Select Committee on Culture, Media and Sport Fourth Report


The timeliness of the response

54. Despite the obvious impact of the measures taken to prevent the spread of disease on the prospects for rural tourism and despite the sensational aspects of the media reporting of the crisis, public authorities failed initially to appreciate the severity of the crisis for tourism. Ms Mary Lynch, the Chief Executive of the ETC, admitted that "the message people had in the first week or two was this was an agricultural problem and a problem which was being handled by MAFF ... we did not understand the scale of the problem we were about to deal with and the tentacles of the impact".[115] Ms Anderson told us that Ministers initially judged that the effect on tourism would be limited if the disease were brought rapidly under control. Ms Anderson said that, as late as 15 March, "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".[116]

55. We did not find the defence that we heard from the ETC and from the Minister for the apparently slow response of public authorities concerned with tourism wholly convincing. There can be no doubt that, as we have already noted, the disease proved more widespread and harder to control than was initially foreseen. However, once the impression had been instilled by public authorities and by the media that the public interest was somehow best served by outsiders regarding the countryside as closed for business, there was bound to be a very considerable impact on tourism. This impression was not alleviated by the content of the newspaper advertisements placed by the Department of the Environment, Transport and the Regions informing the public of measures to be taken in visiting the countryside. The impact on tourism was not simply a result of the duration or severity of the outbreak itself.

56. At the present juncture, it is not possible to examine whether and why the Government and other public authorities were slow to respond adequately to the implications for tourism of the outbreak of foot and mouth disease. It will be essential subsequently to examine this issue in detail, not least to ensure that appropriate lessons are learned for the future organisation of public sector support for tourism and Government sponsorship of the industry.

Tourism promotion and information: initial activities

57. As the scale of the problems confronting the tourism industry became evident, it also became apparent that the single most important priority for almost all tourism businesses was to attract visitors. The emphasis of public information was switched from a message that the countryside was closed to one that Britain was open for business. The latter message has gradually been expanded, but, as the BTA observed, there have continued to be problems in striking the right balance between the need to convey information necessary to prevent the spread of the disease and the wish to promote tourist destinations.[117]

58. The Government, the ETC, the BTA, local authorities and Regional Tourist Boards have been working to ensure that the information now available to tourists is accurate and widely available. On 22 March, the ETC launched a telephone hotline to steer callers to sources of further information such as Regional Tourist Boards and Tourist Information Centres. Many other organisations have introduced tourist telephone help-lines.[118]

59. The Regional Tourist Boards have developed new leaflets and radio and press advertising campaigns to get a "responsible message to the public whilst stimulating additional visits to suffering businesses in the countryside".[119] Tourist Information Centres have provided local information for visitors, and have also provided feedback from visitors for local authorities, Regional Tourist Boards and the ETC.[120]

60. Web sites have been used by the Government, local authorities, Regional Tourist Boards and other organisations to provide information about foot and mouth and advice for tourists and potential tourists.[121] The BTA was entrusted with responsibility for the very rapid creation of a new web site——that was launched on 4 April, that features a searchable database of attractions and events and that demonstrates that the vast majority of attractions are open as normal.[122] The establishment of the web site was part of measures to switch the emphasis from stressing what was closed to stressing what was open.[123] It serves as a gateway to local information prepared by Regional Tourist Boards.[124] The web site has been widely used and, according to the Council for Travel and Tourism, has assisted in improving greatly the quality and accuracy of information available to the public.[125]

61. The tasks of providing information to potential visitors from abroad and of promoting the message that Britain is open for business have fallen to the Foreign and Commonwealth Office, the British Council and the BTA.[126] The most urgent task for these organisations has been to correct misconceptions about the United Kingdom as a visitor destination.[127] The BTA has prepared a three-step strategy for responding to the situation.[128] The first priority was to disseminate accurate information about what it is and is not possible to do and see in the United Kingdom.[129] This phase has been characterised, aptly if ironically, as one of "fire-fighting".[130] The second phase of "mid-crisis activity" will involve market research and tactical advertising campaigns in particular markets.[131] The third phase of activity will involve the re-branding and re-marketing of Britain as a tourist destination.[132]

62. The Foreign and Commonwealth Office has been engaged in what it terms "an intensive public diplomacy campaign to promote the message that Britain is open for business and to correct misunderstandings about foot and mouth disease".[133] The Foreign Office has been particularly active in the United States of America, where such misunderstandings seem to be especially prevalent.[134]

63. The BTA's network of offices in 27 overseas markets has been dealing with thousands of enquiries every day and providing regular reports on the perception of the problem viewed from various overseas markets.[135] To support its own endeavours, the BTA has also appointed a global public relations agency to work to minimise the negative perceptions in the short-term and, in the longer term, to help rebuild the British image.[136] Mr Jeff Hamblin OBE, the Chief Executive of the BTA, justified the appointment of an outside agency on the grounds that the scale of the current task made demands that were beyond the Authority's existing staff resources.[137]

64. The message that Britain is open for business has also been promoted through a series of overseas visits by Ministers, designed in considerable measure to gain access to the local media.[138] Ms Anderson visited New York from 21 to 23 March to seek to overcome confusion about the nature of foot and mouth disease and to stress that the United Kingdom was a perfectly safe destination for tourists.[139] This has been followed by visits by other Ministers to Spain, Belgium and Canada.[140]

65. One of the most conspicuous activities undertaken by the BTA has been the World Travel Leaders' Summit, which brought 40 travel industry leaders from around the world to see the impact of foot and mouth disease for themselves from 17 to 20 April.[141] This event cost around £100,000, but was regarded as a highly worthwhile investment by the BTA. The event demonstrated to participants that most activities previously undertaken by overseas visitors could be undertaken at present.[142] It generated enormous domestic and overseas media coverage.[143] Each of the participants agreed to serve as a tourism ambassador for Britain upon their return and the BTA saw early signs that this was paying dividends.[144] Ms Anderson considered that the World Travel Leaders' Summit had been "a great success".[145]

66. The work already undertaken by various public authorities to highlight the extent to which tourist destinations are open for business has been commendable, but it is important not to exaggerate its positive effects. By and large, it has brought the most benefit to areas of tourism that were least affected by the outbreak of foot and mouth disease and to attractions that remained open for business or re-opened for business and were able to provide a reasonably normal service. Exhortation alone will not help those areas where tourism has been most profoundly blighted by the outbreak of foot and mouth disease.

Opening up the countryside

67. The first priority for the recovery of the rural tourism industry has been to re-open the countryside.[146] That process has started and even in areas badly affected by foot and mouth disease some footpaths and rights of way are being opened.[147] The assessment of risk on which the decision to re-open a footpath is based has been informed by landowners and veterinary advice.[148] The Government has made £3.8 million available to the Countryside Agency to enable it to assist local authorities and the National Parks to accelerate the process of re-opening rights of way.[149] In Cumbria, the local authority and tourist board worked with MAFF, land owners and representatives from the Lake District National Park to ensure that as many footpaths as possible were open in time for the Easter bank holiday.[150] Mr Jenkinson, Chief Executive of Devon County Council, said that "one of the messages we try to put out is that much still is open for business. However, there is a great swathe, not least because of Dartmoor, that effectively tourists can no longer use in the way that they have used it in the past."[151]

68. While there has been some success in re-opening significant parts of rural Britain, there are many areas that remain closed or where movement is restricted to the detriment of the tourist experience. Several organisations pointed out that the reality of a countryside open for business must match the rhetoric; inaccurate information about access to the countryside is counter-productive.[152] The Council for Travel and Tourism stated that the Government's message that the countryside was open was "far too bland and unconvincing", and that, when that message was first used in late March, it "was clearly not consistent with actuality—most areas of open countryside and many attractions remained closed, thus creating confusion in the minds of the public".[153]

69. For some rural areas tourism revival is dependent upon real progress in opening up the countryside. This is the case particularly, but not exclusively, in directly affected areas. In such areas, there is a crucial need for early and accurate information about when affected areas can re-open in order that tourism promotion activity can be launched at the right time. Cumbria County Council told us that it was pressing for information on when it will be able to re-open areas that have been directly affected, such as areas where livestock had been culled.[154] A similar case was put to us forcefully during our visit to the Forest of Dean, where Forest Enterprise and MAFF are still unwilling to make any commitment to a timetable for re-opening. Cumbria County Council described the difficulties involved in balancing the interests of disease prevention, land owners and the tourist industry and said that it was essential that "risk limitation and evaluation [and] the economic case" be considered alongside one another.[155]

Additional funding for the BTA, the ETC and Regional Tourist Boards

70. The activities already undertaken by the BTA, the ETC and the Regional Tourist Boards and the measures that they plan to take in the rest of this year require expenditure beyond the capacity of their existing budgets. The BTA's recovery strategy is based on a clearly-costed business plan. The total cost of the plan of activities in 2001 taken as a whole is £22.5 million. The BTA saw this sum as the "least ... amount required" in order "to undertake a serious and effective recovery campaign for Britain's inbound tourism industry this year".[156] The bid for these funds was presented to Government in mid to late March.[157] The total budgetary requirement for £22.5 million fell into three parts equating to the three phases of the recovery strategy: £4.3 for immediate activities; £8 million for tactical promotion; and £10 million for longer term activity.[158] The first phase of activity was funded by an initial Government grant in late March of £2.2 million, together with a sum of £2.1 million that the BTA was able to carry over from its budget for 2000-01 into the new financial year.[159]

71. When the BTA gave oral evidence on 26 April it left us in no doubt as to the pressing need for the next instalment of the total grant of £22.5 million that it considered it required. That partly reflected the view the BTA had formed that it was possible to move from the initial phase of rebuttal to a more active marketing phase.[160] More importantly, it arose from the realisation that, unless the second tranche of £8 million was available very shortly, it would be too late to market Britain as a tourist destination for the coming summer season. As Mr Hamblin put it, "I think we are in grave danger, unless we can move quickly, and by that I mean within the next few days, of losing the summer season".[161] Mr Donoghue of the BTA called the timetable for a decision "critical and very short".[162]

72. Similarly, the ETC prepared a costed recovery plan on the same timetable with a total requirement of £35.5 million.[163] This proposed investment is intended to support promotional activity, business support and measures to improve the quality of the tourism product. Of the total requested in March, the ETC has so far received only £3.8 million to implement short-term measures. Of this figure, £1.4 million was immediately provided to Regional Tourist Boards, although the expenditure already incurred by them in connection with the crisis far exceeds this amount and the penny packets of public funding so far provided to the Regional Tourist Boards do not reflect the scale of the task that faces them.[164]

73. In oral evidence on 26 April Ms Anderson accepted that the need for the further injection of funds was "extremely urgent".[165] Both Ms Anderson and the BTA took comfort from the statement made by the Prime Minister the previous day that "there is ... more money that will be allocated to them [the BTA and the ETC], which we will be announcing in the next few days".[166] On 30 April the Secretary of State for Culture, Media and Sport accepted that the BTA itself was best-placed to judge when further promotional work ought to be undertaken.[167] We have already noted that the BTA stressed repeatedly on 26 April that it needed additional funding within a matter of days to undertake effective promotion for the summer season.

74. On 2 May, the Government announced its response to the costed plans submitted by the BTA in March. It was stated that an additional £12 million would be provided for the BTA.[168] This should be enough to fund that body's immediate tactical promotion needs, although it is not yet clear whether further funding will be available for the longer term promotional plans of the BTA.

75. As matters stand, it appears that no additional public funding will be available in the immediate future for the ETC or for Regional Tourist Boards. We find this astonishing. That approach calls into question whether the Government has fully grasped the extent to which publicly-funded marketing and promotion represent one of the few specific aids for tourism businesses in affected areas that are struggling to survive the current crisis. We return to the longer term case for marketing England as a tourist destination later in this Report.

Financial and other support: the short-term

(i) The rural task force and the Government's current approach

76. On 14 March, the Government convened a new Rural Task Force to examine the effect of the outbreak of foot and mouth disease across the rural economy. Following the second meeting of the Task Force, the Chairman of the Task Force, the Rt. Hon. Michael Meacher MP, made a statement to the House of Commons on 20 March 2001 outlining a preliminary package of measures being taken by the Government and other bodies to counter the financial hardship imposed by the outbreak. These measures included promises of a sympathetic and flexible approach by Inland Revenue and Customs and Excise officials, proposals for loans and extended lines of credit and an increased central contribution to rate relief.[169]

77. By the end of April, the Department for Culture, Media and Sport had posted advice on its web site for tourism businesses affected by foot and mouth. The document lists, under five headings, the Government's measures to assist tourism businesses affected by foot and mouth. First, businesses are advised to contact their local authority to apply for rate relief measures. Second, businesses are advised to contact the Inland Revenue and Customs and Excise help-line for information about deferral of tax or National Insurance contributions. Third, businesses are advised to contact their bank manager to discuss extended lines of credit or capital repayment holidays. Businesses may also apply for loans of up to £250,000 by contacting the Small Business Service help-line. Fourth, Regional Development Agencies will receive extra funding in the four worst affected areas, which will support tourism promotion and local recovery. Tourism workers in Devon and Cumbria who have lost their jobs are also advised to contact their local job centre for information about Rural Skills Action which will provide skills training. Fifth, advice is available through job centres or the Benefits Agency about assistance available through the social security system for those individuals or businesses affected by foot and mouth.[170]

78. We examine some of these elements in more detail, but this listing of the sources of assistance within the machinery of Government serves to highlight one of the fundamental problems that was highlighted again and again during our inquiry, namely, that affected businesses would like a single point of contact when faced with the complex bureaucracy of Government. We recommend that the Government as a matter of urgency appoint a coordinator of all Government activities for the areas most deeply affected by the outbreak of foot and mouth disease reporting to the Cabinet Office. We emphasise that this is for a limited number of areas that require specific attention beyond measures focused on regions.

(ii) Rate relief

79. The Government has made preliminary announcements about increasing the Government contribution to rate relief. We have not explored the impact of these measures on tourism businesses in any detail, and some of the tourism businesses that we met were sceptical as to whether these measures would prove significant in view of their timescale. Some local authorities are taking the initiative to provide relief for businesses in the greatest need even when their exact circumstances may not conform to the requirements of the Government scheme. It will be important for the Government to clarify as soon as possible the additional assistance that it will offer to local authorities in the most affected areas that provide assistance to businesses not conforming to the Government scheme.

(iii) Loan schemes

80. The Government has sought to put in place various loan schemes for businesses in affected rural areas. Ms Anderson sought to emphasise that the interest rate of 8.5 per cent associated with this scheme was the maximum level that the Government would underwrite and that this need not imply that such loans could not be secured at a lower rate of interest.[171] We have spoken to many businesses that see little value in loans at a time when they see small prospect of being able to repay them. However, for some other businesses, it is clear that they have no prospect of securing a bank loan and would anyway only be interested in a scheme that guaranteed interest free loans. We believe that interest-free loans should be an option for small businesses.

(iv) Employment

81. Advice on employment issues for tourism businesses offered on the web site of the Department for Culture, Media and Sport concentrates on measures for those who have lost their jobs. This accurately reflects the reality that a great many people have already lost their jobs as a result of this crisis. There is a danger that many more will lose their jobs in the coming months, particularly as the winter approaches and tourism businesses find that they have not been able to develop sufficient reserves in the summer months to enable them to keep employees during the winter months. We recommend that the Government examine the case for a job retention subsidy for the tourism industry in the most adversely affected areas to ensure that vital skills are not lost to those areas and possibly to the country for good.

(v) VAT

82. For many tourism businesses, VAT payment and administration represent a burden at the best of times. There is concern in the tourism industry that levels of VAT on many activities relating to tourism are at a higher level in this country than in other countries with which British tourism competes for business. We have heard many pleas for reductions in VAT, possibly limited to businesses below a certain size and possibly for a set period of time.

83. There are problems with viewing VAT changes as part of the solution to the current crisis. Many of the tourism businesses most adversely affected at the moment operate below the VAT threshold. Further, any changes to the VAT régime might have to be national in nature and not geared to the worst affected areas.

(vi) Public subsidy

84. According to the Council for Travel and Tourism "the speed and ease with which full financial compensation has been made available to farmers affected by foot and mouth contrasts starkly with the lack of support offered to tourism and other rural businesses similarly affected".[172] Northumbria Tourist Board stated that "rural tourism businesses have been increasingly unhappy with the level of support offered (especially in comparison to agriculture)".[173] We can confirm the accuracy of this observation from discussions held during our inquiry.

85. There are several possible sources of direct public support for tourism. The ETC's tourism recovery strategy envisaged Regional Tourist Boards being able to undertake such a role, although there are no signs whatsoever of the funding being made available to make this possible.

86. Additional resources have been provided to Regional Development Agencies in affected areas in response to the foot and mouth crisis. Funds from this source could offer a lifeline for some tourism businesses. However, it is not yet clear how far those funds will be devoted to tourism businesses—in part because there is no consistent pattern of responsibility for tourism by the Regional Development Agencies—or whether the Regional Development Agencies possess the expertise and understanding of tourism needs across their regions to optimise use of such funds.

87. The fundamental problem for the tourist industry is that it has no tradition of relying on public subsidy in the same way as certain other industries in rural areas. Because of this, there is no clear network to distribute specific funds that would be available and no established mechanism to calculate need. Cumbria Tourist Board proposed that consideration be given to a compensation scheme along the lines of that used following an oil spillage in west Wales.[174] This proposal has the particular merit of enabling any scheme to be geared to the level of local impact. However, we consider it vital now to establish a mechanism for such support for both the immediate and the long-term future. Arrangements for Scotland, Wales and Northern Ireland, though not perfect, seem effective. The same is not true for England. There is in England a proliferation of organisations that have the word tourism in their title. There is, however, no specific and coordinated policy for tourism in England.

88. We believe that it is essential that the Government institutes a more effective way of bringing about more cohesiveness. The main reason why the farming industry ensured its problems were considered quickly and effectively was because the body representing it, the National Farmers' Union, was not only the voice of the farmers, but is appointed by the farmers themselves. The tourist industry's voice was that of bodies appointed by the Government—a top-down process. We met people from the small end of the tourist industry. They all felt that they were not able to be heard by those with influence to assist them.

89. We recommend the immediate creation of a National Tourism Corporation for England, operating on the model of Urban Development Corporations established in the 1980s. This Corporation would be able to develop and implement a tourist strategy. It would have direct powers to distribute funds to areas in most need, in consultation with but not through the English Tourism Council, Regional Tourist Boards and Regional Development Agencies.

(vii) Lottery funding

90. Several Lottery distributing bodies are funding or may fund projects relating to the tourist industry in affected areas. It is essential that the Lottery distributing bodies respond sensitively and as generously as possible to the additional needs of such projects arising from the current crisis in rural tourism.

(viii) Government coordination

91. Our consideration of the particular problems of the tourist industry has highlighted the continuing need for the involvement of many Government Departments and agencies in actions to tackle the problems of affected rural areas. It will be vital to ensure these activities are effectively coordinated after the focus switches from the control and eradication of the disease to tackling the wider economic impact of the outbreak. We recommend that a Minister in the Cabinet Office be charged with responsibility for coordination of all Government involvement with assistance for rural communities and businesses affected by the outbreak of foot and mouth disease beyond the immediate impact on farming.

(ix) The British media

92. Finally in this section, although our comments cannot take the form of a recommendation, we think it appropriate to make some remarks about the role of the media. The media have shown some interest in the plight of tourism businesses affected by the crisis. However, there can be no doubt that the sensationalist elements to some media reporting have contributed to the scale and severity of the crisis that now afflicts tourism in this country and rural tourism in particular. While the focus of media attention will move elsewhere, it would be helpful if the media could see it as a continuing responsibility to examine the fate of tourism businesses in the coming months and to ensure that the media play their part in promoting domestic tourism. For a great many businesses, the free publicity from media coverage is the only promotional activity that they will be able to afford in the foreseeable future. The foot and mouth crisis has provided the press with a great deal of vivid copy and a large number of human interest stories. The press might now usefully consider, without in any way jeopardising its right to freedom of expression, whether it should now repay that debt by publishing positive stories that could attract tourists.

115  Q 113. Back

116  Q 186. Back

117  QQ 11, 13. Back

118  Evidence, pp 74, 119, 120, 131. Back

119  Evidence, p 120. Back

120  Evidence, pp 76-77, 79. Back

121  Evidence, pp 73, 74, 119, 120, 131. Back

122  Q 13; Evidence, p 2. Back

123  Q 33. Back

124  Evidence, p 70. Back

125  Evidence, pp 51, 106. Back

126  Evidence, pp 57-58. Back

127  Evidence, p 58. Back

128  Evidence, pp 4, 59. Back

129  Evidence, p 4. Back

130  Evidence, p 98. Back

131  Evidence, p 4. Back

132  Evidence, pp 4, 59. Back

133  Evidence, p 131. Back

134  IbidBack

135  Evidence, pp 2-3. Back

136  Evidence, p 3. Back

137  QQ 14-16. Back

138  Evidence, p 59. Back

139  Q 151. Back

140  Evidence, pp 3-4. Back

141  Evidence, p 59. Back

142  HC Deb, 25 April 2001, col 365; Q 3. Back

143  Evidence, p 3. Back

144  Q 18. Back

145  Q 151. Back

146  QQ 76, 157. Back

147  QQ 78, 79, 155; Evidence, pp 88, 106. Back

148  QQ 78, 79, 109. Back

149  Evidence, pp 87-88. Back

150  Q 80. Back

151  Q 76. Back

152  Evidence, p 129. Back

153  Evidence, p 106. Back

154  Q 77. Back

155  QQ 79, 108. Back

156  QQ 1, 42, 43. Back

157  QQ 11, 156. Back

158  Evidence, p 4. Back

159  Q 1. Back

160  Q 3. Back

161  Q 12. Back

162  Q 45. Back

163  Evidence, p 51. Back

164  Evidence, pp 83, 73. Back

165  Q 182. Back

166  QQ 149, 2; HC Deb, 25 April 2001, col 297. Back

167  HC Deb, 30 April 2001, col 626. Back

168  Department for Culture, Media and Sport press notice 153/01, 2 May 2001. Back

169  HC Deb, 20 March 2001, cols 191-192; see also press release from the Department of the Environment, Transport and the Regions, 163/01, 22 March 2001. Back

170  Department for Culture, Media and Sport web site, Back

171  Q 192. Back

172  Evidence, p 106. Back

173  Evidence, p 74. Back

174  Q 75. Back

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