Former Telecommunications Minister E.T. (Bob) Richards and Bermuda Hotel Association chief executive officer John Harvey have leapt to the defence of the Hotel Concession Act 2000.

The pair's move came the day after the former chief executive officer of the Shell Company of Bermuda Robert Stewart told Hamilton Rotarians during a lunchtime speech that the legislation was "the height of folly''.

The Act, which includes ten different tax concessions which are available to hotels and developers who are willing to bring new properties to the Island or renovate existing accommodations, is designed to boost the struggling tourism industry.

But Mr. Stewart warned: "All subsidies are simply mechanisms for robbing Peter to pay Paul. Government has nothing to give to anyone without taking it from someone else -- the taxpayer, and that, just in case you are wondering, that is you and me.'' And he asked: "If the payoff from investing in the hotel industry is so clear to the Minister (Tourism Minister David Allen), why on earth will businessmen not pursue it with their own money?'' Mr. Harvey stressed the hotel industry was behind Government and Mr. Allen and appreciated the passage of the legislation.

"The Government has recognised that the hotel industry was indeed the financial backbone of the Bermuda economy and was heavily relied upon by many Bermudians and guest workers with various different occupations for their main source of income,'' he said.

"This in effect caused Bermuda to attain a high standard of living which directly and indirectly benefited companies like Shell of Bermuda,'' noted Mr.

Harvey.

"Bob Stewart has never had a solution for the real competitive world that exists in other challenging industries,'' he continued, "and chooses to forget that indeed the United States came to the aid of Chrysler Corporation when it required help.'' Mr. Richards said Mr. Stewart's remarks, while political, were based on his interpretation of certain economic principles.

"However, these are textbook principles and bear little resemblance to the real world in which we live,'' he added.

Mr. Richards stressed Government subsidies were common around the world and had contributed to some of private enterprise's most outstanding successes including the microchip and the Internet.

He added: "Even Shell, a company Mr. Stewart (and myself) worked for, has received subsidies from the US government, the global champion for free markets.'' Mr. Richards pointed out that Bermuda's tourism competitors widely used tax incentives to attract investment capital and Bermuda had to compete for available investment.

"The incentives package recently passed recognises the real world in which Bermuda finds itself and appears to be practical common sense,'' he said.

Real world: E. T. (Bob) Richards