Tourism Industry and VAT

Debate between Jim Shannon and Shabana Mahmood

Tuesday 17th March 2015 Westminster Hall

[Shabana Mahmood]

I thank my hon. Friend. I hate to get people’s constituency names wrong, so I am glad to have got it right on this occasion. He made the point that it is Welsh tourism week, and Welsh Members of Parliament from various parties have been well represented in this debate. I recognise his long history of campaigning on this issue, and particularly his focus on the number of jobs and the amount of economic growth that such a change could create in his constituency and the Welsh economy as a whole. I fully expect him to continue lobbying Labour colleagues and a future Labour Treasury on the issue, as he has done alongside others throughout this Parliament, but I am afraid that I will disappoint him and other hon. Members throughout the House once again by not making a commitment that the next Labour Government will reduce VAT for the tourism sector in the way that they envisage.

[Jim Shannon]

If the shadow Minister is giving us a blanket no, can she give us an assurance that whatever happens after 7 May, if Labour is in power, it will consider it? If the Government applied to Europe, they could get a reduction. At least if we knew that it would happen, a move would be made. Let us see what happens.

[Shabana Mahmood]

I am grateful to the hon. Gentleman for that intervention. I was just about to develop a point about the evidence presented by hon. Members in this debate, and how we will react to it if we form the next Labour Government and Treasury.

I start by recognising that cutting VAT is a significant monetary challenge. The Opposition are clear that we will put no unfunded promises in our manifesto, the basis on which we will seek election from the public in the coming weeks, and we will not borrow any more money for day-to-day spending. We note the evidence presented by hon. Members in this debate from notable academics who have considered the issue in detail. It has been cited in support of the argument by the Cut Tourism VAT campaign. From opposition, I am not in a position to assess that evidence in the same way that the Treasury can, as it has access to data sets that we do not, but I note the Minister’s answers to hon. Members in written parliamentary answers and oral answers during departmental question time in the House. He has said, on the basis of analysis undertaken by the Treasury, that a VAT cut for the sector would not produce sufficient economic growth to outweigh the consequent revenue shortfall. It would be helpful if in summing up, the Minister put more of that evidence on the record, if the position is the same as before.

Garment Industry (Working Conditions)

Debate between Jim Shannon and Shabana Mahmood

Wednesday 30th April 2014 Westminster Hall

[Shabana Mahmood]

That is an important point. When we visited that factory in Dhaka, I had the benefit of having my hon. Friend the Member for Bethnal Green and Bow with me. She was able to engage with the workers in Bengali and Sylheti. She had a conversation with them that probed whether what we were seeing was for the benefit of visitors, rather than what happens on a day-to-day basis. I left confident that what we had seen was a true picture. DFID put in place arrangements to work with grass-roots organisations to ensure that those standards are not just what someone sees when they visit on any given day, but what happens every day for those workers.

[Jim Shannon (Strangford) (DUP)]

Will the hon. Lady give way?

[Shabana Mahmood]

I am afraid that I will not, because I have so little time left.

Post-Rana Plaza, there has been a lot of action to try to get better safety standards in Bangladesh. A number of companies have signed up to the accord on fire and building safety there. It covers just less than 2,000 factories, which still leaves many thousands of factories not within the scope of the accord. That is a concern, although the fact that some 1,800 or so factories are covered by the accord is a good thing.

When we were in the country with the all-party group, we had a number of conversations with Rajdhani Unnayan Kartripakkha, the Bangladesh university of engineering and technology and other stakeholders in Bangladesh on regulations and building codes and their enforcement. Their point was not that the building regulations do not exist, because there is a strong and relatively robust system of regulations and codes; their point was more on the level of enforcement and capacity—having enough trained surveyors, architects and engineers to implement the regulations.

I am the daughter of a civil engineer. My dad is an expert in water and waste management systems, so I have grown up looking at maps, regulations and things like that. I was struck that the experiences of those experts was not that different from those of my dad as a civil engineer in Britain. They had similar relationships with colleagues and brought similar professionalism to bear. The problem is that there are not enough of them in Bangladesh and they are not organised into professional bodies, such as those we are privileged to have in this country with—for example, the Institution of Civil Engineers and the Royal Institution of Chartered Surveyors. That is the missing link, almost, in getting Bangladesh to a place where the regulations are properly implemented and enforced when buildings are being put up.

I am pleased that DFID has decided to focus its energies on fire and safety regulations, capacity and so on. That is an important step. I am a big believer that our activities through DFID in other parts of the world should not be seen as just giving money. We should help countries to build up the infrastructure and systems that they need to deal with these issues themselves.

One thing that remains a concern is that, although many organisations are carrying out inspections and reports into building safety in Bangladesh are being prepared, I am not clear or confident that the information captured will go quickly to a place where it can be implemented. For example, Tesco wrote to me in advance of this debate to say that it had ceased to work with one of its suppliers in Bangladesh because it does not believe that the building that the supplier works out of is safe enough. It is worried about that, but once it has ceased to work with that factory I am not clear what will happen to ensure that the factory ceases to operate or that it takes remedial action to ensure that it is a safe working environment.

There are so many assessments of building safety covering such a wide geographic area; I remain worried that the Bangladeshi Government will not end up with the data they need to take remedial action in situations where remedial action has not been enforced because the big clothing companies have ceased their relationship and walked away.

Issues remain on workers’ rights and the organisation of the labour force in Bangladesh. Trade unions in this country have been active in trying to support Bangladeshi workers to be in a position where they can organise. There is a lot of discussion on labour law amendments in Bangladesh—whether they go far enough and whether workers will soon be able to organise and to negotiate with company owners on wages and their safety at work.

Regardless of the politics of the trade union movement in this House, we are privileged to have such things in this country. I would very much like to see Bangladeshi workers and poorer workers across the world in a similarly strong position when it comes to negotiating rights at work. I would be very grateful if the Minister said a little more about what DFID is doing to support labour law and rights in Bangladesh. There has been a lot of discussion about whether to take the United States route, which is to deny trade privileges, or whether to try to work with the Bangladeshi Government in a slightly different way, which is what the UK and the European Union have decided to do.

There remains, as my hon. Friend the Member for Bethnal Green and Bow (Rushanara Ali) said, a big issue on the Rana Plaza compensation fund, which does not have half the money that it aimed to have. It was said to need £24 million, but only £9 million has been raised. I find that disgraceful and shocking. For the big companies that are involved in this industry, which is worth billions and billions of dollars, £24 million is small change. It is a tiny sum.

I remain shocked and deeply upset that that fund has still not got the money that it needs. I pay tribute to the companies that have paid into it. Primark, which has a base in my constituency, wrote to me recently to inform that it has paid in and taken the action that it feels that it can, but we need to continue to press other British companies to do the right thing and ensure that that fund has all the money that it needs.

On compensation for workers, in this country we are privileged that we have a body of personal injury law that makes it easy for lawyers to argue on behalf of victims for compensation that truly and accurately reflects lifelong loss of earnings or amenity. We have formulae in our legal system that enable us to provide adequate compensation to victims of injury at work and elsewhere, but I am worried that the robustness that we expect in Britain or elsewhere in Europe or in the States through such legal formulae for deciding rates of compensation, especially in the cases of injuries that prevent someone from being able to work fully for the rest of their life, will not necessarily translate into what will be received by the victims of the Rana Plaza disaster and their families.

I would be grateful if the Minister could say a little about the British Government’s view on compensation, as that is important. We must ensure that the families of those who lost their lives are adequately compensated, as well as the 2,500 people who were injured. Some of them, who are desperately poor, will never be able to work again and, as each day passes, they are getting into more desperate circumstances.

Terrible things happen in faraway parts of the world, but sometimes good can come out of those disasters and it is our duty to try to find that good. One such good is that, for consumers in wealthier parts of the world who enjoy fast and cheap fashion, this is a reminder of the human cost of our £10 dress from a British high street chain. We have responsibility as consumers to think more about that when we are buying and brands need to think not just about the moral and right thing to do, but their reputational risk when they find that they may have contributed in some way to the problems that caused disasters such as Rana Plaza.