My Lords, ladies and gentlemen, welcome to the 2006 annual luncheon. We meet today in very different – and much happier – circumstances to that of 2005 when our annual luncheon took place on the same day as the London bombings.

Let us pay tribute to those who died in that terrible outrage and I ask for a moment’s silence to remember them.

Just over 100 members and guests were eventually able to attend last year occasion. This year, we have our biggest ever gathering – over 800. This number reflects the robust health of the association, now with record membership and a wide recognition of the growing success in our work in lobbying government on behalf of the industry.

We have achieved some notable successes. To mention just a few:

Our discussions and representations to HM Treasury and Customs achieved significant policy changes on the thorny issue of the tronc, resulting in significant reimbursements to many members.

Our direct intervention persuaded the Chancellor to include the hotel industry in his new Real Estate Investment Trust legislation.

We have supported – and helped drive – the new harmonised national grading scheme.

With our major London members we provided the all-important hotel accommodation element of the 2012 Olympic bid, without which the bid would have been lost.

We have successfully campaigned for a complete ban on smoking.

This is not to say that there is not much more to do. As our annual report points out, there are over 40 government Bills currently going through, many of which add complexity and cost to the industry. We have a government health agenda that affects many of our members and a food agenda that affects almost every member – to say nothing of yet more employment legislation, with restrictions on employing non-EU labour.

We will not let up in our efforts to lobby on your behalf.

One of the most enjoyable parts of my job is to meet so many people and to get to know them as personal friends. It is all the sadder, therefore, to note the death of two of them – Giles Shepherd and Chris Beaumont – both of whom were great supporters of the association and will be sadly missed. One other person I would like to mention is that of Eric Forth MP one of the industry’s greatest unsung supporters. We shall greatly miss his help in parliament.

And a farewell, too, to Ramon Pajares, one of the industry’s most distinguished hoteliers and the association’s president for the last five years. Ramon is retiring and we wish him well and thank him for his interest in the industry’s affairs and his deep commitment to the association.

But, while one retires, another joins. I would like to welcome David Michels – now Sir David – who succeeds him as president. I’m sure we would all wish to congratulate David on the honour he received in the Birthday Honours list and to welcome him as our new president.

Finally, you will see all around you, our views on the possible introduction of a bed tax. Or tourist tax. Whatever you want to call it, there hardly seems to be a more inappropriate time to suggest introducing a further tax on accommodation users than at this time – when the country’s tourism trade deficit is at a record near-£20bn.

A further tax – over and above 17.5 per cent VAT (the second highest rate in the EU) – will only drive this deficit further into the red. It will deter overseas visitors from visiting this country and it will encourage more UK citizens to holiday abroad.

So the suggestion of a bed tax is absolute nonsense and immensely damaging to the industry. We will continue to campaign vigorously against it and I would like to thank all those members and organisations that are supporting the campaign.

If we can learn anything from the past it is that you have to invest to encourage growth. Every one of our members understands this, and practices it. Our local and national government apparently does not.

What local authorities should be doing is to invest in their own infrastructure to encourage more visitors – to have cleaner toilets open all year round, better car parking, and a more welcoming environment.

And government should learn to invest more – principally in VisitBritain – which has had its £35m grant-in-aid stuck at that level for eight years – and which is thus reducing in value every year.

It is investment, not additional taxation, that will remain the driver of the economy – and of the hospitality industry,

I leave you with that thought. Ladies and gentlemen – may I wish you a very happy luncheon today.