A travel agency group boss responded to today’s mini-budget by urging the Liz Truss government to be “more supportive” of the sector amid a post-Covid hangover.
The ‘fiscal event’ saw both personal and corporate tax cuts among other measures including the introduction of VAT-free shopping for overseas visitors.
Advantage Travel Partnership chief executive Julia Lo Bue-Said welcomed what she described as new chancellor Kwasi Kwarteng’s “bullish” mini-budget.
She said: “Any measures that ease the financial strain on consumers, such as the energy freeze caps and tax cuts, is positive news for our industry as it will give consumers more disposable income.
“However, our industry continues to operate in highly challenging times.
“Covid restrictions remain in many parts of the world and travel companies continue to have the strain of servicing debt on loans secured from the pandemic, whilst having to operate in conditions that continue to be hampered by a post-Covid hangover.”
She added: “The travel industry has received no sector specific support for the past few years, whilst trading in the most challenging times on record.
“We are therefore hoping this new cabinet will be more supportive of our sector moving forward and the see the value of SMEs as a key part of a global Britain for the future.
“In this context, we were particularly pleased to hear the reference in his speech to supporting what he referred to as the country’s Great British Retailers going forward.”
In other responses, Aito executive director Martyn Sumners described the mini-budget as “positive news” for consumers, with tax cuts, national insurance reductions, an increase in stamp duty threshold and assistance with energy bills.
“It is very tough out there for everyone, and this will go some way to easing consumers’ considerable worries,” he said.
“As far as the travel industry is concerned, we are certainly not out of the woods yet, with some travel restrictions still in place, plus aviation challenges which impact on everyone.
“Having to repay debt when you are still not able to operate as normal remains very difficult for SMEs.
“Aito would welcome dialogue with the new cabinet on how we can work together to help the small businesses that are the lifeblood of the industry, and which also act very much as a seed bed – and inspiration – for larger companies, too.”
UKinbound chief executive Joss Croft said: “We are incredibly pleased that government has listened to the tourism and retail industries and will be introducing a modern, digital VAT-free shopping scheme.
“This is a significant win for Britain PLC that will drive growth, provide a boost to high streets across the country, and lay the ground work for the UK to become an international shopping hub, driving tourism and export earnings into the UK.”
Abta director of public affairs Luke Petherbridge said the government “could have gone much further” with its plans to support businesses beyond the current financial year.
“We strongly urge the government to take the opportunity to use the full budget statement to extend business rates relief support beyond April 2023 and to look at how government could work with the banks to ease the pressure of Covid loan repayments,” he said.
“We’ll also be working to make the case to government that the support with energy bills needs to be available to travel businesses beyond the initial six month period, especially given travel restrictions were only removed in March 2022, and the industry is behind other sectors in terms of its recovery.”
Key points of the mini-budget:
- The top rate of income tax is being abolished and the basic rate will be cut from 20% to 19% from April 2023. The UK will have a single higher rate of income tax of 40% next year with the additional rate of 45% axed.
- The planned increase in corporation tax from 19% to 25% next year has been cancelled.
- The 1.25 percentage point increase in National Insurance will be scrapped from November, saving workers on average £330 per year
- A cut in stamp duty will see homebuyers will not pay the duty on the first £250,000 of a property’s value, instead of the current level of £125,000. First-time buyers will not pay stamp duty up to £425,000, up from £300,000.
- Planned increases in the duty rates for beer, cider, wine and spirits will be cancelled.
- Introduction of VAT-free shopping for overseas tourists to UK.
- No mention was made of fuel duties.