agree with littleoldme... Straw is talking about veils as a barrier, not just a distraction, as low necklines might be. I've seen no evidence that he's a racist or anti-Islamic (though those who accuse him of being part of the anti-Iraq war machine do have a point).
What he said, as I understand it, is that he feels uncomfortable talking to someone whose face he can't see. This seems, at the least, a reasonable point to raise. What do you think, Dom Tuk? How do you feel talking to someone in a niqab? Do you feel at a disadvantage because she can see your face and you can't see hers? Do you feel comfort because you're obviously in the presence of someone with deep religious feelings? Or what?
I can't answer these questions myself because none of the Muslims I know wear full veils, only headscarves. But they're questions about how we socialise and how we deal with people whose faces we can't see; these are fair matters for discussion, I think. (And I'd be surprised if Straw's constituents ran off and voted for someone else because he'd raised them.)