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Mr. MacShane: Did my right hon. Friend have a chance to hear the interview on Radio 4's "Today" programme this morning with the director of the Business Services Association, who welcomed a minimum wage, was seeking to participate in the low pay commission and pointed out that driving down wages to £2 and £1.50 an hour encouraged bad employment practices? Is that not relevant to the tourist industry?
Dr. Cunningham: Indeed, I heard that interview and I have also seen the reports in the press today. What disconcerts Conservative Members is the fact that there is growing recognition that Britain cannot compete on miserably low levels of income. That is recognised throughout Europe and in the United States of America.
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The idea that we can somehow improve the quality of our product and our services by paying people low wages is absurd.
I have never understood the Conservative party's argument that it is necessary to pay those on high incomes more to make them work harder, but those on low incomes less and to give those on large incomes tax reductions to improve their incentives, but to increase the tax burdens on those on low and middle incomes. That is an absurd argument and I cannot believe that in their heart of hearts many Conservative Members believe in it.
Mrs. Virginia Bottomley:
What the right hon. Gentleman fails to understand is that the Conservative party dislikes always telling people what to do, how to run their business and what to pay their staff. We believe that prosperity, jobs and opportunity come from freedom, deregulation and liberalisation. The Labour party stands for regulation, legislation and bureaucracy--always telling other people that it can run their business better than they can themselves. That is why we shall win the next election.
Dr. Cunningham:
The next election cannot come too soon for us. If the right hon. Lady is so confident of her policies and the Budget, let us have the election now. What are we waiting for? The people of Britain would like to have the election now and we have confidence in our policies, our position and our level of support.
Lady Olga Maitland (Sutton and Cheam)
rose--
Dr. Cunningham:
I will not give way at the moment as I want to return to what the Secretary of State said about poverty, pay and low wages, which she defends. She mentioned Mr. Peter Moore of Center Parcs in her speech.
Dr. Cunningham:
Indeed. But this is what Mr. Peter Moore had to say about low pay:
We are determined to make an impact on low pay and we are committed to the principle of a minimum wage. We are determined too that Government and the industries will work together more effectively to market UK plc, to enhance our chances of improving our share of the continuing growth in global tourism.
The Government's record is one of 17 years of indifference, neglect and policies that have been damaging to the industries, culminating this week in the abysmal Budget, with its taxes and cuts in the right hon. Lady's departmental budget. Tax is the ground on which the Tories often choose to fight and I am happy to take up that challenge. Let us consider air passenger duty,
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So, the Secretary of State is telling us that by taxing people an extra £385 million she is helping the prospects of our tourism industry. That is complete and arrant nonsense. I cannot believe that it comes from the party that says that low taxes are important. Yet the right hon. Lady--a member of the Cabinet--tells the House today that those increases will not damage the prospects of our tourism and hospitality industries.
The insurance premium tax has also increased as a result of the Budget. Travel insurance and insurance on car hire are the two areas of relevance to be affected. Is increasing the taxes on those insurances calculated to increase the attractiveness of Britain for foreign visitors? Is it calculated to make us more competitive as a host country for visitors and tourists, or less? I will be happy to give way to any right hon. or hon. Gentleman who wants to advance an answer or an argument. Will the taxes help or hinder us? Yes or no? They do not seem to be quite so keen to intervene at this point in the debate.
Mr. Simon Coombs (Swindon):
I hesitated a long time before interrupting the right hon. Gentleman as he is getting on very slowly and this intervention will only slow him down even more--I can see that there is a wodge more of his speech to come. Two years ago, the Labour party argued that the introduction of airport passenger duty was likely to lead to a massive diminution in the number of overseas visitors to this country. It has not done so. As my right hon. Friend the Secretary of State said, a massive increase coincided with its introduction. My suspicion is that the attractiveness of Britain is so great that it overcomes that sort of problem. So, the answer to the right hon. Gentleman's question is that those matters are broadly neutral.
Dr. Cunningham:
That is not what the Secretary of State said, so the hon. Gentleman is using a different argument. It was fortuitous for the Government and for visitors to Britain that the tax was introduced at a time when sterling was falling in value--there was a devaluation in sterling--and an IRA ceasefire was announced, which we all welcome. So, circumstances other than the introduction of the tax have also to be taken into account.
I stand by what I said--in all other areas of policy and activity the Conservatives believe that lower taxes are essential, but in this area they believe that increasing taxes will somehow not be damaging. That is facing both ways at once and the hon. Member for Swindon (Mr. Coombs) knows that to be so.
Everyone shares the view, I think, that the future success of our arts and cultural industries is inextricably linked with visitors and tourism--not just in London but
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The Secretary of State said that she was pleased to announce today a £1.5 million grant to London, but overall she has agreed to a reduction of £500,000 in the BTA budget, which equates to the cost of several BTA offices abroad--offices that are there to attract visitors to Britain and to promote our country.
A further £134,000 is transferred from the English tourist board budget to the Department of Trade and Industry. The Secretary of State said that she was delighted to announce that the ETB had already put in an application for that money; of course it has: it is trying to get its budget back. It now has to compete for what was its own money, which is absurd.
Our policies on skills and training have won backing today, as my hon. Friend the Member for Rotherham(Mr. MacShane) said earlier, and will win further backing. There is growing support for the introduction of a minimum wage, and we also learn from a report in the Financial Times that
The timing of this debate is rather curious. I could not quite bring myself to believe that the Secretary of State wanted to come to the Chamber today, following a Select Committee report that was supportive of Labour party policies and a Budget that has had such damaging consequences for all her responsibilities. She had no new policy announcements to make, no coherence in her approach and no new White Paper to flag up.
All was revealed when we read about the activities of the chairman of the Conservative party, the right hon. Member for Peterborough (Dr. Mawhinney).
Mr. Robert Banks:
The right hon. Gentleman said that the Select Committee report coincided with Labour party policy. Where does he stand on the funding of the British Tourist Authority and the recommendations in the report?
"You can't pay low wages--it's a false economy"--
if you do--
"Additional money has then to be spent on constant recruitment, selection and training. No genuine service culture can therefore be built and it just becomes a negative spiral."
The right hon. Lady ought to be a little more careful in adducing support from such people. She did not accurately express his views.
"The study on the financial impact of poor customer service, the first of its kind, suggests that over a five-year period, a business with annual turnover of £500m could lose more than £1.8bn in revenue and £267m in profits, because of such poor service."
If we maintain the approach on pay and training--or the lack of them--that the Government have endorsed again today, we shall damage the quality of service in our tourism and hospitality industries, throwing away money in false economies.
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