for training. I would like to congratulate the way that the department seems to work very much across the board recognising that all of Scottish life can be brought together under that area which is about health, about education, about tourism, about just the general development and promotion of Scotland.

(Mr Watson) Very much the promotion of Scotland. This comes back to the point that Alan Keen made at the start about what would be some of the benefits of getting Euro 2008. One benefit would be just generally promoting tourism but promoting the status of tourism as well with our young people because I am concerned that not enough of our young people see tourism as a career. We have 13 universities in Scotland and I understand that eight of them offer tourism or hospitality and leisure degrees. There are too many coming out at that end and not enough of those for whom a university education is not appropriate but who can do meaningful training through a modern apprenticeship or vocational training and can make a great contribution to the tourism sector but are not doing that for a number of reasons: it is seen as being unattractive, unsocial hours, low pay, seasonal, employers are characterised sometimes as not really caring and therefore staff are not well motivated. If the people who come to Scotland are met with a surly or unhappy individual, for whatever reason, then that is not a good first impression of Scotland and could affect whether they come back. One of the ways I think you get round that - that is why I am here today because we were talking about skills training and vocational training and I wanted to hear what was happening in England - is to get a more positive approach with Careers Scotland, the careers agency in Scotland, to young people within schools selling tourism or hospitality and the leisure sector as a career. There are many, many fulfilling jobs there which can build into a career but young people have to be convinced. There is this thing somehow about university is the thing to do, they must go to university now, and it is very good that more and more youngsters are going to university except that some of them may not be best directed to university, vocational training may be far more appropriate for them and also for the contribution they could make to the economy and the jobs they can get as well. I think tourism is clearly an example of that. If one of the spin-offs of getting Euro 2008 is that the tourism sector is highlighted and made more attractive to more people then that is the first turn of the wheel that will ultimately bring more people in here before, during and after Euro 2008.

Chairman: Thank you very much indeed. As I say, a great pleasure to see you again. Thank you.