HC Deb 03 February 1997 vol 289 cc662-4
6. Mr. Nigel Evans

To ask the Secretary of State for National Heritage what assessments he has made of the impact of the social chapter on the United Kingdom tourism industry. [12221]

Mrs. Virginia Bottomley

With the help of the Government's reforms, British enterprise has created an increase in employment of well over 500,000 jobs since 1993. The social chapter would damage labour market flexibility, raising costs, destroying jobs and reducing competitiveness in world markets. The Government will never willingly place unnecessary burdens on business, such as a statutory minimum wage or the social chapter.

Mr. Evans

I am delighted to hear that, but does my right hon. Friend agree that it is not only Conservatives who are giving out warning signs about the social chapter and the minimum wage? Does she agree with the chairman of Bass, Sir Ian Prosser, who said that Bass was conscious of the difference between social on-costs in the UK of 10 per cent., and in Italy of 43 per cent., or with Forte, which says that social on-costs are 50 per cent. in France and Germany? Does she agree that it is pointless the Labour party talking about having a tourism strategy when it makes no reference to the fact that, if it introduces a social chapter and a minimum wage, hundreds of thousands of jobs will go from all sectors of industry, but particularly the tourism industry in Britain?

Mrs. Bottomley

My hon. Friend is exactly right. There has been a substantial increase in employment in the tourism and hospitality industry. It would be the most hard hit by the imposition of a minimum wage and social chapter.

My hon. Friend refers to leaders in the industry who have already made the point powerfully. I would also quote Robert Collier, chairman of Inter-Continental Hotels: This year the London Inter-Continental will run a gross operating profit 50 per cent. higher than the sister hotel in Paris. The difference is entirely in the costs of social benefits and insurances for which employers in France are liable. Put yourself in the position of a multi national corporation and I ask you which is the country you are more likely to invest in? Which economy is the more conducive to generating new jobs? The Labour party's policy paper on tourism was disregarded as irrelevant. This is the key question that the industry minds about.

Dr. John Cunningham

As for the untruthful claptrap and scaremongering that we have just heard from the right hon. Lady, let us face a couple of facts. The social chapter does not deal with incomes; nor does it deal with the minimum wage, as the hon. Member for Ribble Valley (Mr. Evans) implied; nor does it deal with the social costs of other nations.

As the hon. Gentleman mentioned Bass in his inaccurate tirade, perhaps he would explain, and perhaps the right hon. Lady would explain, why Bass is one of the 57 British companies that has signed the European works council deal under the social chapter's provisions. As Bass is active in the leisure and hospitality industries, is it not clear that, far from what he has said, it sees no threat whatever from the social chapter? Finally, apart from the diatribe and nonsense from the right hon. Lady, perhaps she would also like to explain to people in the hospitality, tourism and leisure industries why she and her right hon. Friends are so intent on maintaining poverty levels of pay in those industries?

Mrs. Bottomley

First, I welcome the right hon. Gentleman to our questions. We have missed him greatly. He looks refreshed from his world travel. It is a pleasure to have him back with us, from, I understand, visits to different parts of the world.

Of course, we want to promote travel and tourism in Britain. We believe that the tourism industry is one of Britain's most important industries. It requires a flexible labour market. If the Labour party does not understand the damage that would be done to the industry by the social chapter and the minimum wage, it has failed to listen to all those leaders in industry who do understand. For example, a recent Confederation of British Industry survey showed that 80 per cent. of those surveyed were opposed to introducing paternity leave and 66 per cent. were opposed to other elements of the social chapter. We believe in jobs, in businesses and in the tourism industry.

Mr. John Marshall

Does my right hon. Friend recall the comment of Mr. Jacques Delors, who said that Britain's exemption from the social chapter would act as a magnet for inward investment to the United Kingdom? Is that not as true for the tourism industry as it is for manufacturing industry?

Mrs. Bottomley

I remember that comment. The tourism industry is flourishing—and is doing so because Britain has a Government who believe in deregulation, in liberalisation and in reducing the burdens on and the interference with employers. We want a well-motivated and well-employed work force, but not at the diktat of Brussels.