Select Committee on Culture, Media and Sport Minutes of Evidence

Examination of Witnesses (Questions 180 - 196)



  180. So do you support the bid for the £8 million that the British Tourist Authority would like?

  (Ms Anderson) We are in discussions with the Treasury about the bids that have been submitted by both the ETC and the BTA. The final allocation is, of course, a matter that has to be decided collectively by government. We will continue to discuss that with the Treasury and, as the Prime Minister said yesterday, there will be an announcement in the next few days.

  181. What is the delay?

  (Ms Anderson) We have to look very carefully at the business plans they have submitted. We are doing that now, and we will reach a decision in the next few days.

  182. You have had these plans quite some time now. They told us this morning that it was extremely urgent, not just a question of regaining future markets but actually shoring up the one that might still be there before many more businesses go bankrupt. What on earth is the delay?

  (Ms Anderson) It certainly is extremely urgent, but if we are going to allocate more public money to the funding of tourism, we have to make sure that that is going to be well spent, and that means we have to consider very carefully the business plans that have been submitted.

  183. Your Government has just provided over £62 million worth of government advertising in the first three months of this year. Surely, within that context, the £8 million that BTA want is a perfectly reasonable sum considering it is going to shore up four per cent of GDP.

  (Ms Anderson) I am very pleased the Prime Minister was able to announce more money yesterday, and we look forward to an announcement of how much in the next few days.

  184. But do you not think if your Government has spent £62 million on advertising other things, it should spend £8 million advertising Great Britain?

  (Ms Anderson) I think it is very important that the Government should advertise in all sorts of ways, to advertise what it does to help the people of this country. I think it is important that we have public money to support tourism. We are doing that, but we will always make the case for more, if a good case is made to us. That is why it is important for those business plans that have been submitted by the BTA and the ETC to be properly considered.

  185. But you have looked at those. Do you support them?

  (Ms Anderson) We are going to reach a decision in the next few days.

  186. You said earlier that the 6 March meeting was going to be in the diary anyway, and it was not actually a response to foot and mouth. Is that right?

  (Ms Anderson) The 6 March was the annual tourism summit. The first FMD summit was actually about a week later, on 15 March, because we had had a report from Elliot Morley, the Minister at MAFF, at the annual ministerial summit, about the foot and mouth situation, and at that stage we were still not sure of what the effect was going to be on the tourism industry because we were not sure how long it was going to go on. When we realised quite quickly after that that we were in for a fairly long haul, that was when, on 15 March, we did our own foot and mouth tourism summit, the Secretary of State and I, at DCMS.

  187. So it never crossed your mind that pictures of animals burning in the United Kingdom could actually have an impact on the foreign market?

  (Ms Anderson) It did cross our mind and that is why I went on a visit to the States as soon as we realised the effect it was having.

  188. How long after was the visit to the States?

  (Ms Anderson) It was two days.

  189. How long after the crisis had broken out did it take you to go to the States?

  (Ms Anderson) We went to the States on 19 March, which was four days after the FMD summit at DCMS.

  190. So about one month into the crisis.

  (Ms Anderson) As I say, at the beginning none of us had a crystal ball, none of us knew how long it was going to go on. As soon as we realised that it was going to be potentially serious for the tourism industry, we took action.

Mrs Golding

  191. You and I were both at the reception in the Jubilee Room last night and you spent a very long time there. What I was picking up was that though people knew there was help available, they did not know how to access it. Is there a need for a one-stop shop for information and could this be arranged?

  (Ms Anderson) I think that is now happening.

  (Mr Leonard) Yes. DTI are now providing a single focus for the business needs of individual businesses, where they can find advice on what they can do. There is lots of other advice available too, and we are bringing that together, with the assistance that is available through other measures, such as through the Regional Development Agencies and Inland Revenue. It is all coming together. It is very easy to access that advice at the moment.

  192. How do they access it? People there last night did not know.

  (Mr Leonard) I am sorry to hear they did not know, and I hope they feel free to contact any of the helplines which are very widely broadcast at the moment. But a lot depends on what they need. If they need some specific advice on a specific point, for example, on taxation, the Inland Revenue helpline has been very busy recently and has helped 3,217 businesses by agreeing to defer £28 million in tax, VAT and National Insurance, for example, since the crisis began. If a business has an interest in rate relief, obviously that is for the local authority. You can make the links between all of these at the moment, but we are still working with other government departments on making it even clearer.

  (Ms Anderson) I think in the early days there was a problem. I am not denying, Mrs Golding, that there is not still a problem about getting the information out to people, but it is clear from the figures Mr Leonard has quoted that people are increasingly aware of what is available. I know the tourist boards in the regions and more locally are trying to get the information out, and certainly in Cumbria the tourist board has done a lot to get the information out. I do not deny there is probably more we can do. It is clear that people are now getting in touch with the Inland Revenue to defer PAYE and National Insurance, and they are getting in touch with Customs & Excise on VAT. There has been a lot of misinformation out there about interest payments. The Inland Revenue is not going to charge interest on deferred payments of PAYE or National Insurance, and the Customs & Excise are not going to charge interest on deferred VAT. The other misinformation that seemed to be doing the rounds was to do with the Small Firms Loan Guarantee Fund, into which the Government has put another £120 million to underwrite loans of up to £250,000 to these businesses that are affected. There were reports circulating that this was no good because the banks were going to charge 8.5 per cent interest. The situation is that the Government has said it will not underwrite any loan on which a rate of interest greater than 8.5 per cent is charged, but it is perfectly open to people to negotiate with the banks lower rates of interest, and we are encouraging the banks to be sympathetic to that.

  193. Finally, to the future. There have been problems about the quality of some of the hotels in this country, and also about the cost of them. What is going to be done in the future about looking at the quality of hotels and the training of the staff?

  (Ms Anderson) I think that is absolutely key, and we have at the moment a voluntary accommodation grading scheme which the English Tourism Council, the AA and the RAC are co-operating on. It is stars for hotels and diamonds for guest houses. Around 50 per cent of our accommodation providers are now in that scheme, but we need to make much better progress. On training, Springboard, which deals with the tourism and hospitality industry, does some excellent work and they get lots of money levered in from the private sector. For example, the Savoy Educational Trust is always working with them to try and do something about raising the level of skills. As the English Tourism Council said, one in four of all new jobs created in the last ten years has been in tourism, hospitality-related activities. We have to make sure the training that people give and the courses that people go on at their local colleges are all up to scratch. That is something we are discussing with the DfEE. We do that all the time. Quality is key. If I can finish by mentioning one particular seaside resort, that is Morecambe. They took a very brave decision to pull down 25 per cent of their B&Bs, the inferior accommodation, and to replace it with open spaces. Morecambe really is on the up and up. It is helped by the statue of Eric Morecambe as well and the Rare Bird Trail. That gives you an example of the kind of decisions people are prepared to take because quality is key. In terms of cost, increasingly as we have those chains such as Travel Inns and Travel Lodges and so on, which are not luxurious, but they are clean, though very basic, people know what to expect, at a reasonable price. They, I hope, as we have more and more of them, will help to keep prices down.

Ms Ward

  194. Minister, I am sorry to come back to the point that I raised earlier about funding the BTA. I do realise that government is recognising the problems and putting in the additional money now. My point is about the strategy and the funding of BTA. You have said there was no proposed reduction in funding. In the Department's own annual report for BTA, the grant in aid for 1999-2000 is £36 million, for 2000-01 £37 million, 2001-02 right through to 2003-04 is down to £35.5 million. There is no doubt that there is a small increase between 1997 and the current date, but the forecast is for a reduction in the funding. Even with the additional income that you have rightly talked about that BTA are able to get from other sources, they will have a reduction in their income between 1997 and 2003, where it stood at £50.3 million in 1998-99, down to £49.5 million in 2003-04. Is that not the wrong way for us to go about boosting tourism, by cutting the BTA's budget?

  (Ms Anderson) I will ask Mr Broadley to come in here. I think part of the reason for this is the funding which goes to London, which now goes to the GLA.

  (Mr Broadley) Yes, it is the whole reason. The BTA was given money which was automatically passed to the London Tourist Board in the past. With the creation of the GLA, this money is now going to the GLA, so it looks from the table as though the money has disappeared from the budget but it was not part of BTA's core expenditure in the first place. That is the answer to the question on the £35.5 million.

  (Ms Anderson) What was your other question?

  195. My point is though it still looks as if BTA have a smaller budget when they are trying to market Britain abroad than they have had. Only now are we giving them additional money to deal with foot and mouth disease and the problems around that. Even with the London element taken out they still have less money to market Britain—that is not London, that is not the region—abroad. That is not the right strategy for us promoting tourism and recognising how important it is to our economy.

  (Ms Anderson) As Minister for Tourism, I am always ready to argue for increased funding, and that is why I very much welcome what the Prime Minister said yesterday, that there is going to be extra money. There is no doubt the initial £6 million extra allocation has helped and we look forward to an announcement in the next few days of an additional allocation which I know will be welcomed by everyone.

Mr Fearn

  196. I would like to end on a happy note. The greatest picture of survival of tourism and farming comes from this little calf which escaped the pyre. Everybody, at home and abroad, is talking about this one little aspect. Are you going to use it? I hope you will put out the word. The Prime Minister has seized on it by allowing this little calf to survive and not be slaughtered. It is the greatest thing that has happened in tourism for a long time.

  (Ms Anderson) I hope very much that, as Phoenix appears to have risen from the ashes, when this is all over we will have a re-invigorated and more successful tourism industry in this country.

  Chairman: That was sweet. Thank you very much indeed.

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