Abta: Budget does not go far enough to support travel
James ChappleChancellor Rishi Sunak’s Autumn Statement doesn’t go far enough to support the recovery of the international travel industry, Abta chief executive Mark Tanzer has warned.
Tanzer said after travel was subjected to tighter government-imposed restrictions than almost any other industry, its plight deserved greater recognition on Wednesday (27 October). He also stressed that while travel was not only one of the hardest hit sectors, it would be one "critical" to the UK’s wider economy recovery.
"It is good the government has responded to our calls to continue business rates relief by cutting rates by 50%; this should help high-street travel agents," said Tanzer. "However, this is a sector that has faced tighter government-imposed constraints on trade than almost any other, including severe restrictions throughout the critical summer season.
"The chancellor could have done more to recognise this fact by providing tailored recovery grants to travel agents, tour operators and travel management companies. Instead, while other struggling sectors – such as theatres and pubs – will get additional tax reliefs and duty cuts, there is very little in the Budget to support many travel businesses as they attempt to recover from the biggest crisis the sector has ever faced."
Tanzer also touched on the chancellor’s decision to shake up Air Passenger Duty (APD), with positive and negative consequences for travel; domestic APD will effectively be halved thanks to the creation of a "return leg exemption", while a new "ultra long-haul" rate will introduced.
"While we support the decision to remove double-taxation on domestic Air Passenger Duty (APD) from April 2023, it is regrettable this cut will be partially offset with increased rates for long-haul flights," said Tanzer. "With the industry only at the beginning of its recovery, now is not the time to be announcing future tax rises on the sector.
"As it stands, APD is not – and has never been – an environmental tax; the revenues are not hypothecated or used for environmental purposes, such as investing in the development of sustainable aviation fuels, and the tax does not encourage use of newer, cleaner aircraft.
"Looking to the medium and longer term, we are supportive of fundamental reform of APD with the aim of creating fair taxation within the travel industry, which reflects the economic benefits of the sector and recognises the environmental impacts of travel.”
‘Forgotten again’
Travel specialist audit, tax and consulting firm RSM echoed Tanzer’s comments. Ian Bell, RSM’ head of travel and tourism in the UK, said: "This UK-centric Budget will be good news for regional airports with the announcement of a lower rate of Air Passenger Duty for UK flights and the extension of the Airport and Ground Operation Support Scheme for a further six months.
"However, the government needs to take a more global outlook and increase specific support to the wider travel sector. Stayactions are only part of the puzzle, and without international travel the sector, which has been hardest hit and seems to have been forgotten again, will struggle to recover post-pandemic."
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