MR TONY BIRD, MR RICHARD TOBIAS OBE AND MR IAN REYNOLDS

TUESDAY 19 NOVEMBER 2002

  120. In your submission you make a lot of play about regulation. You say, "The Alliance remains to be convinced of the Government's commitment to deregulation in practice." You say that ". . . between May 1997 and December 2001, some 101 pieces of legislation have had an impact on the hospitality sector with a further 27 pieces of legislation, regulation or statutory instruments in the pipeline." I am somewhat unconvinced by this argument, because whenever I hear a list of 101 pieces of legislation 101 always sounds a bit round. You then mention, for instance, the Alcohol and Entertainment Licensing Bill is expected and you say that this is going to have a major impact on the sector. Presumably it is going to have a positive impact on the sector. So some of the legislation and the regulation that you are complaining about, presumably, is positive?
  (Mr Bird) Yes, and I do not think we are necessarily saying otherwise, we are just citing that there is a considerable amount of legislation which businesses have got to absorb; some of it may be positive but a lot of it is not necessarily the case, and the totality of it is very considerable, particularly upon small businesses, but large businesses as well.

  121. You say ". . . the ever-increasing volume and complexity of legislation". This seems to be one of your major charges against the Government, that basically the Government legislates too much and it should leave you alone to get on with the business because the market alone best provides. That seems to be the thrust of your argument. I would suggest it would make a better and more honest argument if you were to say which pieces of legislation you think should not have been passed.
  (Mr Bird) Certainly individually that would be possible. I am not in a position to cite individual pieces at the moment.

  122. You say ". . . 101 pieces of legislation and another 27 . . .". You must know what these 27 pieces of legislation are that are about in the pipeline at the moment that you object to.
  (Mr Bird) That is there as an illustration of the totality of legislation which is impacting upon the industry.

  123. You are just saying "There is a lot of legislation and that is terrible. There should be less legislation because it impacts on us", but you are not prepared to say which bits of legislation you do not think should have been passed in the last few years. You may well, indeed, be including in the 101 pieces of legislation pieces of legislation that were actually repealing more onerous legislation that existed before.
  (Mr Bird) I accept that is a possibility.
  (Mr Reynolds) Can I just interject there? You picked on something which admittedly is in our report but this is not something that we spend a lot of time at our meetings discussing. We would not want you to think that this is a major plank of our concerns. That is for noting. It is more because our business is so much composed of small units that the effect is disproportionate.

  124. One of the other things you talk about is product innovation. I guess some people might characterise the British tourism industry as plagued by poor standards, rapacious owners, high prices and appalling working practices. Do you think that is fair?
  (Mr Tobias) Some may say that. I certainly would not agree, although there are some elements of all of those that I would recognise in some outlets. The answer to your question is I would not agree with that view. There is certainly enormous scope for improvement, and during the past ten years there has been improvement and we are working very hard on that. The picture that Britain provides poor value for money is not one that I would necessarily sign up to, although I would acknowledge that Britain is a high-cost destination. The two are not necessarily the same.

  125. In your piece about production innovation, which I presume means improving the quality of the hotels and the whole of the industry, you seem to say, basically, that this is the Government's responsibility and not yours. You say "The industry needs action by Government".
  (Mr Tobias) I am not sure that I would necessarily term it in those words. It is certainly not the Government's job to increase our productivity level or our effectiveness or the quality of the product. We would certainly look to Government—and in an earlier answer I suggested that legislation was part of the answer—to support our efforts to increase quality. My view is very clear, that it is a joint effort between the industry and government, but with a major responsibility on the industry to improve standards. We have been improving standards, we continue to improve standards and I acknowledge there is some way to go.
  (Mr Reynolds) I think the specific thing we had in mind here was a reduction in VAT on the refurbishment of properties, which would be helpful to the tourism industry, clearly.

  126. You refer to the varying VAT regimes in other European countries.
  (Mr Reynolds) Indeed.

  127. So, for instance, when you stay in Spain there is a seven per cent rate or, for a luxury hotel, 11 per cent rate of VAT as opposed to whatever VAT is in Spain, 21 per cent, I think.
  (Mr Tobias) It is only Denmark which is higher than the UK. We are the second highest in the Union, which does obviously add to our costs and helps to make us less competitive than we would like to be.

  128. When we had the British Tourist Authority before us they said that one of the issues that faced the British tourism industry in terms of bringing businesses into the UK—and ABTA also represents people who take British tourists abroad—was that many long-haul visitors were beginning to think about whether they should visit the eurozone and Britain, and many eurozone people were thinking "Oh well, that is another two per cent on the cost of my holiday because I am going to have to change my money". Do you think that joining the euro would make any difference to Britain's tourism industry?
  (Mr Tobias) As the Tourism Alliance we do not have a collective view. As a representative of British Incoming Tour Operators' Association we have been surveying our members annually for the past five years, and there is overwhelming support in their belief—that is our members' belief—that joining the eurozone at a competitive rate would be an advantage to their business. That is the only question we asked them, it was not a political question, it is simply on their business and their business opportunities. Overwhelmingly—and by that I mean 74 per cent this year—they believe that joining the eurozone would benefit their businesses.

  129. Are you aware that you are beginning to sound faintly absurd? Right at the beginning you argued and argued for a Cabinet position, yet you already have somebody who is representing you at Cabinet level. To suggest one industry has a Cabinet member is really silly. If we move on to talking about other countries having ministers, when we asked you to give us an example of a good practice minister you cannot give us one. It is absurd. You are coming here and saying "Other countries have ministers" and you cannot give us one good example. You want this regulatory burden lessened, but my colleague admirably demonstrated that some of the regulation actually you would be in favour of and some you would not, but when we said "Give us an example, give us an example", you said "We have not thought about it very much actually; there is a little bit in our report." What we are left with here? Not a huge amount, I would suggest to you. Do you take any responsibility for the fact that the industry only got itself together to have yourselves because of the awful situation it was put in last year? What on earth was it doing to help itself?
  (Mr Bird) Prior to that?

  130. Yes, prior to that.
  (Mr Bird) Prior to that there were all the bodies that currently exist. The CBI itself submitted a number of papers to Government—

  131. Not to do with regulatory burden, as I recall. So this is really just another way of people like the CBI saying the same things. Are you really, on behalf of all the workers, all the SMEs that are struggling, on their behalf are you bashing really? Where is the constructive bashing here?
  (Mr Bird) I am not sure I see the element of bashing, but certainly the individual trade bodies that are within the Alliance are made up of companies of all sizes, many of them small, all of them employing people.

  132. Well, I tell you where the bashing is. It is regulated burdens bashing to actually be able to come up to us and say, "Here are some specific examples of regulatory burden which are wholly inappropriate". I would expect you to be able to do that. Chris asked you very, very clearly—
  (Mr Bird) We are very happy to send you that.

  133. Give us an example now. You come here and say "regulatory burden", but you are not able to give us any examples. Give us some examples. What really bothers you? What is the big regulatory thing that bothers you?
  (Mr Bird) I think we would rather give consideration within the Alliance—

  134. I do think it is strange bashing, not to be able to come up with an example.
  (Mr Bird) The nature of the Alliance itself has been to consider the concerns of the various associations. The associations have said that their individual members are concerned by the level of regulation. That is what we are then pulling together as a common view.

  135. If I was one of your associations and I found out that two MPs had asked you directly for an example and you had just sat there in a select committee and not given one example, I would be pretty shocked.
  (Mr Reynolds) I think we could give lots of examples—

  136. Come on then.
  (Mr Reynolds)—but they will be sectoral examples that people are working with, but the kind of burdens that we are faced with at the moment, I am not saying that they are not understandable, but they are putting additional work on to our members. They are things like the requirements of the Terrorism Act, for example, and collecting passenger information of people who will eventually be travelling, the requirements of the Money Laundering Regulation whereby people who wish to offer bureau de change facilities have to be registered and licensed.

  137. Okay. To take those two examples, we have the Secretary of State coming in front of us, so do we say to her, "Look, Secretary of State, these are the big two which, when we really pressed them, they came up with", and do we say to the Secretary of State, "They don't want them"?
  (Mr Reynolds) No, I am saying that you asked for some examples. A further one would be the regulation of travel insurance where the Treasury are out to consultation at the moment and we are asking to be allowed to self-regulate on the matter of travel insurance rather than be submitted to FSA regulation.

  138. So which would you like to get rid of?
  (Mr Reynolds) We would like a lighter touch and one which allowed the industry to comply with the regulations without undue and unnecessary burden.

  139. I put it to you that things like the terrorism one that you have put up, people's safety is paramount, so you cannot have a lighter touch, but you have to do it. If there is something you do not have to do, then you should be quite specific about it so that we can say to the Minister, "Get rid of that. That's not useful".
  (Mr Reynolds) Well, I think we are being perfectly specific and we are, as an industry, highly regulated in many sectors, particularly as far as aviation is concerned. We have the Civil Aviation Authority Regulations with which we have to comply, the IATA Regulations with which we have to comply and that is well understood, but what we are looking at is, when a new regulation comes up, the way in which small businesses can comply without there being a huge consumer detriment.