This page is being updated following the Budget announcement at 12.30pm. Last update: 18.08
Travel industry associations and businesses have responded to the chancellor’s budget statement, which confirmed measures including an extension of furlough to the end of September, the extension of business rates relief to the end of June with a two-thirds rate for the remainder of the year, and an extension of lower VAT rates for hospitality and tourism businesses, with the 5% rate running to September 30 and an interim 12.5% rate in place until April 2022.
However, despite calls there was no mention of sector-specific support for travel or aviation.
Mark Tanzer, chief executive, Abta:
“We’re pleased to see the government has responded to many of our calls to extend furlough, business rates relief and VAT reductions. This will help to support jobs and businesses over the coming months. However, the chancellor must move beyond the government’s blind-spot concerning the impacts of international travel restrictions, and make support available to all travel companies whose business has been effectively closed by public health policy.
“The chancellor said there are extra grants for struggling businesses, yet many travel companies remain excluded from this critical support, despite not being able to generate income over the last 12 months. By focusing the grants on retail outlets, businesses including tour operators, online travel companies and home-based workers remain shut out of this much needed support.
“It is also worth remembering that with overseas travel still closed, in the short to medium term, the income retail travel agents can generate will still be limited. As such, it’s important they qualify for higher levels of support.
“We urge the government to reconsider this approach by making grants available to all travel businesses, not just those with retail premises, recognising that the reopening of overseas travel will come later than the other sectors and will likely to be gradual. The chancellor has said he will do all that is necessary to support struggling businesses and these words should be matched with action to support the whole travel sector.”
Karen Dee, chief executive, Airport Operators Association:
“Aviation has been the hardest-hit sector in the pandemic, but the Budget is blind to the impact of the near-complete shutdown of international travel. While the extensions of the Job Retention Scheme and airport business rates relief are very welcome, they are not nearly enough given the scale of Covid-19’s impact. Combined with the long‑haul APD increase, which is a very damaging blow to an industry already on its knees, this is not a Budget for a global Britain.
“Aviation will have a long road to recovery, with passengers not expected to return to 2019 levels until the late 2020s. An abrupt end to government support for aviation in a few months’ time will lead to difficult decisions for airports, including on employment levels. The UK’s global competitors have recognised this and have backed their airports and aviation sectors with support far exceeding the UK’s efforts to date.
“The Scottish government and Northern Ireland Executive have already taken steps to continue crisis support for airports, including full-year rates relief in Scotland. The UK government must work urgently with devolved administrations to set out a four-nation Aviation Recovery Package of long-term financial and policy support to boost the recovery of the UK’s aviation connectivity.
“Only with such support will the work of the new Global Travel Taskforce have any chance of a successful take-off towards a world-leading UK aviation sector.”
John Holland-Kaye, chief executive, Heathrow airport:
“The chancellor talks about protecting jobs and livelihoods, fixing the public finances and laying the foundations for the future economy, and yet he continues to ignore the UK’s aviation sector. He clearly doesn’t understand that all three depend on a strong aviation sector delivering the trade, tourism and investment that power vast parts of the British economy.
“Failing to even mention aviation, let alone provide full business rates relief for airports in today’s Budget, is a missed opportunity to ensure the sector can play a key role in the country’s economic recovery. The absence of any meaningful support from the government in the face of tough restrictions which have ground travel to a halt will weaken the sector and limit UK growth at the time it is needed most.”
Joss Croft, chief executive, UKinbound:
“The extension of furlough is very welcome news for our industry, as is the business rates holiday and its further cut. We’re also pleased that leisure grants of up to £18k will be available for businesses that need to stay closed for longer, but we urgently need confirmation from government that tour operators, coach operators, language schools and event organisers will be eligible for these grants, having been unfairly excluded to date.
“It was however disappointing and a huge missed opportunity to hear that sector-specific support, which has been rolled out in Scotland, will not be provided. The VAT cut will be beneficial to hospitality and domestic tourism businesses, but its impact on inbound tourism, and the export value it delivers that will take longer to restart, will be minimal.
“The inbound tourism industry still has a long road to recovery and the government needs to recognise this. International inbound tourism to the UK can play a crucial role in supporting the country’s economic recovery, and it’s levelling-up and Global Britain agenda, but this will only be possible when it’s safe to travel again. Until then we need government to continue its dialogue with the industry and understand that further support is urgently required.”
Tim Alderslade, chief executive, Airlines UK:
“We welcome the extension of the Job Retention Scheme, which has already saved tens of thousands of jobs across UK aviation. This will enable carriers to retain staff as we await the restart of the sector, and provide much needed certainty to airlines needing to make critical planning decisions over the coming months.
“Ultimately, it is the reopening of international travel that will ensure we still have an aviation sector but we are clear that without a summer season airlines will require a bespoke support package that goes beyond loans.
“That said, there are things the government can be doing to support the restart and the continued absence of the promised Treasury consultation into APD – a full 12 months since its announcement by the chancellor – is a source of much frustration and bewilderment.”
Gary Lewis, chief executive, The Travel Network Group
“We welcome the announcement of measures of support that bring financial help throughout this year and into next.
“The extension of furlough until September will create much-needed breathing space for many of those employed by the sector. The continued self employment support extended and access to new restart grants will combine as a lifeline for many businesses striving every day to survive until travel can reopen.
“The 100% business rate holiday until the end of June and then a further nine-month tapered benefit will also help many manage the challenges of increased debt whilst trading our way into 2022.
“Despite seeing green shoots of recovery, there is still a long road ahead for the industry and it now is essential the Global Travel Taskforce and then government agree the protocols to open up the borders safely to enable a full recovery not only for our travel industry but the whole economy.”
Julia Lo Bue-Said, chief executive, Advantage Travel Partnership:
“Whilst the extension of the furlough scheme will be positive news for many sectors, travel businesses continue to be unable to take full advantage of the support package in its current form. Travel agencies do not make any money until their clients travel, but they still have to employ people to facilitate bookings and amend cancellations and refunds when required. Therefore, even while there is no money physically coming through the door, furlough simply doesn’t work for employers in this sector by the very nature of the business.
“The criteria that needs to be met by businesses to be entitled to the government grants means that 50% of our members do not qualify because they work from home or an office and do not operate from a retail premises. Support with deferral of business rates and grants for all travel agents, regardless of their operating environment are what we need to help travel agents survive. There is an immediate pressure on these businesses because they have been unable to earn any income due to government imposed restrictions for 12 months now.
“While the plan to ease lockdown has initiated some positive signs of recovery in terms of enquiries and bookings, travel agents are in a state of financial limbo because the details of how and when we will travel is still fuelled with uncertainty and restrictions. We know testing is critical to the recovery of travel, and we need government to take a lead on bringing down the cost of testing so that a future holiday is still affordable for families. The media focus to date has been on leisure travel, however the government must not forget the lucrative business travel sector which will be intrinsic to the recovery of many other important sectors to the economy.”
Joanne Dooey, president, SPAA:
“Elements of the budget are undoubtedly welcome. The extension of furlough will help our members to retain staff, and they will be able to deploy staff flexibly as they, hopefully, move towards the reopening of their businesses.
“However, there still seems to be a fundamental lack of understanding of our industry. Throughout the last 12 months, the travel industry is barely mentioned in terms of support announcements whilst other sectors such as retail and hospitality are frequently referenced.
“The travel agency sector is not wholly shop-based and we wait to find out how travel is being classified for the purposes of restart grants. Many of our colleagues are home workers who run viable and vibrant businesses, yet they are not included in many measures; the eligibility for which seems to rest on bricks and mortar premises. “In a similar vein, business rates support is only a benefit if you have an office/shop front.
“The vast majority of travel agents have been unable to generate new revenue since the pandemic started. And, they had to refund much of the revenue they had raised prior to this due to the financial model upon which travel rests – namely that the agent only gets their income when the client actually travels.
“We continue to lobby both the UK and Scottish governments for them to produce a roadmap out of this for the travel industry and to outline the role that both testing and vaccination will play in this.”
Jacqueline Dobson, president, Barrhead Travel:
“We welcome the news that furlough has been extended until September as this will be key to safeguarding jobs in the travel industry until border restrictions are lifted and the industry can begin its recovery.
“With the confirmation that furlough contributions for employers will increase from July, we must, in turn, see restrictions on travel ease in tandem to balance our recovery. As we wait in anticipation for further guidance from the Global Travel Taskforce, it is now imperative that this time is used for all four devolved nations to agree a collective response to reopening both inbound and outbound travel.
“Decisions about travel must be made in unison across the UK as a disjointed approach will further hamper our industry’s recovery during 2021.”
Clive Wratten, chief executive, Business Travel Association:
“The BTA welcomes the extension to the furlough scheme which will save jobs across the sector. However, business travel has again been excluded from vital grants at a time when travel management companies are precluded from doing their jobs by international travel restrictions.
It is imperative that the new Global Travel Taskforce brings forward a framework in which business travel is fully integrated, and enables it to resume and contribute to the UK economy once more.”
Alistair Rowland, chief executive, Blue Bay Travel and Abta chairman:
“Whilst the commitments to extend furlough, business rates holiday and VAT savings are helpful, there is little to support industries such as ours with specific issues, such as agents and operators who do not operate from retail premises.
“Equally, whilst the self-employed support scheme was extended, there is nothing to fill the gap for agents who operate as limited companies and pay themselves through dividend.
“Furlough cannot be maximised as the scale of amendments and cancellations continue, and are likely to until well into the summer, while the new loan scheme, underwritten by government, will help businesses but only increases debt to already damaged businesses who will struggle to achieve bonding in 2021.”
Danny Callaghan, chief executive, Lata and chair, Travel Industry Alliance:
“We welcome the extension of the furlough scheme to the end of September, as this will be a vital period for the travel industry. However, as a sector it will take months for us to wean off the furlough scheme, as business starts to come in, much of which will be deferred bookings and redemption of credits – it will be months before we see any significant new revenue coming into the sector, and we may well need furlough support until the end of 2021 to stave off significant job losses later in the year.
“The extension of business rate relief and the introduction of Restart Grants will be welcome for those parts of our industry that have a retail store front, but the majority of the sector continues to be excluded from this key piece of support. I was able to make this comment to the All Party Parliamentary Group for the Future of Aviation yesterday, and I hope that the parliamentarians that were present will bring this to the chancellor’s attention and lobby for a broader inclusion that will benefit the travel industry.”
Kerry Golds, managing director, Abercrombie & Kent and Cox & Kings:
“Despite vaccine progress, the pandemic continues to challenge businesses, so an extension to the furlough scheme is a welcome step in ensuring the travel industry’s survival.
“Yet, given [the chancellor] introduced industry-specific support for the arts, retail and hospitality, there was still no mention of the beleaguered travel industry. Arguably, international travel will take the most time to recover to levels of £200 billion it contributes annually to the UK economy, and the employment of four million people.”
Brian Strutton, general secretary of pilots’ union Balpa:
“The chancellor said not one single word about aviation in his budget. I am utterly dismayed that he can ignore this industry which is clearly going to be the last to recover from Covid. While there was sector-specific money for non-essential retail, hospitality, leisure, gyms, personal care, arts, culture and the housing sector, there was not one word of backing for our vital sector.
“This is a massive slap in the face for the industry that has supported repatriations, brought in vital supplies and faced never ending changes to restrictions and rules and a total shutdown as a result of government policy.
“Mr Sunak has totally abandoned aviation and failed to acknowledge just how difficult times are for the sector right now. This budget could push many airlines further in to a death spiral and cost even more jobs. We must now look to the vital Global Taskforce report on April 12 to give our aviation industry certainty and security and help us to plan a way though this crisis.”
Manuel Cortes, general secretary, TSSA:
“Sadly the chancellor has presided over a wasted opportunity in his Budget, again ignoring the plight of the travel sector and others who have been so badly hit in the pandemic. While our union welcomes the extension to the furlough scheme, we know that many workers and businesses, not least in our travel trade, will be no less worried about their prospects after hearing from Rishi Sunak.
“Time and again our union has told the government they must leave no stone unturned when it comes to securing the future of our high street travel agents. Yet we heard nothing. Time and again we have warned that Eurostar – our green link to Europe – requires intervention, again we heard nothing. What we heard from the despatch box today was a lot of reheated announcements, coupled with showbiz and spin.”
Nick Irving, partner and head of aviation at executive search firm, Howgate Sable:
“It’s really disappointing not to see any measures geared towards aviation. Of course, the extension of the furlough scheme is positive, but a more specific package is required to address the now critical issues facing the sector.
“It would be helpful if the government could let us know its plan to support aviation, or if indeed it has one at all, as the sector is one of the key drivers of the UK economy, and any broader support package that doesn’t include it specifically is surely missing a trick.
“I would remove APD whilst implementing other direct measures to protect aviation companies as well as a range of actions to drive demand and enhance customer confidence in booking their next trip with the surety the government has their backs. Actions that improve customer confidence will ultimately help the sector help itself.”
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