With parliament now on recess, and newly elected or re-elected MPs back in their constituencies – or perhaps even on a well-earned holiday themselves – now is a good moment to reflect on the first month of the new Labour government.
After 14 years in opposition, the prime minister has shown a clear desire to hit the ground running; the government outlined a bumper package of 40 bills in the King’s Speech on 17 July, which included several announcements of relevance for our sector.
Fuel for the future
We have seen a couple of notable moves on Sustainable Aviation Fuels (SAF). Firstly, the Sustainable Aviation Fuels (Price Support Mechanism) Bill was included in the King’s Speech.
As an industry, we have been clear there is an urgent need to ensure we have sufficient domestic production and supply of SAF to support our aviation sector. This bill will be essential in securing the private sector investment that will be needed to grow the UK’s SAF industry, so is very much welcome.
It has also been confirmed the UK SAF mandate, which obliges airlines flying from the UK to use a minimum percentage of SAF in their fuel mix, will commence from January 2025, starting at 2% and rising to 10% by 2030.
We all know the biggest challenge facing our industry over the next five years, but also out to 2050, will be climate change and the transition to net zero. We also know parts of our sector – aviation and cruise – are hard to decarbonise, and that industry alone cannot achieve the goal.
We need government to work in partnership with business to determine the policy, taxation and incentives frameworks required, and it is encouraging we’ve already seen clear commitments from the new transport secretary, Louise Haigh, demonstrating this is a priority for the new government too.
A fresh focus on skills
The King’s Speech also contained the Skills England Bill, which will create a new sector body for skills, as well carrying forward reforms to the Apprenticeship Levy. Meanwhile, ahead of the parliamentary break, a "pause and review" was announced to the current level 3 (Further Education) reforms in England.
The good news is that this is unlikely to significantly affect the fantastic work the travel and tourism industry has already undertaken, through the Tourism Industry Skills Working Group formed by Abta and industry partners in spring 2023, to ensure future courses are fit for purpose and better reflect the needs of industry employers.
However, we will need to stay close to future developments to shape what comes next and tailor it the needs of our members and the wider industry.
Maximising travel’s potential
Ministers have also spoken frequently about the importance of improving economic growth. We welcome this and Abta’s research shows that, with the right policy framework, our sector is well placed to help deliver the government’s growth mission – with the travel industry on course to outperform other economic sectors in the years ahead.
But, to truly maximise the industry’s potential, we really need to ensure we’re adopting policies that enhance the competitiveness of the sector. This is where we will be pushing specific priorities to government ministers over the weeks and months ahead, most notably reform of business rates and extending youth mobility deals to the EU.
And, while the focus on improving growth is welcome, it is impossible to ignore the stark warning given by chancellor Rachel Reeves just before the summer break got under way: there is a £22 billion hole that needs filling, and taxes will have to rise.
Our message ahead of the Budget on 30 October will be clear – the UK is already at or very near the bottom of international league tables for tax competitiveness concerning travel and tourism.
So if the government wants to attain growth, which the chancellor says is the number one mission, increasing taxes on our industry, or on our customers, would be counterproductive.
Travel’s priorities are being heard
Those are also messages we’ll be delivering directly to the ministers given responsibilities for our sector, most notably the new tourism minister, Sir Chris Bryant, and the new aviation and maritime minister, Mike Kane.
Looking at those appointments, the retention of tourism within the minister of state portfolio suggests a higher priority for the sector, which is positive. The new minister is also vastly experienced, and has already spoken passionately about his openness to hear the industry’s views and champion our needs.
Meanwhile, Mike Kane is a well-known face in travel, and very familiar with the industry’s needs. Those who attended Abta Travel Matters in summer 2023 will recall the then shadow minister thanking the sector for giving his constituents “the best two weeks of their year”. So again, it’s clear we have someone who values what you – travel businesses – do.
Abta looks forward to working with both ministers to ensure the continued success of the industry.
When we set out our manifesto in April, we outlined three key themes to support the industry’s success over the lifetime of this parliament – positioning the UK as a sustainable travel leader, creating fulfilling and rewarding careers in the sector, and improving the competitiveness of travel and tourism businesses.
Just over a month in, we’ve already seen action across many of the 14 policy areas we laid out.
Announcements are only the start of the process, so there’s certainly plenty of work ahead to do, and against a difficult fiscal backdrop, there are risks ahead too. But it’s clear many of the industry’s priorities have been heard.
Luke Petherbridge is Abta’s director of public affairs.
