Despite the more positive outlook for international travel, following the easing of restrictions, it will take time for travel to get fully back on its feet and ABTA says there remains an urgent need for the Chancellor to extend business support measures.
Next Wednesday (27th October) the Chancellor will stand up in the House of Commons and deliver his plans to support the UK economy in recovering from the COVID crisis. Last month, ABTA wrote to the Chancellor outlining what the Budget needs to deliver for the travel industry.
In their submission they asked the Chancellor to use next week’s Budget to:
- Provide an update on the additional £1.5bn to provide targeted support for businesses which have been unable to benefit from the existing business rates relief. This was originally announced on 25 March 2021 but the support has yet to be made available.
- Urge local authorities to prioritise travel businesses for financial support under the Additional Restrictions Grant funding – with £300m left unspent, councils need to make sure that travel agents and tour operators are getting this much-needed funding.
- Provide tailored financial support for the travel sector in the form of specific recovery grants for travel agents, tour operators and other businesses dependent on international travel.
They also stressed the need to make sure the right taxation framework is in place to support the industry’s recovery. ABTA have said that multiple members have reported concerns with plans to increase corporation tax to 25% from 2023, especially with the industry on a much slower recovery trajectory. ABTA has also supported wider calls for reform to the current business rates system.
They highlighted how it is important that a system is found that does not continue to disadvantage high street retailers, which are an important part of communities across the country.
ABTA’s Chief Executive Mark Tanzer is also calling for the Chancellor to look at the role of APD in the industry’s recovery. Over the last year and a half cuts have been seen to VAT to benefit the domestic tourism sector, but these cuts have no impact on companies selling package holidays or on the outbound travel sector.
APD is the only comparable measure that HM Treasury has at its disposal. ABTA explained how it supports a short-term reduction in this tax to boost recovery, but also continues to highlight the need for fundamental reform to deliver a more environmentally efficient regime.
As a Member of Sustainable Aviation, ABTA is asking the UK Government to work in partnership with the industry, through the Jet Zero Council, to deliver the policy framework, including airspace modernisation and investment in sustainable aviation fuels, that will be necessary to reach the Government’s carbon-reduction target.