George Osborne: We will not let booming holiday business be undermined

Unfortunately, instead of supporting Yorkshire tourism, Gordon Brown is going to hit the regional economy hard by scrapping tax relief for furnished holiday lets.

As this newspaper's excellent campaign has shown, Gordon Brown's disastrous policy will destroy jobs across Yorkshire, and cost the UK economy more than 200m. There are now an estimated 2,500 holiday

letting companies across the county – more than almost any other

region. With unemployment in Yorkshire having increased by 65,000 in the last year alone, the Government should surely be helping, not undermining, local businesses. A Conservative government will be different. To safeguard the recovery, we need to build on Yorkshire's strengths and help to create new jobs. That means taking bold action to boost the tourism industry. Let me explain how.

First, we will provide a clear sense of direction on the economy. The country's leading economists have warned that Labour's debts will drag the country back into recession. We cannot let that happen. That means getting the deficit down, and restoring international confidence in our economy. Because if that confidence drains away, then we face higher interest rates and mortgage bills, and the entire recovery will be put at risk. That's no good for the tourism industry – or any other industry.

Second, we need strong leadership on tourism. So a Conservative

government will set for ourselves this clear ambition: We want to increase the proportion of UK residents' tourism spend that goes on domestic holidays from 38 to 50 per cent. What will that mean in practice? It means a 6.5bn boost to the UK economy – and a 400m boost to the Yorkshire economy. That's a prize worth fighting for, and we will do what it takes to make it happen.

Third, we'll build a 21st century infrastructure system. For example, we'll equip thousands of people across Yorkshire with the skills they need to get a job and climb the career ladder. A Conservative government would create 22,000 new apprenticeships across Yorkshire, as well as 11,000 new training places, 9,000 new work pairings and 4,000 new young apprenticeships. In addition, we will fund training for 50,000 people who want to find a job in the hospitality sector, working with some of Britain's largest and most successful companies. These policies will be funded by diverting money from Labour's failing New Deal, and from the benefit savings generated by getting people into work.

And, of course, for tourism businesses in Yorkshire today, finding

qualified staff is only part of the challenge. Our creaking transport system makes it much too difficult for people to get to Yorkshire, and then get around once they're there. So a Conservative government will begin work on Britain's first North-South high-speed rail line that will connect Leeds to London, and to other major cities such as Birmingham and Manchester. This will increase train capacity, reduce travel times – and help to boost Yorkshire's tourism industry.

The fourth thing we'll do to support tourism in Yorkshire is get the tax system right. We'll cut the headline rate of corporation tax from 28p to 25p by abolishing complex allowances and reliefs, and we are aiming to create the most competitive tax environment of any major economy. And to help small business – and I know that 80 per cent of tourism businesses are SMEs – we will lower the small companies' rate to 20p, once again by reducing complex reliefs.

And to help those who want to start a tourism business, we will introduce a new tax break that means no new business started in the first two years of a Conservative government will pay Employer National Insurance on the first 10 employees it hires during its first year.

Last, but not least, the Conservatives will undo the damage caused by Labour's tax raid on furnished holiday lets. We will do this in a way that is fiscally neutral, and consistent with our commitment to cutting the deficit and restoring the public finances to health. My team is working with tax and legal experts to explore how this should best be achieved, including proposals to change the eligibility thresholds and amending the interest deductibility criteria.

The Conservative Party will fight for Yorkshire tourism, and help to create new jobs and business opportunities across the region. We will safeguard the recovery and get our economy back on its feet.

George Osborne MP is the Shadow Chancellor.