Abta and the Business Travel Association have welcomed aspects of the government’s Autumn Statement, with the BTA saying it was a “move towards stabilising the economy”.
Chancellor Jeremy Hunt today announced tens of billions in tax rises and spending cuts and acknowledged that the UK was in recession.
Mark Tanzer, Abta chief executive, said: “We’re pleased the government has responded to our calls to extend the business rates support for retailers. This is something we have been consistently raising with government for months and it is welcome that they have chosen to act on our recommendation.
“The rates relief provides much-needed breathing space for retail travel agents as they work to recover from the detrimental impacts of Covid-19 travel restrictions.
“However, from the overall package, businesses will continue to face higher costs including through the planned revaluation of business rates in April 2023. We will continue to stress to government the unique position of the travel industry given the reopening of international travel was significantly later than the rest of the UK economy and the need for ongoing support.
“The government is also planning to increase Air Passenger Duty in line with RPI inflation from 2024-25, While the delayed increase does provide a window for businesses to continue to build on their recovery, it will add extra cost to business trips and holidays in future.”
Clive Wratten, BTA chief executive, said: “It is vital that we get the wheels of the economy moving again to support businesses of all sizes. We all face tough months ahead but there is now hope of recovery.
“Business travel will play a central role in the growth of the UK if transport links are prioritised and transport companies supported. We are delighted that the government will not be scrapping HS2, or the development of plans for northern rail. Now is the time to keep the country connected.”
Commenting on long-term commitments, Hunt said: “We will deliver the core Northern Powerhouse Rail. HS2 to Manchester. East West Rail.”
Hunt told the Commons: “Today we deliver a plan to tackle the cost-of-living crisis and rebuild our economy. Our priorities are stability, growth, and public services.”
He will also reduce the threshold at which the 45p rate becomes payable from £150,000 to £125,140. Those earning £150,000 or more will pay just over £1,200 more in tax every year.
And from April 2025, electric vehicles will no longer be exempt from Vehicle Excise Duty.
On business rates, he said: “It is an important principle that bills should accurately reflect market values so we will proceed with the revaluation of business properties from April 2023.
“But I will soften the blow on businesses with a nearly £14 billion tax cut over the next five years.
“Nearly two thirds of properties will not pay a penny more next year and thousands of pubs, restaurants and small high street shops will benefit.
“This will include a new government funded Transitional Relief scheme as called for by the CBI, the British Retail Consortium, the Federation of Small Businesses, and others, benefitting around 700,000 businesses.”
The National Living Wage will increase from April 1, 2023, so the rate for those aged over 23 will rise from £9.50 to £10.42 an hour.
Howard Cox, founder of FairFuelUK, welcomed the continuing freeze on fuel tax and plan to tax electric vehicles – but argued that a cut in fuel duty would cut inflation, increase wages, deliver business investment, grow GDP and generate more tax receipts.
Julia Lo Bue-Said, Advantage Travel Partnership chief executive, labelled the announcement “underwhelming and disappointing”.
“For small businesses that are continuing to try and trade their way out of the recent pandemic, today’s budget will be both underwhelming and disappointing,” she said.
“Businesses of any size, but especially SMEs, want to trade out of the economic crisis, securing investments, creating jobs and contributing to fiscal prosperity, with a focus on business growth.”
UKinbound chief executive Joss Croft said the decision to increase APD was a “hammer blow” to the recovery of inbound tourism and urged the chancellor to go further and expand the business rates relief scheme to include non-retail businesses such as tour operators.