Examination of Witnesses (Questions 1-19)
2 DECEMBER 2003
Tessa Jowell, Ms Sue Street, and Mr Keith Smith,
examined.
Q1 Chairman: Good morning, Secretary
of State. We welcome you and your colleagues here this morning.
I suppose we can take it that your annual report is your opening
statement?
Tessa Jowell: I think you probably
can. I was not intending to make an opening statement unless you
wish me to do so.
Chairman: Excellent. We can get
on.
Q2 John Thurso: Can I first of all declare
my interests and draw attention to my register of interests, in
particular my presidency of the Tourism Society and deputy chairmanship
of Millennium and Copthorne. Can I also apologise to you, Secretary
of State? Unfortunately, it is Scottish questions today so the
Chairman has allowed me to go first but I will be leaving. I want
to ask about tourism but first could I ask about the recommendations
of the Environmental Audit Committee who were quite critical of
the department? At paragraph 19 of their report, they said, "We
would particularly single out DCMS and several other departments
within which we would have expected far greater commitment in
terms of staff resources." At paragraph 32, "We find
it deplorable that both DCMS and ONS should place so little weight
on sustainable development and environmental objectives."
Could you tell us something of what the department has done to
respond to that?
Tessa Jowell: Thank you. As a
department, we took the criticisms of the Environmental Audit
Committee very seriously indeed. I will ask Sue Street, my Permanent
Secretary, to add to what I say by way of introduction. Obviously
through our 65 departmental bodies, we have a great opportunity.
Part of their purpose is to educate more widely about sustainable
development and Estelle Morris serves as our green minister. We
have allocated £2.5 million for joint programmes between
my department and the Department for Education and Skills to develop
children's educational programmes in relation to sustainable development
and some of this funding is being shared with regional museums
who are taking this on as one of their functions. As you will
be aware, sustainable development is one of the core values of
the new opportunities fund, one of the 15 lottery distributors
that we have responsibility for. The fund has an annual grant
programme of 500 million and, in its five years of existence,
has committed over £2 billion to sustainable development
projects. We are in January going to publish a sustainable development
strategy where we set out our policy and our proposed plan of
action. The strategy states, inter alia, that the tourism
division will consider a high level meeting for the tourism sector
to consider the impact of climate change and will also monitor
closely the way in which the regional development agencies discharge
their new responsibilities in relation to tourism. Clearly, a
very important element of the tourism strategy is sustainability.
Q3 John Thurso: May I ask whether you
are able to support hospitable climates which is the DTI/HCIMA
initiative to help hotels become greener and more sustainable?
Tessa Jowell: We are. We have
also held the first of a series of training courses on sustainable
development for our departmental staff and for our NDPBs. We will
also accept the invitation to join the government network of officials
led by the Department for Environment, Food and Rural Affairs,
which is coordinating across government work on sustainable development.
There is one further innovation that I should mention having given
you some of the work in progress at the department, because you
may wish to avail yourself of this. The Royal Parks are sponsoring
a new green restaurant in St James's Park next Easter. This will
really be an opportunity to highlight sustainable practices in
reality and I hope also will raise the profile of what the government
is trying to achieve more generally in this area.
Q4 John Thurso: I will certainly look
forward to availing myself of that. Moving on to tourism, I am
not sure who might want to answer this but I have a letter from
Ms Street on 4 September, written to me in my capacity as president
of the Tourism Society, in which she said, "I am lucky to
have some of the most talented and hard working people in Whitehall."
Can I ask what system of appraisal is used to validate that statement?
I am very much looking forward to meeting you.
Ms Street: And I you. It was written
in the context of a dip in morale caused by some reflections on
perhaps how you perceived the quality of our work in the past.
We have a formal system of appraisal which follows the normal
Civil Service rules. It is open; it has counter-signing officers
and all the rest of it. The point I was trying to make was that
we do feel that under the Secretary of State's leadership in the
last couple of years we have raised our game. It may not be perfect
yet but I think it is quite important to get the best out of the
department and that we set clear priorities that the Secretary
of State has set and also that we train, encourage and motivate
colleagues and value their contribution. That was the context
in which we made those remarks.
Q5 John Thurso: How many people work
in the tourism department and what sort of payroll resource does
that consume?
Ms Street: It is around 25 people,
subject to checking. Can I fill time on sustainable development
by saying that we now have a director at board level who is championing
the environment issues. I think it is quite important that we
raise or game on that as well. Salary levels are around 35K across
the board, so that will give you an indication.
Q6 John Thurso: Am I right in understanding
that the department pays for the tourism adviser to the Mayor
of London, one of whose tasks is to monitor the tourism output
of the LDA, which is funded by DTI, and Visit London, which is
funded by DCMS via LDA?
Ms Street: I ought to know that
but I am afraid I do not at the moment. I will try and find out
for you. We work very closely with the LDA and the DTI so I think
it is altogether possible but I am going to have to verify that
for you.
Q7 John Thurso: It seems to me a rather
roundabout, curious cross-responsibility and I wondered why DCMS
could not fund these missions themselves.
Ms Street: Our general approach
is to be as joined up as possible where there is a common goal.
That would not make it extraordinary for us to contribute.
Tessa Jowell: You will be more
aware than most people that the department's work in tourism is
focused on four areas. The first is improving quality. We hope
soon that there will be a licence issued for the Sector Skills
Council. The second is improving the level of skill and therefore
recruitment to the industry. The third is improving the quality
of data for the industry and, fourthly, creating a single voice
and a coherent function in relation to marketing. My department's
role is in part instrumental in relation to data and making links
to other government initiatives, particularly in relation to skills,
but also catalytic in seeking to get more coherence across what
is one of our most disparate industries. Most tourism organisations
are micro organisations. It is very easy to improve the quality
of tourism through the efforts, by boosting productivity, of the
big players. It is much more difficult when you get down to the
very local, micro level of individual caravan parks, bed and breakfasts,
small hotels, all of whose performance contributes to our overall
performance in tourism.
Q8 John Thurso: I see that the PSA target
for tourism will be based on productivity. What do you mean by
"productivity" because it seems to me you can perhaps
improve quality. It seems you can improve volume through marketing
but I am not quite sure what the department means by increasing
productivity which, in a hotel business, I would say was improving
yield.
Tessa Jowell: We obviously work
very closely with the Treasury in relation to this. The Treasury
has a model which has established five key drivers of productivity
across innovation, skill, competition, investment and flexibility.
When we talk about improving the productivity of the tourism industry,
we are looking at achieving value added, both in relation to the
contribution of individual employees and as a result of new investment
as, for instance, VisitEngland, the website that will for the
first time bring together a wide range of tourism facilities and
in time will enable booking on-line. These are the ways in which
we will judge whether or not we have boosted productivity. At
the end of the day, a productive tourism sector is one which has
a high and increasing number of visitors, has a degree of resilience
to the kind of shocks that in our modern world will hit the tourism
sector from time to time and has the capacity to recruit and retain
high quality staff. VisitBritain are looking to increase the GDP
contribution of tourism. It contributes about 75 billion to the
economy at the moment. They believe that the capacity for market
growth could see the value of the tourism sector increase to 100
billion. One of the ways in which we will do that is by re-establishing
Marketing for England but also beginning to look at marketing
across the UK, very much in line with the contemporary trend in
the way people choose to design and take their holidays.
Q9 John Thurso: Can I ask whether it
would be possible or whether the department is considering publishing
measurable objective data for that PSA target so that we can see
what you are setting out to achieve?
Tessa Jowell: I certainly hope
that we can do that. You will understand the difficulty that we
have, not through want of trying, in establishing a base line.
We are working with the Treasury on this. The Treasury do not
have a single productivity measure but through the establishment
of the Sector Skills Council we will put in place one very important
driver for improving productivity.
Q10 John Thurso: It is difficult for
us to measure what you have achieved if there is nothing to measure
against. You have stressed, quite rightly, the important work
that VisitBritain and VisitEngland will do. In 2001-02 the allocation
was 64 million; in 2002-03, 69 million. Plans for 2003-04, 2004-05
and 2005-06 are 47, 48 and 50. On the face of it, it looks like
next year is a 32% drop on the current year. Do you think those
are (a) adequate resources and (b), if we are going to get to
100 billion—which I presume is over a series of years which
would merely maintain our competitive position in the world, so
it is a holding rather than a market share gaining position—do
you think that is an adequate resource to be able to undertake
that daunting task?
Tessa Jowell: Yes, I do, and it
will be if the industry itself contributes as it should to the
development of the tourism product. I think we have to be very
clear about what is the role for government in regenerating and
creating the resilience that this industry needs and what is the
role for the industry itself. There is considerable, good natured
dispute about the boundary in defining the responsibility for
marketing. The industry would be very happy if we continued to
invest as we did for the Million Visitor campaign in the wake
of 11 September, at that sort of level. That has clearly been
a campaign where the evaluation has shown great success. We need
however to be very precise in defining the Government's marketing
role as being in relation to market failure. In other words, marketing
in those areas that the industry will not do for itself. What
I am trying to do is to get the industry to work better together
and to come together more coherently than they have done in the
past. The Tourism Alliance is a very important step in that direction.
Through the greatly strengthened membership of the board of VisitBritain,
with much stronger commercial leadership, we will get there, but
I would be misleading you if I pretended that the industry itself
does not still need persuasion that it is their responsibility
to market their industry, not simply the Government's job to do
it for them.
Q11 John Thurso: If I have understood
you, what you are saying is that it is the government's job to
deal with market failure and the industry's job to deal with marketing.
Tessa Jowell: That is the starting
assumption but, as I went on to say, the difficulty is defining
precisely where the boundary falls between market failure and
brand marketing that the industry will normally undertake on its
own behalf.
Q12 John Thurso: That is a fairly substantial
shift from what the industry has always thought the BTA was there
for, which was to market brand Britain.
Tessa Jowell: Precisely, because
the market failure argument points to the fact that, whether you
are British Airways, Radisson Hotels or Thomas Cook Holidays,
you do not market Britain as a product; you market individual
destinations, individual hotels and so forth. No, it is categorically
not a shift. The model I hope we can move to is one where there
is a substantial contribution from government but the contribution
from government to marketing is met by at least an equivalent
contribution from the industry itself. The Million Visitor campaign
was a very good example of how that can work in practice. I think
we calculated that the value in kind marketing contribution to
the Million Visitor campaign was about 25 million, five million
in cash and between 15 and 20 million in kind.
Q13 Mr Doran: Still on tourism, the reorganisation
earlier in the year of the various tourist authorities was fairly
controversial in Scotland, as you know. Can you say a little about
how it is bedding down?
Tessa Jowell: I think it is bedding
down well. We have a regular meeting of tourism ministers. We
had our most recent meeting in Edinburgh about a month ago. It
is very clear what the pinch points are. We are very clear that
neither VisitBritain nor the England Marketing Advisory Board,
which is part of VisitBritain, should in any way usurp the role
and function of VisitScotland or the Welsh Tourism Authority.
I think everybody is alive to the sensitivities. There is a considerable
commitment to sharing work on areas of common interest like, for
instance, the whole area of diamonds, stars and grading systems.
It is common sense that if you are a visitor coming from abroad
it helps to have a similar grading system in Wales, Scotland and
England. I hope that we can move towards that. I also hope that
we can move towards focusing VisitBritain not just on marketing
Britain abroad but on beginning to build the UK-wide market. I
think that will become possible as confidence in the recognition
among the Scots, the Welsh and us that everybody respects the
boundaries that have been set by devolution grows. I felt very
optimistic after our meeting. The spirit was very good. The sign
up too of common analysis of the problems and common agenda was
very good.
Q14 Mr Doran: There are no signs in these
discussions about concern of the conflict of interest which everyone
was concerned about?
Tessa Jowell: By which you mean
the funds would be leached from VisitBritain into the England
Marketing Advisory Group and would give England a disproportionate
advantage. You will know very well that such is the level of funding
of the marketing function in Scotland and in Wales that they are
way ahead of the £5 million which is allocated to Marketing
England. In Scotland, they spend something like 28 million on
marketing. Wales spend something like 30 million on marketing.
There is a long way to catch up but the principle is a matter
of honour. VisitBritain has a budget for the whole of Britain.
The England Marketing Advisory Board has a budget which is to
market England. I think that the internal checks are sufficient
to safeguard the integrity of that boundary.
Q15 Mr Doran: It is a wicked question
to ask if your aspiration is to reach Scottish and Welsh levels
of funding.
Tessa Jowell: If we are successful
in getting the industry to come in and do some joint funding of
marketing, I think we have a very good prospect but, as you also
know, the rate of return on the English pound is arguably better
in marketing terms than the rate of return on the Scottish or
the Welsh pound.
Q16 Mr Doran: Moving to Ofcom, you say
in the report that Ofcom is expected to be fully operational by
the end of 2003. We are almost at the end of 2003 and we know
what the progress has been but it would be helpful if you could
give me a short progress report.
Tessa Jowell: The progress that
Ofcom has made has been very good indeed. Vesting day is 29 December
at which point they will take over all the functions of the component
regulators. David Curry is providing outstanding leadership to
Ofcom. I think he has assembled in the chief executive and the
management board people of outstanding quality, including some
of the very bright starts from my own department. I do not have
wholly unmixed feelings about Ofcom's success in building an organisation
of real calibre. Clearly they are constrained at the moment in
the functions that they can undertake. They are gearing up for
what will be their first major piece of work which will be the
review of public service broadcasting, which is a very important
precursor and complementary study to the charter review, which
I intend to launch consultation on on 11 December. That is Thursday
of next week.
Q17 Mr Doran: It seems clear from your
report that the way in which the department will monitor the progress
of Ofcom will be through the annual report. As this questioning
session goes on, you will hear a number of criticisms of the department's
own annual report. I think I have to ask what will make the Ofcom
report harder and more easy to assess than we are finding it with
the DCMS annual report?
Tessa Jowell: Ofcom's accountability
is two-fold both to my department and to the DTI. The monitoring
of Ofcom's performance will be carried out across two departments.
Ms Street: If the Committee has
views on how Ofcom can assist everybody best by the nature of
its annual report and also views on us, we can feed those in.
The accountability and transparency will be through the annual
report but of course there will be working level monitoring discussions
all the time between both departments. I think DTI and ourselves
showed very well during the passage of the Communications Bill
and Act that it was a genuinely integrated team and the monitoring
and relationship with Ofcom will continue in that vein.
Q18 Mr Doran: One of my main interests
in Ofcom's role, apart from the regional issue which is quite
large, is the relative failure of broadcasters in this country
to support the film industry, either by supporting film production
or by showing British made films on good television. I am aware
that the Communications Act contains a section which will allow
film making for the first time to be looked at as part of the
new public sector requirement. How will that be monitored in practice?
Tessa Jowell: That will be one
dimension of the definition of the range of genre that public
service broadcasters are expected to support. In the first instance,
that will be monitored by Ofcom through the three tier regulatory
structure. In relation to the commercial public service broadcasters
it will be published through the statements of programme policy
that the broadcasters themselves will produce and Ofcom will then
monitor retrospectively. There is not a quantitative, tier two
target.
Q19 Mr Doran: That is important because
we are starting from a very low base, are we not?
Tessa Jowell: Yes, you are right.
There is not a quantitative, tier two target. There is a requirement
on all public service broadcasters to promote—I cannot recall
the exact wording of the Act in relation to this—British
film in their scheduling. You are right to say that that is a
first. We have done a second important thing to promote film and
that is through the review of programme supply, freeing up the
whole issue of possession of rights to the advantage of the independent
production companies. The code of practice may already have been
signed by Ofcom or it is very close to being signed by Ofcom.
Ofcom will monitor the performance of the broadcasters against
the code that they have drawn up in the light of the conclusions
of the expert review which I commissioned about 18 months ago.
That is a second area in which support for British made film will
be reinforced. What I would suggest is that the legislation is
very new and we have to track over time its success in meeting
the objectives that were so very clearly articulated by Parliament.
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