Examination of Witnesses (Questions 1-19)
RT HON
ANDY BURNHAM
MP AND MR
JONATHAN STEPHENS
17 JULY 2008
Q1 Chairman: This is the Committee's
annual session that looks at the annual report of the Department
for Culture, Media and Sport. I begin by apologising for a few
absences from the Committee. It is Thursday and I am afraid that
as a result some Members must be elsewhere. I hope that we have
a quality panel, if not a large one. I welcome Andy Burnham, Secretary
of State, to what I believe is his first appearance before the
Committee.
Andy Burnham: It is.
Q2 Chairman: I also welcome Jonathan
Stephens, Permanent Secretary. You will be aware that last week
the Committee produced a report on tourism which is Britain's
fifth biggest industry, and it is probably the biggest for which
you have Departmental responsibility. As Secretary of State how
much time per week do you spend on your tourism responsibilities?
Andy Burnham: It is hard to give
a precise percentage. On any given day I would have discussions
within the Department on nearly every element of my brief including
tourism. I would say that every week there would be a couple of
discussions related specifically to tourism.
Q3 Chairman: You will be aware that
in the industry there is a perception that tourism features pretty
low in the list of priorities within the Department. There have
been seven Departmental ministers with responsibility for tourism
and quite often they have not even had that within their title;
it has been tacked on to the end wherever it can be fitted in.
Do you believe that is an unfair impression?
Andy Burnham: I do. I read the
Committee's report and I shall give it serious consideration.
Although I began by saying that I felt the criticism was a little
unfair, nevertheless if there is such a perception we need to
work to demonstrate that is not he case and counter it. If it
helps to say a little about my own background, 10 years ago or
more I was the adviser in the Department involved in the drafting
of the government's first strategy for tourism called Tomorrow's
Tourism. I hope I do not offend the esteemed Members of your
Committee when I say that Janet Anderson who was the minister
at the time was responsible for bringing forward that policy document.
I do have some interest and background to this. Looking back at
the ideas put forward in that document, I believe that a lot of
what we talked about then has borne fruit. The visitor numbers
back in the late 1990s were 25 million a year; in 2006 there were
32.2 million per year. I am sure the industry could make legitimate
criticisms but those facts are pretty impressive. Coupled with
a doubling of the direct budget for tourism in cash terms from
central government and the role of the RDAs, which is often missed
in this debate but is a very powerful force at regional level,
I think that adds up to a pretty good story of backing tourism.
I shall read the report and if there is a challenge there to meet
I shall redouble my efforts in the coming Olympic period. I will
pick that up and make sure this period is what all of us hope
it will be for the industry, that is, a fantastic opportunity
to lift tourism to a completely new level.
Q4 Chairman: You talk about the amount
of money that the Government spends on promoting tourism, but
perhaps one of the reasons for this perception is that you had
a tight public spending settlement like most Departments but instead
of looking for economies across the whole range of areas where
your Department spends money you chose to focus all the reduction
on tourism. There was a 20% cut in the budget of Visit Britain.
Why was that?
Andy Burnham: I didn't. My predecessor,
the Rt Hon Member for Stalybridge and Hyde, made that decision.
I say that only in jest. I do not walk away from the commitment
because I was Chief Secretary at the time and was involved in
those discussions with him on the other side. James Purnell took
a decision and it was one with which I agreed. It was in a spending
round when we did our best for the Department. I hope the Permanent
Secretary will be able to confirm that we achieved a good settlement
for the Department in a tighter spending review. James Purnell
took the decision that the right thing for DCMS was to concentrate
the resource it had on the cultural life of this country, that
is, the quality of our museums and galleries and the quality of
our sporting offer. In a tighter spending round you invest on
the ground in the tourism product and you invest in heritage.
We managed to give a modest uplift to English Heritage. One can
say that other areas can drive and boost the industry. We asked
tourism to take a look at itself and conduct a review, which the
Committee is aware is ongoing, and pose some difficult questions,
but sometimes that is necessary when you are operating in a tighter
spending round.
Q5 Chairman: Is that decision one
which will not be reversed?
Andy Burnham: It will not be reversed.
I note that it was not a unanimous report by this Committee. I
am disappointed that the Member for Shipley is not here this morning;
otherwise, I would have been able to have some succour and support
from him as a dissenter to the Committee's views on funding. Clearly,
it is a decision that is not lightly taken. The Department must
consider the right balance between its different priorities. In
the coming period we shall receive a huge amount of attention
that we do not have to go out and actively commission. The attention
of the world's media will be on this country. We focus our efforts
very much on emerging markets for tourism, which obviously is
part of the review, but I believe that when Boris Johnson receives
the Olympic flag in just over a month's time it will be a unique
opportunity for all of the DCMS world but tourism in particular.
We can make a further step change in terms of the image of this
country overseas and the number of people who wish to come here
before and after the games. I shall take a personal interest in
following through or addressing the concerns that the Committee
has tabled. I wish to reassure the industry that the facts show
that over 10 years this government has put its money where its
mouth is; it has doubled support for the industry in cash terms,
but with a revised structure it wants a period when the industry
can make some progress.
Q6 Janet Anderson: I know only too
well how you regard tourism; you understand its importance to
the British economy. I well remember the time when you and I produced
Tomorrow's Tourism, some of which I hope is still valid.
The report we produced recently was critical but we tried to be
fair. It reflected the evidence the Committee received. One of
the issues raised with us was the cost of visas and how it was
a disincentive to potential tourists from abroad. They looked
at the cost of getting a visa to come here and often decided to
go elsewhere. I was told yesterday that some other countries have
now been added to the list of those where visas are required.
Was DCMS consulted about that? You and I remember that this has
always been a bit of a problem. Many government Departments take
decisions on things like visas, for example, that affect the industry.
How much is DCMS consulted by other Departments when those decisions
are taken?
Andy Burnham: It is an important
question. I checked this point with officials before coming today.
They told me that there had been good engagement with the Home
Office on these issues. I was formerly minister at the Home Office
with some responsibility for these matters. Speaking from that
point of view I can clearly remember looking at the economic impact
on the country and thinking hard about getting the balance right.
We did consult other Departments. In respect of the more recent
changes there has been engagement and officials of the Department
tell me that they feel they have had the opportunity to express
to the Home Office the views of the industry. Obviously, the Home
Office balances those against a wider set of considerations to
do with the necessary investment in visa integrity, biometrics
and an immigration system that all of us as MPs know is under
challenge from other quarters. It is a question of balance, but
we do not believe it is hard for the voice of tourism to be heard.
We are able to make that case, but clearly it is something on
which we must keep an eye. The figures that I quoted to the Chairman
not long ago cover the period when visa charges were introduced.
While it is wrong to be complacent, it appears that it does not
have a major detrimental effect in attracting people to the country.
Q7 Janet Anderson: While on the subject
of reasons why people might not come here, one matter we mentioned
in our report was Heathrow. When we visited the States we were
told quite forcefully that one of the biggest obstacles confronting
people arriving from the US, which is obviously one of our most
important markets for visitors to this country, was Heathrow.
They were not talking just about Terminal 5 but about having to
queue and there appeared to be some emphasis on the retail opportunities
rather than the efficiency of getting people through. I know from
my own experience at Heathrow when flying to Manchester on occasions
just how difficult it can be. I wonder whether you have any input
on issues of that kind.
Andy Burnham: You are quite right
that ports of entry are really important for first impressions
of the country. In some senses I believe that the criticism coming
from the States is a little harsh. Sometimes I have waited longer
in queues to pass through US immigration rather I have in Britain.
You make an important point. Ruth Kelly has said things in the
recent past about improving the traveller experience at Heathrow.
To go back to my days in the Home Office and improving the immigration
system, I introduced at Heathrow what was called the IRIS project
whereby you could register your biometric in a meeting with an
immigration official. Now when you enter Heathrow you do not have
to queue up; you go straight through the biometric gate. I have
used that a few times recently and it is a positive step. You
can use improvements to the immigration system to aid the convenience
of the frequent and trusted traveller, if you like. You make an
important point. Terminal 5 has been, despite teething difficulties,
an improvement in the visitor experience at Heathrow, so there
are some signs of progress.
Q8 Janet Anderson: I am pleased to
know that you are thinking about that. We also mentioned in our
report Double British Summer Time and asked the government to
look at it again to achieve a consensus. What thinking is going
on within the Department about it? Yesterday evening the All-Party
Tourism Group, of which I am secretary, had a presentation by
BALPPA. They believed that the introduction of Double British
Summer Time would boost spending in the UK leisure sector by £2
billion a year. When we questioned them about where the £2
billion would come from they said that if we had Double British
Summer Time more people would choose to holiday here in the UK
rather than go abroad, so the money they might otherwise spend
abroad would be spent here. What is the thinking of the Department
about that?
Andy Burnham: It is certainly
something to think about. That is not something on which I have
come to a firm view. When I saw it in the Committee's report it
was an interesting suggestion. I want to think what the implications
would be elsewhere. What would it do for Rossendale and Darwen?
When would it be dark?
Q9 Janet Anderson: It would go dark
later. An interesting aspect of this is road safety because it
would mean darker mornings and lighter evenings. I believe that
some years ago an experiment showed that the number of accidents
in the afternoon and evening was reduced. During the day there
were overall fewer road accidents than previously, so there is
a road safety angle to this as well.
Andy Burnham: If you say that
it comes from the industry and there is support for it, it is
certainly an interesting suggestion. I do not want to appear before
the Committee and give the impression that it has been discussed
within government. To be truthful, it has not been as far as I
can aware, but if it is an issue that the Committee has tabled
we should give it consideration. The issue of dark mornings would
be important for people whose children go to school and there
are other safety considerations, but I shall certainly look at
it and come back to you.
Chairman: Certainly, from the evidence
we received the tourism industry attaches quite a lot of importance
to it, but I realise it is controversial and in that regard I
include the Committee.
Q10 Paul Farrelly: Perhaps I may
put three quick questions to do with sport. There seems to be
some uncertainty about the deal on the Olympic Village. Within
the £9.3 billion budget there is a specified level of funding
from the ODA to the Olympic Village. It is anticipated that the
balance will be raised in a private sector deal. Does the £9.3
billion and the contingency element included in it cover the possibility
of a greater public sector contribution through the ODA or otherwise
for the cost of building the Olympic Village?
Mr Stephens: Obviously, this is
the responsibility for the Minister for the Olympics, but the
short answer is yes. The report published on the basis of the
contingency drawn up last November set out the range of risks
that it was intended to cover and included among them were wider
economic and financial risks which would have an impact on the
project. The general economic situation is clearly one of those
risks.
Q11 Paul Farrelly: Were there to
be a greater public sector contribution than anticipated, the
amount of it would be fully allowed for by the contingency?
Mr Stephens: It is one of the
risks that the contingency was set aside to cover.
Q12 Paul Farrelly: Can you explain
to the Committee what contribution if any the Department has made
from its own budget to LOCOG in respect of its establishment and
running costs?
Mr Stephens: Fundamentally, none.
LOCOG is self-financing but is underpinned by the government guarantee
to the IOC. The only direct contribution over the lifetime of
LOCOG will be the one committed to at the time of the bid to meet
50% of the Paralympic costs which, from memory, come to about
£50 million from government. LOCOG is currently funded both
from contributions it has received from sponsorship and elsewhere
and loans backed by the government guarantee. While that is the
case the spending of LOCOG is counted as part of the public sector
and therefore appears as public spending within the various resource
accounts.
Q13 Paul Farrelly: Has the Department
made any loans to LOCOG which have then been paid back?
Mr Stephens: No.
Q14 Paul Farrelly: There has been
no funding or calls on guarantees?
Mr Stephens: No.
Q15 Paul Farrelly: And no cash flow
funding?
Mr Stephens: There has been no
cash funding and we expect to make none.
Q16 Paul Farrelly: My final question
is perhaps for the Secretary of State. We also published a report
on ticket touting which dealt not only with the activities of
traditional touting but also the secondary market. Can you tell
us the Department's thinking at the moment on this and what progress
has been made to address the concerns raised in the report?
Andy Burnham: It is a good report
in some senses in that it identifies the issues very well. I thought
the Committee could have been stronger in some ways about potential
remedies. There is a lot of concern out there particularly among
sports governing bodies about the activities of touts and the
impact they have on distribution policies. It is very difficult
to pursue a policy to keep ticket prices low and distribute them
widely through club networks and in other ways when there is a
large and thriving touting operation. We picked up a lot of what
the Committee said and agreed on a number of points, but I think
there is a case in relation to what might be called events of
national significance. As with the broadcast list, I think there
is an argument which says that people's ability to get into those
events live and not just watch them on television is important.
If everybody is to have that opportunity it means preserving the
ability to make tickets affordable and accessible in a well-functioning
primary market that can really get them out to people who deserve
to go. I am interested to see whether or not I can work with the
governing bodies or organisers of the big events here to pilot
arrangements for improving the operation of the primary market
and close down the activities of touts. I am not talking at this
stage about a legislative solution, but the thrust of our reply
is to ask: using new technology and the efforts of enforcement
agencies, can we create a situation where we have a much more
successful primary market and a reduced flow of tickets into the
secondary market? I think that is possible. I do not want to hold
it up as a paragon but Glastonbury has been quite pace-setting
in this whole arena. One of the things it has done is to put photos
on tickets. Perhaps that is a step too far for lots of sports
events, but I am fairly certain that we can do more with technology
to make the primary market function better and we can do more
on returns policies so that if tickets come back in they go out
again to people who deserve to go through their own involvement
in the sport, their loyalty to a particular club or whatever they
do as volunteers.
Q17 Paul Farrelly: I think the problem
is that some of us would have liked more bias in the report. Whether
or not the government would have taken that up is another matter,
but the report was prepared on the basis of a consensus and it
was a hard-fought process. One of the problems for us in the industry,
be it sport or music, is that it sees the government blow hot
and cold on this. There are warm words followed by not so warm
words. I know that the sports minister is sympathetic, and yet
the other week he gave a Parliamentary Answer to Questions in
which he stated categorically that the government would do absolutely
nothing and would not even move towards extending the so-called
crown jewels, for example, to which you referred.
Andy Burnham: It is a complex
area, is it not? The worst thing to do is to say that we will
come in. You need to work with the Society of Ticket Agencies
and Retailers to work on the code they have already put in place
and with the industry. There is a good deal of concern in the
music industry and in particular the sports world about whether
we can do this better. My whole approach is to see whether or
not we can run a couple of pilots perhaps in sport in particular.
Can we, using the support of various agencies, put in place some
really excellent arrangements in the primary market around events
of national significance to see if that works better in getting
tickets into the hands of genuine fans, keeping prices down and
avoiding a secondary market which essentially is money made off
the back of sport and music? If we can do that it will not require
legislation, but given that we protect the broadcasting of these
events I do not believe it is a massive leap of faith to say that
we should in some way give people every chance to see these events
live as well.
Q18 Paul Farrelly: Yesterday, we
all received pretty hard-hitting emails regarding the activities
of traditional touts from the O2 Arena, the Dome - for which we
were not responsible.
Andy Burnham: I was not in the
Department at the time.
Q19 Paul Farrelly: It was in 2001
and we had only just come in. A lot of these touts have convictions
for other criminal activities. If you made a sweep of touts more
proactively you might solve some wider problems. If we sent that
to you would your Department comment upon it?
Andy Burnham: Of course.[1]
I do not want to go into specifics, but there is some evidence,
which at this stage is anecdotal, that a lot of the ticketing
for a major sports event in this country is being done via Eastern
Europe and Russia in particular. Those suggestions were put to
me not long ago. I suggest that that is a different operation
working around the sale and resale of tickets to sports events.
This is an important area where there is a need for us to share
information but crucially to work with the governing bodies of
sport to get first-class arrangements in the primary market. Alan
Keen and I have been to major football events together where names
on tickets are quite common for European championships and particularly
the World Cup. There are things you can do to match people to
their tickets. Without wanting to load a huge burden onto sport,
I think we should begin to explore some of those things particularly
for big ticket national events.
1 Not printed. Back
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