Industry leaders expect little to cheer in the forthcoming Budget on October 30 amid government warnings on the state of the public finances.
But Abta board members speaking at the Travel Convention on Tuesday were united in arguing the pessimism of prime minister Keir Starmer and Chancellor Rachel Reeves since the July general election has had little impact on travel demand despite appearing to damage consumer confidence in the economy.
Reeves is expected to raise taxes significantly in the Budget although she has ruled out increases in income tax, national insurance, VAT and corporation tax.
Abta chief executive Mark Tanzer (pictured) told the Convention: “Anything that takes money out of people’s pockets is going to impact on spending, but there are very different levels of exposure to that.”
He noted: “Spending on holidays is at record levels.”
EasyJet holidays chief executive Garry Wilson said: “I don’t think there will be anything to help us in the Budget.” But he added: “We’ve seen the prioritisation of travel [by consumers]. The resilience in travel post-Covid has been phenomenal.”
Wilson said he is “confident we can grow the business another 20% next year without pulling margins down”.
Abta board member Derek Jones, non-executive director at Not Just Travel, agreed: “We don’t expect anything positive from the Budget.
“The mood music from the government has been generally pessimistic – and that is probably tactical. But just because Keir Starmer has chosen to be pessimistic doesn’t mean we need to be. It’s easy to get sucked in by it but doesn’t mean we’re affected.”
Abta director of public affairs Luke Petherbridge told Travel Weekly: “The pessimism has clearly had an impact on the overall economy despite interest rates coming down, but it doesn’t appear to have fed through to travel. There seems a divergence.”
He suggested Abta is “pretty well placed” to engage with the government given its focus on growth and said: “The early indications are the government is listening.
“We’ve only had three weeks of Parliament since the election and, if you look at what the government has done – we’ve had the sustainable aviation fuel (SAF) mandate and revenue certainty mechanism [for SAF], youth mobility is moving up the agenda and apprenticeship law reform is coming.”