Tourism Industry (Hansard, 23 June 1997)

§ 1. Mr. Blunt
To ask the Secretary of State for National Heritage what is his Department's assessment of the impact of the European social chapter and the minimum wage on the tourism industry. [3083]

§ The Secretary of State for National Heritage (Mr. Chris Smith)
Tourism, with its potential to generate employment, is one of the priorities that we have set for the Department. The evidence is that most employers and employees in the tourism industry support a minimum wage. Minimum wages and basic standards of employment, by creating a better rewarded and motivated work force, can help to improve business performance.

§ Mr. Blunt
In most cases, no one would challenge the statement that one wants a well-motivated work force. It is extraordinary that tourism is responsible for 5 per cent. of our gross domestic product and that 7 per cent. of the nation's employees work in the industry. The industry consists largely of small companies that need labour market flexibility above almost anything else. The Government have signed the social chapter and sold the pass on it, but, before they impose a minimum wage, I hope that the Secretary of State will assure the House that he will consult tourism representatives on its level.

§ Mr. Smith
First, I welcome the hon. Gentleman to the House. Before the election, he made an unforgettable contribution to tourism in his Surrey constituency by telling the world: You could put up a donkey as the Conservative candidate for Reigate and it would win. I welcome him to his place on the Opposition Benches. Of course I assure him that we will consult closely and carefully with the tourism industry about provisions for a statutory minimum wage. That is the whole point of having a low pay commission, which will draw together both sides of industry, and of consulting wisely so that we set a sensible rate for the minimum wage.

§ Mr. Skinner
Is my right hon. Friend aware that one of the reasons for our magnificent majority on 1 May was that these barmy Tories were daft enough to keep 606 telling workers that they had to work for peanuts? It has nothing to do with the common market: it is about justice, and it is offensive to keep hearing these well-heeled Tory Members, probably with consultancies up to their ear holes, telling British workers that they cannot get about £5 an hour. That is the rate, isn't it?

§ Mr. Smith
I shall, of course, pass on the last part of my hon. Friend's question. He is right in the first part of his question. It is particularly interesting that Conservative Members and Ministers failed to understand the evidence that they commissioned. A Coopers and Lybrand and London business school report prepared for the Conservative Government in December concluded: The tourism and hospitality labour market faces the threat of a self-perpetuating vicious circle that is harmful to profitability and competitiveness as a result of low wages and poor morale in the tourist industry. Opposition Members have to understand that exploitative wages do not result in a well-motivated work force and good service for customers and visitors.

§ Mr. Fearn
I support a fair minimum wage, but it must be fair, especially in tourism. The Minister and I both went to the British Resorts Association conference and addressed the meeting. After that meeting, many delegates spoke to me and, I think, to the Minister about the minimum wage. They were quite worried, as are hoteliers in Southport in my area, about the fact that it must be fair. Will the Minister assure us that he will consult not only the tourist boards, but the British Resorts Association?

§ Mr. Smith
I assure the hon. Gentleman that, in coming to a conclusion about the level of the minimum wage, we will of course wish the low pay commission to consult widely not just with the tourist boards, but with the industry and the British Resorts Association. Indeed, I noted with interest that, in its 2 January edition, "Caterer and Hotelkeeper" concluded that 84 per cent. of industry staff and 65 per cent. of industry employers supported a statutory minimum wage.

§ Mr. MacShane
Is not the real question to ask: why do 14 million British tourists go on holiday in countries, principally in Europe, that pay a minimum wage and train their staff properly? If we had that level of pay and investment in this country, more of those people might stay at home. Is it not sad that the first act of the new Leader of the Opposition is to stuff his Cabinet with anti-Europeans, sending a message that they have learnt none of the lessons of 1 May? Will my right hon. Friend join me in inviting all Conservative Members to take their holidays in Britain this summer so that they will learn what nonsense they are talking?

§ Mr. Smith
My hon. Friend is right to draw attention to the fact that this country has a substantial balance of payments deficit in relation to tourism—it totals some £4.5 billion a year. We cannot do much about the weather, but we can at least ensure that when visitors take their holidays in Britain, either coming from abroad or visiting within the country, they can 607 have a good quality experience and be treated well and with courtesy. A key of part of ensuring that is a well-motivated staff.

§ Mrs. Virginia Bottomley
Speaking as someone who does take holidays in Britain and not, like new Labour, in Tuscany, may I remind the right hon. Gentleman that achieving a well-remunerated and motivated work force does not require a statutory minimum wage or joining the European social chapter? I add to the points made by my hon. Friend the Member for Reigate (Mr. Blunt). The World Travel and Tourism Council estimates that the tourism industry and its associated activities account for as much as 12 per cent. of GDP. Above all, may I urge the right hon. Gentleman to resist the damaging effects of the social chapter and the minimum wage, and to maintain a commitment to deregulation? With that in mind, will he consult at the earliest opportunity my right hon. Friend the Member for Horsham (Mr. Maude), whom we welcome to his post, and who has only recently stepped down from chairing the previous Government's deregulation panel, whose advice on this subject will be warmly welcomed?

§ Mr. Smith
I am disappointed that, in her first foray on the Back Benches, the right hon. Lady seeks to defend the economics of exploitation—because that is precisely what low poverty wages are all about. I am sure that she has forgotten that a leading figure in the tourism industry, David Wood, chief executive of the Hotel and Catering International Management Association, said: We should accept the principles of a minimum wage and the social chapter because they would reposition the industry on level terms with others. I agree.

§ Mr. Miller
I hope that, when my right hon. Friend enters into this consultation, he does not consult French Railways Ltd. which is now the owner of British Rail International, which had a role in promoting British tourism. Does he agree that that sale reflected the worst aspects of the previous Government?

§ Madam Speaker
Order. The question is about the minimum wage.

§ Mr. Maude
The Secretary of State says that the tourism industry supports the introduction of a minimum wage, but at what level does he believe that it supports a minimum wage? Does he accept that it must be set at a level either so low as to yield no benefit, or so high that it destroys jobs, as the chairman of the Low Pay Unit has said? Which of those two does the right hon. Gentleman prefer?

§ Mr. Smith
I warmly welcome the right hon. Gentleman to his position on the Opposition Benches. I look forward to many constructive debates and arguments with him, but I am afraid that he has picked the wrong argument in this instance. He points to the need to set a statutory minimum wage at a sensible level—every Labour Member accepts that. Not having statutory wage protection in place, while the rest of Europe and most of the rest of the developed world has, leads to the exploitation of the work force, 608 to appallingly low pay and to a much poorer tourism industry. That is not the way forward, and we want to change it