Abta’s Travel Matters gave a fair indication of how much travel matters to government. The event was more impressive than some of the politicians, says Ian Taylor
Abta’s fifth Travel Matters conference, held in London last week, was a good measure of Abta’s progress in public affairs. The association and its members should be pleased.
Aviation minister Robert Goodwill and shadow transport secretary Mary Creagh gave addresses and answered questions.
They were joined by Labour MP and former transport secretary Jim Fitzpatrick, by Tory MP Alok Sharma and by former cabinet member and Abta board member Lord Fowler.
There were parliamentary candidates from the three major parties and the head of aviation policy at the Department for Transport – a key figure in drafting the Atol regulations and advising the Department of Business (BIS) on a new Package Travel Directive.
Senior representatives of Heathrow, Gatwick and the scheme for a new Thames-estuary airport were also on hand to put their respective cases, and Graham Pickett of Deloitte gave his take on the economy.
It was an impressive programme. Yet I came away dissatisfied, in particular with the senior politicians. Goodwill gave a canter through government policy but said almost nothing.
He expressed “a little surprise” at the Jet2.com Appeal Court ruling. In fact, the ruling was barely a surprise at all.
If the government agrees that such extended compensation for delays will push up fares and could compromise safety, the question is what do ministers intend to do?
When it came to the Davies Commission, Goodwill reflected the fact that the Coalition (and Conservative) lines have changed since 2010. He said: “We do need capacity.”
But he would go no further than stating the obvious: “Politicians of all parties are going to have to grasp the nettle.”
Goodwill gave no indication that he or anyone else is going to grasp anything.
The minister came across as engaging if not wholly engaged. His Labour counterpart Creagh came highly recommended and was sharp-minded if somewhat prickly.
She appeared more direct than Goodwill on the subject of airport capacity while being even less forthcoming.
“Good air links are vital,” she said. “We want the UK to be seen as a global leader in transport.” Yet at the same time: “You would not expect any minister or shadow minister to say ‘I will follow what Davies recommends’.”
Creagh’s line on Air Passenger Duty (APD) was even less enlightening.
The shadow transport secretary appeared to criticise the Chancellor for taking so long to make a change to APD. But then appeared to criticise the hole this left in Treasury finances.
She said: “We had a decision abolishing APD bands C and D that will cost £250 million by 2018-19. The books are not balanced … any cut in APD needs to be balanced.”
Creagh made no acknowledgment of the fact that the sharp rise in APD rates came under Labour. Rather, she admitted not having read an industry report on the potential benefits of abolishing the tax.
The report, commissioned by the major airlines and produced by PwC at the suggestion of the Treasury, is surely required reading for senior figures at the Treasury and DfT? Creagh has been in the role eight months.
Her admission was among the more revealing moments of the day – certainly, in so far as answering the question ‘How much does travel matter to government?’
There were at least three other telling moments – two of them also relating to APD.
One of these came from Fitzpatrick, who supported a third runway at Heathrow and is viewed as sympathetic to the industry.
His view on APD was damning: “You have not won the argument. The government does not believe you. The opposition does not believe you. The Treasury is not persuaded.”
Fitzpatrick also pointed out, and he has a point: “The aviation industry does not speak with one voice. The industry has to get its act together.”
A second moment came when Labour Parliamentary candidate and former Abta head of public affairs Luke Pollard suggested: “We need a reality check.”
Pollard was clearly speaking from personal experience when he acknowledged: “There is a disconnect between the industry and the experience on the doorstep, where no one thinks about APD.”
There you have the nub of the problem the sector faces.
The third moment was possibly even more sobering.
It came from Graham Pickett, who gave a broadly upbeat assessment of the UK economy, saying: “Growth has come back. Business is confident. Consumer confidence is not bad. There is lots of good news.”
Nonetheless, Pickett noted: “We’re at a cross roads.” He suggested two reasons for concern.
First, he showed what he described as “a scary slide” on UK household debt, arguing: “We owed £1.443 trillion in Q1 2014 and that is forecast to rise to £2.25 trillion – it’s scary stuff if you fear interest rates going up.”
Second, he noted: “The industry has done very well in capacity management over the last three years. But I detect a slight change.
“Demand is probably down 1%-2% and capacity is up by 5%. I’m concerned.”
If those figures are right, and Pickett knows his stuff, so should we all be concerned.