Abta: ‘Give travel the right tax and policy framework to prosper’

Despite the strong bounceback for travel, things are still downcast elsewhere in terms of the wider economic picture. The chancellor will be looking to show the government has a plan not only to guide the economy through current challenges, but also to restore growth in the years ahead – an important task given the next general election is on the horizon.

Recent statistics from Lloyds Bank note that travel and tourism, including travel agents and tour operators, are the second fastest growing sectors of the UK economy currently.

This chimes with Abta’s own recent research, highlighted to Treasury in our Budget submission, which finds that international travel will lead the UK’s economic recovery. Our analysis found the outbound sector is expected to grow 15% by 2027 (compared with 2019 levels), outperforming the wider UK economy. With the government in need of growth, this is a message we – as an industry – can’t stress enough.

Make APD work for travel

This is also why, despite the government’s message about tax cuts, Abta continues to call out the uncompetitive nature of the UK’s approach to Air Passenger Duty. With an APD increase of 12.6% announced in the Autumn Statement, we risk slipping further behind international competitors.

We’ve always been clear that the industry should make a fair tax contribution, and that we need to play our part in delivering a transition to a sustainable future for UK aviation.

However, APD continues to be a tax that isn’t structured to incentivise cleaner or greener flight choices, while none of the revenues being made are reinvested in ensuring the UK leads the way on the transition to sustainable fuels, or the development of new technologies.

Fiscal policy is just one way in which government decisions impact our members’ businesses, there is also the regulatory side. We know big changes are potentially afoot when it comes to Atol reform and the wider consumer protection landscape.

Our focus right now is getting insight from our members – and the wider financial protection industry – to ensure the CAA is fully informed on what the industry thinks of the future of financial protection and what their proposals might mean for the industry.

Abta continues to champion our industry, promoting the £49 billion we add to the UK economy every year and the more than 800,000 jobs that our sector supports. Our message remains that we need the right tax and policy framework to unleash the huge potential that exists within our industry.

Whatever the chancellor says when he stands at the despatch box on 15 March, Abta will continue to spread the message of the importance of our industry for the UK economy to government and across the political spectrum.

Luke Petherbridge is Abta’s director of public affairs.