Joe McHugh (Donegal North East, Fine Gael)

I will focus on the tourism sector in the short time available to me. I have not necessarily taken a local or parochial option. The national tourism industry has a great opportunity to help us to get out of the mess we are in. The recent legislation providing for a reduction in the service VAT rate must be welcomed in that context.

Twenty-one of the main EROs and REAs, with a range of 242 different rates of pay, are specified across the sectors and workers they cover. There are 20 different rates applying to hotel workers alone. As far as hoteliers and the management of hotels are concerned, this can turn into a bit of a bureaucratic headache to run small hotels in rural areas. These reforms will create four different hotel rates, thus reducing the record keeping requirements for employers in the market and recognise the additional rates. Hoteliers will pay extra for experienced staff. From my contact with many employees throughout the hotel industry in recent weeks, many of whom who have been employees in these hotels for 20 or 25 years, they must be included as an important component of the tourism sector because they are the front line and the important components of promoting tourism in this country.

We have a problem across the Border with competitiveness, especially with labour costs. As politicians, we are caught between a rock and a hard place. EU legislation specifies that we must go through the open EU e-tendering process which means we are losing quite a substantial amount of work to Northern Ireland. We are losing a substantial amount of work owing to the different rates. Basic UK construction pay is €16 per hour compared with €20 in Ireland. UK accommodation and food services pay is €9.33 per hour compared with €12.34 in Ireland. Here we are faced with a dilemma. Something that we need to address vehemently and aggressively is how we introduce social contracts into tendering in this country. Whether it is road contracts or public buildings contracts that we are losing to Northern Ireland, we are not ensuring we have a social contract or an obligation to local workers in this country. That is something about which we must be careful and take cognisance.

The proposed plan would be introduced as part of a broad package of employment enterprise reform that is designed to increase competitiveness and advance the interests of workers and employers. The Government recently increased the minimum wage which had been cut by the previous Government and, as I stated earlier, recently introduced the lower rate of employers' PRSI.

As far as the debate on competitiveness is concerned, as I stated earlier, we are between a rock and a hard place with respect to not being able to compete with Northern Ireland. That is an issue that we should keep on the agenda in the future.

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