Following the announcement of the Autmn Budget, AITO have claimed that it “will lead to a reduction in the public’s propensity to spend their money on holidays”.
Martyn Sumners, Executive Director of AITO, The Specialist Travel Association says: “This is a key watershed budget – for the travel industry, certainly, and for the whole of the UK. Our future as small and medium-sized businesses – and as citizens of the UK in our personal lives, too – depends on the Government recognising that it needs to restore confidence for both the public and businesses, and to decide to take brave and bold moves to put the economy, and our lives, in a much better place.”
Sumners continues: “On a straightforward human basis, we have to increase the national living wage. People earning such a modest income – £380 per week gross, ie before tax and NI deductions, and often with a family to support – deserve our admiration for juggling key household expenses on such limited funds. With the massive increases in the costs of both heating and electricity – warmth and food being the most basic of essentials for every man, woman and child, especially as winter approaches – no-one can contemplate people, whether young or old, being cold and hungry in the UK in the 21st century.
“That said, an increase in the national living wage will hit SMEs hard – especially our travel agency colleagues – on top of the desperate struggle for survival the travel industry has been through during the pandemic, with many being unable to make use of the furlough scheme due to the necessity for them to work to assist their clients to cancel or defer holiday arrangements.”
“Conversely, the less demanding windfall tax on the energy industry, currently posting profits of over £8 BN more per quarter than the norm, announced by the Chancellor, is a missed opportunity in these dire financial straits in which we find ourselves.”
Sumners continues: “Now having heard more about the Budget measures planned by Government, we believe that they will lead to a reduction in the public’s propensity to spend their money on holidays. Halving the capital gains tax allowance, and the increase in – and freezing of – many other tax allowance levels, some until after the next General Election, and up to even 2028, coupled with extreme inflation, will lead to a reduction in Middle England’s spending power and will not curb the demand for higher wages. No doubt the small print will bring other surprises to light. Revenge travel post pandemic may counter this to some extent; time will tell.”
AITO’s other key message to the Government post Budget is that it must deliver a simplified and cohesive alternative to the complex web of regulation that currently governs the travel industry. This would not only enhance consumer protection but would also impose fewer costs on operators. The capital thus released could then be invested in the people and skills that are essential to the future growth of the industry, with the resulting considerable employment opportunities.
