Luke Petherbridge, director of public affairs at Abta, previews the chancellor’s autumn budget
The last month has been an incredibly busy, and head spinning, time in UK politics. Following a Conservative Party Conference during which the prime minister, Rishi Sunak, seemingly signalled a rightward shift, and an uneventful King’s Speech on November 7, last week’s reshuffle caught everyone by surprise.
Once again, the question being asked is what is the message that the Sunak administration wants to put out and how does it plan to position itself in the general election that lies ahead?
The autumn statement on Wednesday will be a chance for the chancellor, Jeremy Hunt, to set out a clearer stall on behalf of the government, and to start laying the foundations for the election campaign, which must occur before the end of January 2025.
The reshuffle was dominated by the return to frontline politics of former prime minister, David Cameron, as the new foreign secretary, and departure of former home secretary, Suella Braverman. The latter’s determination to settle scores promises to continue filling newspaper columns for a while yet. However, for our industry, the more notable changes came at ministerial level.
While the departure of Baroness Vere as aviation minister is a loss, as is the shuffling of trade minister, Nigel Huddleston, who had been committed to promoting the role of tourism in trade in his post in the Department for Business and Trade, it is also an opportunity. Both take up new roles in HM Treasury which should only serve to strengthen the industry’s voice in that critical department and across government in time.
Abta will be engaging with the new ministerial teams across our key departments, especially the aviation minister, Anthony Browne MP. With little time ahead of the election, it is crucial the minister works with industry, and colleagues across government, to make progress in critically important policy areas, including the development of a domestic industry in sustainable aviation fuels.
The UK risks falling behind continental and international rivals in the race to develop this industry of the future, and we cannot afford to lose another year or so before we begin to act. If the UK, which as an island nation is a leading aviation economy, does not take the lead in domestic production of SAFs we will find ourselves relying on imports from elsewhere and ruing the loss of jobs and economic activity for decades to come.
Turning back to this week’s autumn statement, Abta submitted our asks to HM Treasury back in October, and we’re keen to see a statement of intent from the chancellor that the government is prioritising getting the economy growing.
Stimulating business activity, and ensuring people are confident to spend their hard-earned money, is the best way to achieve growth. To that end, we pushed for the extension of business rates relief for the agency community, raised concerns about the UK’s punitive rates of departure taxes, and called for long-term investment in the sector, including on transport infrastructure, and around the development of SAFs and alternative fuels such as hydrogen and electric flight. We also reiterated our calls for the reform of business rates to ensure a level playing field for all businesses and to provide a much-needed boost for our high streets.
The reality is that at this point in the political cycle any new policies adopted will have limited effect before people go to the polls, but tax announcements can help to provide a direction of travel and to deliver a steer to the electorate about future intentions.
It’s clear the chancellor will want to address the overall level of taxation both for businesses and for consumers, although the bigger ‘giveaway’ for the latter is expected to be held back for the Budget in the spring. As the sector continues to recover from the pandemic, amid a cost-of-living crisis, and with a challenging geo-political backdrop, targeted action is needed on tax to incentivise businesses to invest and to keep the economy growing.
Abta’s research, which has been borne out by economic activity over the last year, is that travel has the potential to be an important part of the UK’s growth story in the years ahead. It was encouraging to hear the transport secretary, Mark Harper, at Airlines 2023 on Monday, acknowledge that our industry will be critical to getting the economy growing.
We’ll be hoping to see a sign on Wednesday that our sector’s growth message is getting through elsewhere in government too, and ensuring it does will be a major focus for us at Abta in 2024.