Aviation, travel and retail leaders hit out at ‘disappointing’ Budget

The Chancellor’s Budget came in for sustained criticism from leaders of the travel, aviation and retail sectors despite a welcome for the government support for households.

Airport Operators Association (AOA) chief executive Karen Dee said: “We would have liked moves to allow airports to establish duty-free shopping stores for arriving passengers.

“UK airports are still operating at a competitive disadvantage to their European counterparts, where most spending on duty-free allowances currently takes place.”

Dee said: “It’s also disappointing that no additional support for airspace modernisation and Sustainable Aviation Fuels (SAF) was announced by the Chancellor.

“Recovering from the effects of the pandemic and reducing the sector’s carbon emissions are the two key challenges facing aviation. Establishing the UK as a world leader in SAF would lead to the creation of over 20,000 jobs and almost £3 billion to the economy.”

However, she noted: “We’re pleased the government has acted to change pension allowances, something the AOA called for to help relieve the recruitment and retention challenge facing aviation. These measures will help attract people who left the jobs market due to the pandemic back to careers in critical roles at airports.”

Abta chief executive Mark Tanzer welcomed help with household incomes but criticised a decision to continue with inflationary increases to Air Passenger Duty (APD).

He said: “We agree with the chancellor’s focus on growth during today’s Budget – Abta research shows that, with the right framework, the outbound travel sector is expected to grow by 15% over coming years (compared with 2019 levels), outperforming the wider UK economy.

“There are also some very welcome measures that will benefit travel workers and businesses. For example, a big challenge for the travel industry’s recovery has been the ability to recruit and retain staff. The government’s announcements around childcare and helping people return to work should help both current staff and those who might wish to join the industry.

”However, it is disappointing to see the government pressing ahead with inflationary increases in APD, as announced in the Autumn Statement. Not only is this bad news for travellers, as they have to bear the cost of this rise through their air ticket, but also UK competitiveness.

“The UK already has amongst the highest APD in the world and increasing this further contradicts with the message that we want to grow the economy.”

UKinbound chief executive Joss Croft also welcomed the Chancellor’s provisions to help with childcare costs and to get the economically inactive back to work, saying these “should go some way to addressing the significant recruitment challenges inbound tourism continues to face”.

But he argued: “The Chancellor missed key opportunities to boost the recovery of the inbound tourism industry, such as the failure to re-introduce VAT-free shopping for international visitors alongside maintaining sky-high levels of air passenger duty.”

Croft said: “We need urgent action from the government to help inbound tourism continue to recover from the pandemic.

“We urge the government to review the competitiveness of the UK as a visitor market, from taxation [and] visas to international marketing, and come back with a package of measures that will allow tourism to play its vital role in our economy.”

Helen Dickinson, chief executive of the British Retail Consortium, also welcomed “measures to support households with the cost of living”, including the cap on energy bills and support with childcare costs.

However, she said: “Many businesses are weighed down by higher costs right through the supply chain.

“Government must do more to limit one of the biggest drags to retail investment, [the] regulatory burdens heading down the track, or risk a crash in business investment and further inflationary pressures.”

Dickinson added: “The Chancellor understands the need to train people to re-enter the workforce, yet he missed a key opportunity to fix the issues with the Apprenticeship Levy system that would support this goal.

“Over the last three years, businesses have lost £3.5 billion in unused levy funds. To break this cycle of wasted investment, it is vital the Government allows businesses to use their levy funds for a wider array of skills courses.”

She also argued: “The broken business rates system remains a drag on business investment, jobs and economic growth. Rates must be paid in full whether firms are making a profit or a loss.”

Dickinson said business rates were “the final nail in the coffin for many struggling stores” and urged the Chancellor to “make good on the Conservative 2019 pledge to reform rates”.

American Express Global Business Travel (Amex GBT) president Drew Crawley added his voice to the call for more government support for sustainable aviation fuel, saying: “The government has missed an opportunity to lead the decarbonisation of air travel.

“The new £20 billion clean energy package fails to provide vital support to drive production and uptake of SAF.”

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