Our way forward

Thursday 27th March 1997 00:00

Would your party introduce a statutory minimum wage? If yes, at what level would it be set?

Virginia Bottomley: The Government is totally opposed to the introduction of a minimum wage because of the damaging consequences that it would have on employment. This view is shared by members of the tourism industry.

Jeremy Logie, chief executive of the British Hospitality Association, argues that an hourly minimum wage at "£3.60 could still have a big impact on the industry. At £4.29 we would see lots of companies going out of business" (Caterer, 2 January).

Likewise, research by the Department for Education and Employment suggests that a national minimum wage at £4.15 per hour could cost 950,000 jobs if pay differentials were half-way restored and 1.8 million jobs if pay differentials were fully restored.

The best way to help poorer households is through Family Credit and other in-work benefits.

Dr Jack Cunningham: When the Conservatives abolished wage councils in the hotel and restaurant sectors, they did not create jobs, as they had claimed. Getting Britain back to work does not mean that we should become a low-pay economy - we must compete on the basis of quality of product, service and provision. That is why Labour is in favour of a minimum wage.

Labour would establish a Low Pay Commission to involve industry, commerce, unions and employees to decide in consultation what appropriate level can be set. The tourism and hospitality industries will have the right to put their case.

The tourism and hospitality industries in Britain have a much higher turnover of staff than any other country in Europe. Together with Labour's plans for increased training opportunities, we believe the minimum wage will mean less time wasted on retraining new recruits, and will lead to better motivated staff and happier customers.

Robert Maclennan: We believe that all workers should be free from exploitation by those in a position of power. As part of this view, we support implementing a form of statutory minimum wage.

However, we are not in favour of one figure for all, as there are huge economic variations throughout the country. We would set regional minimum figures, which take account of the cost of living, so that those who live in areas with a high cost of living do not lose out because of an unfair averaging-out.

What is your party's attitude toward the use of illegal workers in the industry and how would your government deal with the problem?

Dr Jack Cunningham: The recent Asylum Bill introduced employers' checks. Labour opposed these during the passage of the bill, as we believe they will not work. They are overly bureaucratic and could foster discrimination.

The immigration authorities are responsible for immigration controls. A Labour government would maintain firm immigration controls and would ensure that they remain as effective as possible.

Robert Maclennan: We are totally opposed to the use of an illegal work-force in order to save money. We intend to bring the full weight of the law to bear on those unscrupulous employers who continue to flout legislation for the furtherance of their own interests.

There can be no defence for this sort of activity, and we will do all in our power to stamp it out.

Virginia Bottomley: Non-EEA (European Economic Area) nationals are already subject to criminal penalties if they breach the conditions of their stay in the UK by working when they are not entitled to do so. Section 8 of the Asylum and Immigration Act has now made it a criminal offence to employ someone who is not entitled to work in the UK.

The Government believes these proposals will impose no significant burdens on employers. As the CBI made clear in its response to the Government's consultation document on illegal employment: "Members are not opposed to the measure outlined in the document since the Home Office, in focusing the initial check on national insurance numbers, has attempted to choose the least burdensome option for employers. This choice is welcomed by employers who feel that the check will not place an unreasonable burden on them".

Would your party consider reducing the rate of VAT on hotel accommodation to bring the UK into line with other European Union countries, such as France (where the accommodation rate is 5.5%), Spain (7%) and Greece (8%)?

Robert Maclennan: The Liberal Democrats oppose selective punitive taxation for individual industries. We recognise that the airport tax, for example, is damaging to the industry, and we opposed its introduction and its increase. We are committed to its abolition.

Furthermore, we are broadly sympathetic to the views of the industry in respect of VAT rates, and we will continue to work toward achieving real harmonisation to prevent wide distortion of competition in the single European market.

Virginia Bottomley: While the Conservative Party acknowledges the strength of feeling in the industry about the VAT issue, we do not believe that the UK tourism industry is hampered by the rate of VAT in the UK.

In the first place, we have [overall] a lower rate of VAT than many of our EU partners, and the zero rate is much more widely applied in the UK. For example, food, children's clothes, books and public transport are all zero-rated.

The crucial issue is the overall burden of taxation, not the rate of a particular tax such as VAT. UK tourism operators may face a higher VAT rate than some of their competitors in other EU countries, but tourism firms in the UK do not suffer the heavy costs arising from the Social Chapter, minimum wage legislation or local tourism taxes.

If Labour came to power, the ability of the tourism industry to compete would be severely hampered by their plans to introduce a minimum wage and adopt the Social Chapter.

Dr Jack Cunningham: I understand the impact of VAT on the tourism and hospitality industries, which has been doubled by the Government, in breach of their last election promises. I invited the industries to put their case to the Shadow Chancellor as part of Labour's corporate tax review. Our intention is to see that taxation levied upon tourism products is fair, but does not hinder their performance in the competitive European market.

Next week, the three National Heritage spokesmen are quizzed about hotel and restaurant registration and classification, service charges and tipping, licensing laws, and smoking in restaurants and hotels.


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