Government needs to act to safeguard the travel industry over Brexit, writes Mark Tanzer
Brexit has been a big focus of ABTA’s work over the past three years, and mine in particular. We’ve spent a lot of time meeting with ministers and officials in the UK government, the EU and destination countries talking about the value of outbound travel, and highlighting the main priorities for the industry in the negotiations.
The response we’ve had has been encouraging: a recognition of the important contribution UK travel makes to EU economies – which ABTA research demonstrates is worth more than €37 billion a year and supports more than 870,000 jobs – and a clear desire to maintain the conditions that enabled the industry to flourish.
Many of the main policy priorities that ABTA has been highlighting as essential to preserve a successful tourism industry – such as maintaining access to aviation markets, ensuring visa-free travel and keeping the EHIC system – are featured in the UK government’s Brexit white paper, which was published in July.
What is less clear are the future rules around employment within the EU, including posted workers and VAT arrangements. The government’s white paper outlines an ambition to agree flexible employment arrangements, on a reciprocal basis, for identified sectors but there is no detail as to which sectors this refers, and no direct reference to posted workers either.
There is also no detail on VAT for services, which we know is a very important issue for many UK travel businesses using the Tour Operators Margins Scheme (TOMS). Following the publication of the white paper, I wrote to chancellor Phillip Hammond to raise this issue with him and to ask for clarity on the government’s plans.
It is hoped that the exit agreement between the UK and the EU will be finalised at the European Council meeting on October 18-19. However, there is still a lot to cover within the negotiations before a deal, and time is tight. As negotiations progress – and intensify – there are three things we need to bear in mind:
1. The white paper gives a better understanding of what the government is seeking, but we are still lacking detail on many important areas.
2. The white paper only represents the views of how the UK government wants the future relationship to work. The EU and member states will have their own ideas.
3. A no-deal scenario is a possibility. The European Commission has issued advice to member states on contingency planning, and the UK government is publishing its own ‘technical notices’ on what a no-deal means for businesses and how the government might react in such a scenario.
As the process moves forward, ABTA will continue to engage proactively, and to call for a pragmatic approach to the negotiations from both sides – seeking a deal that prioritises the needs of the travel industry and travelling public. ABTA is also carrying out contingency planning work, to help Members and customers be prepared, as far as possible, for a “no-deal” exit.
Mark Tanzer, chief executive, ABTA