Tourism minister storms out of reception after industry boss says UK's tourists are 'highest taxed in the world'

Guests were shocked as Mrs Hodge stormed off after clashing with Philip Green, chairman of UK Inbound, a trade group that encourages foreigners to take holidays in Britain.

She was furious after guests booed her speech. One heckled: 'You don't know what you are talking about,' and she fired back: 'Yes I do, you are totally wrong.'

"Hotels too expensive and customer service is poor": Margaret Hodge, Tourism Minister, walked out of the party

Mr Green had enraged Mrs Hodge by accusing the Government of driving away foreign tourists with 'high taxes disguised as green initiatives, ridiculous red tape and a schizophrenic approach to air travel'.

She stormed: 'I came here for a pleasant summer evening on the terrace, not to be lectured.'

Mrs Hodge then claimed British hotels were overpriced and big visitor attractions offered poor service - and left the moment her speech was over.

Tourism boss Philip Green accusing the Government of driving away foreign tourists green taxes

One guest said: 'I have never seen anything like it on the terrace before - there was heckling and even booing.'

Mr Green had enraged Mrs Hodge by accusing the Government of driving away foreign tourists with 'high taxes disguised as green initiatives, ridiculous red tape and a schizophrenic approach to air travel'.

She stormed: 'I came here for a pleasant summer evening on the terrace, not to be lectured.'

Mrs Hodge then claimed British hotels were overpriced and big visitor attractions offered poor service - and left the moment her speech was over.

One guest said: 'I have never seen anything like it on the terrace before - there was heckling and even booing.'

The row at the party overlooking the Thames started when Mr Green made a speech tearing into the Government. He said Mrs Hodge was 'fixated' on British travellers abroad, ignoring inbound tourism.

'Our tourist industry is such a valuable asset and provides work for so many people you would think it would get the kind of support the Government readily gives to manufacturing industries,' he said. 'Sadly that is not the case.'

With Mrs Hodge standing feet away, he poured scorn on her website for saying she has 'the best job in Government' because she goes to the theatre and opera. 'But little of her time is actually spent on inbound tourism issues,' he said.

'What is hurting us is not competition, it is the barriers placed in our
way by our own Government. The success of low-cost airlines has spurred the Treasury into ever more exotic means of raising taxes from tourists. It is nothing more than the exploitation of a soft target.'

He claimed foreign tourists in the UK were 'the highest taxed in the world' and were being driven away.

Mr Green attacked a new Home Office visa for visitors from Russia and China, which means they have to travel vast distances to visa centres in their own countries and fill in forms in English. 'Expecting foreign nationals to complete a long and detailed form in English is ridiculous,' said Mr Green. 'How many of us could complete a similar form in Mandarin or Urdu?'

Britain's annual tourist trade deficit of £20billion would rise unless the Government took action, he claimed. Mrs Hodge blasted: 'There is a lot wrong with the British tourist industry. Hotels are too expensive and customer service at some big visitor attractions is not what it should be.'

One MP guest said: 'Mrs Hodge lost the audience and lost the plot. She was very rude and walked off in a huff without saying goodbye. It was a rare chance for Mr Green to tell a Minister of the industry's problems and he had every right to use it.'

The row has led to bitter recriminations in Parliament's all-Party tourist group, whose secretary, ex Labour Minister Janet Anderson, hosted the reception. Labour's Lord Pendry - the group's chairman - yesterday resigned over Mr Green's speech. 'He was insulting and abusive to Margaret. It was totally out of order to lambast her.'

Tory Shadow Culture Secretary Jeremy Hunt said: 'Our tourism industry feels betrayed by the Government's lack of interest.'