Travel and tourism leaders say Prime Minister Andy Burnham’s new government has got off to a positive start for the industry, but they are waiting to see what his first Budget brings on 28 October.
Speaking at the Travel Leaders Summit, hosted by travel accountants Xeinadin, Advantage Travel Partnerhip CEO Julia Lo Bue-Said said it was hard ‘not to feel a little bit excited’ when listening to Andy.
“At last we have somebody who sounds really excited, sounds really enthusiastic,” she said. “It feels like he’s given us all hope and something to wake up and feel positive about.”
However, she said the Budget would show ‘whether this Government actually does support business growth’.
Julia said the last Budget’s rise in employer National Insurance contributions had made employing people ‘generally prohibitive’.
“We’ve got a skills strategy, but what is the point if you can’t employ people because it’s too costly?” she asked.
Julia also said outbound travel still suffered from a perception problem in Whitehall, where it is seen as money leaving the UK rather than an economic driver.
ABTA Director of Public Affairs Luke Petheridge said the Government was ‘talking a good game’ across the industry’s three main challenges of competitiveness, skills and decarbonisation.
“The administration, even where the Ministers have remained the same, are engaging in a more responsive manner than what they were prior to the change of government,” said Luke.
“I think in engagement times, across government, we’re getting really, really positive messages from them.”
He said scrapping Air Passenger Duty in the Budget would be ideal, but more realistically, he is hoping for a real-terms freeze, saying that the tax is now affecting where airlines choose to base aircraft.
Luke also called for business rates reform that helps high street travel agents.
Chief Executive of UKinbound Joss Croft said an early win from the new Government was a commitment not to introduce entry fees for international visitors to the UK’s national collections.
“People choose a destination based on whether they will feel welcome and whether it offers value for money. Introducing a charge for international visitors cuts across exactly those two,” he said.
However, Joss urged the Treasury to review its claim that reintroducing tax-free shopping would cost £2 billion. “I don’t think anyone believes that £2 billion cost,” he said. The figure ignored the extra spending from longer, more frequent visits, he said, while pointing out that the UK is the only major European destination not to offer tax-free shopping.
An overnight visitor levy in England now looks inevitable, added Joss, but how it works is ‘still up for grabs’. He praised the fixed-rate schemes in Manchester and Liverpool as simple for customers and businesses. By contrast, he said Edinburgh’s percentage-based levy takes accommodation providers an average of eight minutes per booking to reconcile.
He saw a ‘silver lining’ to the levyl as regional mayors who rely on its income will have ‘skin in the game’, which could make them allies in lobbying central government on VAT, tax-free shopping and visa costs.
