Memorandum submitted by the Association
of British Travel Agents Ltd
ABOUT ABTA
ABTA was founded in 1950 and currently has 1,600
members with 6,300 outlets. Members include travel agents, tour
operators and support services right across the spectrum from
small family-owned businesses to the "Big Four" tour
operators.
ABTA is the largest travel trade association
in the UK and its members provide 90% of the foreign package holidays
in the UK as well as selling millions of independent travel arrangements.
As part of its comprehensive package of services
to members, ABTA, as a non-party political organisation, also
provides an effective voice to represent the interests of its
members and consumers to government and key opinion formers at
the highest levels.
In Europe, ABTA is forming close ties with members
of the European Parliament, the European Commission and staff
within the Director Generals' Secretariats. ABTA works in partnership
with ECTAA (the European Grouping of National Travel Agents and
Tour Operators) to lobby on interests relevant to its members.
PBR
ABTA is extremely disappointed that the travel
and tourism industry's attempts to offset its environmental footprint
have been severely undermined by Government actions.
The increase in Air Passenger Duty (APD), announced
by the Chancellor in his Pre-Budget Report, has absolutely nothing
to do with mitigating the environmental impact of air travel and
everything to do with raising revenue for the Treasury's latest
pet projects.
Government claims that it has been listening
to business and that it champions the small business entrepreneur
seem not to be true in this instance; it appears that it is suffering
from a severe case of deafness over the implementation of APD
from 1 February 2007.
Already over four million package travel holiday
bookings have been made for flights to be taken on or after 1
February. These will incur real additional costs that will have
to be paid to the Government. In some cases the Package Travel
Regulations will mean that the customer will not be required to
pay the additional levy, and this will fall to the tour operator;
other passengers, who have flight only or non-package holidays,
may well be asked to pay the additional costs before they fly.
For a family of four travelling to the USA this will mean an additional
£160 on top of the original cost of their holiday.
When we put to the Treasury the iniquity of
this retrospective tax, a tax that the Treasury estimates will
raise £1 billion, they confirmed that they were well aware
of the impact on holidaymakers and business. The Chancellor himself
in December, in front of the House of Commons Treasury Select
Committee, confirmed similarly that he was aware of the impact
of this tax. There was no consultation with the industry before
the announcement, and subsequent discussions with Government have
proved less than productive.
It is estimated that the package travel industry
is set to lose over £44 million due to this increase and
it is not just the larger companies. Many ABTA members are small
family businesses—local high street travel agents, the sort
of businesses the Government has pledged to support. Many of these
will see their 2-3% profit margins wiped-out and will struggle
to survive.
We are not against the principle of APD, but
rather against the way in which it is being implemented. In fact,
we have been working closely with Government on ways in which
the industry can reduce its environmental footprint, including
carbon offsetting schemes and more recently, with DEFRA, a benchmark
approach to offsetting. These efforts have been undermined by
the PBR announcement.
We have called on the Government to review its
announcement to bring in this retrospective tax from 1 February
in the knowledge that its impact on the travel industry will be
devastating. It also has the effect of derailing our industry's
pro-active measures to monitor and ultimately reduce its carbon
emissions.
January 2007
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