Bosses in the travel and tourism sector have issued mixed responses to today’s autumn statement, delivered by chancellor Jeremy Hunt.
The main rate of National Insurance will fall from 12% to 10% from January 6, 2024, and the National Living Wage will increase from £10.42 to £11.44 an hour from April.
The 75% business rates discount for retail, hospitality and leisure firms is extended for another year, while there is a freeze to the small business multiplier, which will protect around 90% of ratepayers for a fourth consecutive year.
The business rates discount is part of a support package worth £4.3 billion over the next five years aimed at helping high streets – but there is a 6.7% increase to headline business rates.
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Mark Tanzer, Abta chief executive, said: “The extension of business rates support will benefit many travel agents and it’s encouraging that the government has listened to our calls in that area.
“While travel has seen a good recovery since the pandemic, many businesses still see the impact of Covid on their balance sheet as they face large debt repayments. This continued support will help companies as they continue to recover, especially as businesses are operating against the backdrop of high inflation and increased costs.
“But travel isn’t just focused on recovery, it is also looking to grow, which is why it was encouraging to see the chancellor pitch this statement as a plan to get the economy growing.
“Abta’s research shows the travel industry’s growth is set to outpace the general economy – with outbound travel due to grow by 15% by 2027, compared with 2019 levels.
“However, to realise that potential requires government to work in partnership with the sector to put in place the right policy framework. That will also require fresh thinking around skills and recruitment, so we very much welcome that the government says it is looking at extending youth mobility schemes. It’s important this includes agreements with European countries too.”
Julia Lo Bue-Said, chief executive at the Advantage Travel Partnership, and Noel Josephides, director at Aito The Specialist Travel Association, jointly welcomed the “key points”, saying: “Anything which reduces the tax burden on businesses and puts more money back in the pockets of consumers is good news for businesses operating in the UK outbound travel sector and for those servicing businesses with travel management solutions.
“The measures announced today are a step in the right direction.
“We also welcome the government’s continued support for small business and high streets, in particular the business rates support package.
“While the overall tax burden remains too high, we appreciate the fiscal constraints on the government at this point and hope that further reductions to business rates will be announced over time.
“Over the last 12 months, and particularly since the end of the pandemic, we have seen a very buoyant UK outbound travel industry, and we are looking forward with cautious optimism to 2024 and beyond.”
Steve Witt, co-founder of Not Just Travel and its recruitment arm, The Travel Franchise, commented: “The autumn statement is great news for both consumers and businesses. First of all, people will have a bit more money in their pockets, and we’re sure they’ll choose to spend it to upgrade their holidays.
“Secondly, this will only boost the number of people seeing the benefits of starting their own businesses due to the reduction of National Insurance contributions for the self-employed. Now, there is more freedom for our members to earn and more profits for them to hold on to.”
However, Joss Croft, chief executive at UKinbound, described the statement as “a missed opportunity”, adding: “Today’s autumn statement fails to harness the substantial economic growth potential of the UK’s inbound tourism industry, disregarding the sky-high price of international travel, which leaves us one of the most expensive countries in Europe to visit.
“The UK is at a significant competitive disadvantage but with the right support from government, international tourism to the UK could immediately and significantly boost businesses and local economies throughout the four nations.
“The failure to bring back VAT refunds for international visitors is a significant oversight and one that will hit UK high streets and boost those in France, Germany and Italy.
Karen Dee, the Airport Operators Association’s chief executive, also said the lack of action on VAT refunds or arrivals duty-free stories is a missed opportunity.
“These measures would have given a boost to airports, UK high streets, retailers and manufacturers all over the UK, through increased consumer spending in UK-based outlets. We will continue to make the case for these measures,” she said.
She welcomed the confirmation that full expensing will be made permanent, as it will enable more investment in new, greener vehicles and other machinery.
Meanwhile, Helen Dickinson, chief executive of the British Retail Consortium, said: “Retailers and their customers have been sold out by the chancellor’s statement, which does not do enough to support shops, shoppers, and an industry that employs over three million people, and many more across its supply chains.
“The chancellor has poured fuel on the fire spreading across our high streets with a tax hike on shops and other businesses. His decision to increase the business rates standard multiplier will cost retailers hundreds of millions every year.
“And with the chancellor introducing the largest increase to National Living Wage on record, retailers are under ever-increasing cost pressures.
“The extension to the Retail, Hospitality and Leisure relief and the freezing of the Small Business Multiplier is a gesture of support to high streets and while it may help some smaller businesses, it does nothing for those retailers that provide the lion’s share of employment, investment, and low-cost essentials for customers.
“The chancellor has done little to prevent the decline of our town and city centres and his decision will see thousands of stores pushed into the red.
“The country needs wholesale reform of our broken business rates system.”