Abta welcomes Budget pledge of 'permanently lower business rates' for retailers

Abta has welcomed the government’s decision to confirm a “permanently lower level of business rates” for retail and hospitality firms in the Budget.

However, it warned about the cumulative impact of increased taxes and employment costs on businesses in a view echoed by the Scottish Passenger Agents’ Association (SPAA).

Abta chief executive Mark Tanzer said: The success of the travel industry has never been more critical to the overall health of the UK economy.

“As such, the move to support high street businesses, including travel agencies, through a permanently lower level of business rates, is very welcome.

“However, Abta remains concerned about the cumulative impact of taxes and levies on travel businesses and consumers.”

Tanzer added: “The introduction of a wide range of new taxes and tax increases, largely targeted at middle- and higher-income earners, is something that will need to be monitored carefully.

“With travel powering the UK economy over recent years, any negative impact on consumer demand for holidays would directly contradict the Chancellor’s own growth agenda.

“Similarly, changes to employment and business taxes, including further increases in the National Living Wage, especially for younger workers, will increase the cost of employment.

“The government must be careful not to deter businesses from hiring staff, especially those younger people who are looking to start their careers in travel. However, there were also some positive moves in this area, including enhanced access to apprenticeships for SMEs.”

SPAA vice-president Alan Glen said: “The increasing burden of National Insurance and taxation is now a direct barrier to employment.

“Every time the cost of employing someone rises, it becomes harder for travel businesses to take on new staff, to invest in apprenticeships or to grow. It’s sucking profit out of the sector — and then taxing what’s left.”

He added: “There’s no support to help people into work, and no assistance for gaining the qualifications and training needed to grow skills in the travel trade.

“Meanwhile, high street businesses that provide local jobs and personal service are being decimated by global online giants that are not taxed in the same way. It’s an uneven playing field – and it’s punishing the very businesses that are committed to staying local, paying their fair share and supporting communities.”

Not Just Travel co-founder Steve Witt described the Budget as "neutral" and voiced hopes that consumer confidence would improve as the fiscal measures outlined would have "no big immediate impact on consumers’ income".

He said: "Today’s Budget has been one of the most anticipated in modern history. As a result, many consumers have been putting off buying decisions until after the Budget. They wanted to know what disposable income they would have.

"The Budget shows there is no big immediate impact on consumers’ income. Consumer confidence will increase as they realise there are no big immediate changes. As a result, we can expect an influx of bookings for both last-minute and 2026 and beyond.

"Overall, Labour needed to be strategic in their Budget. They couldn’t create too many divisive changes; otherwise, they’d alienate the population. Therefore, this has been a neutral Budget."