Examination of Witnesses (Questions 180
THURSDAY 26 APRIL 2001
ANDERSON, MP, MR
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
(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.
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
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.
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 Britainthat is not London, that is not
the regionabroad. 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.
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