Government plans for Brexit could see the price of European holidays rise by almost a third, put thousands of British jobs at risk, reduce training opportunities for young people as well as result in a possibly irreversible loss of competitiveness for British travel businesses, argues Charles Owen. Progress hosted an event on this issue at Labour party annual conference
British outbound travel is a significant part of the United Kingdom economy which is often overlooked. According to the government, there were 72.8 million outbound trips from the UK in 2015.
Expenditure in the UK by residents engaged in outbound travel contributes £34.3bn a year to the economy, with a direct contribution of £2.4bn to the Exchequer. British jobs provided by the outbound travel industry exceed those in notable manufacturing industries such as food and electrical equipment.
The European Union is the main destination, with 75 per cent of the 53 million leisure and business trips to a European country. Changes in our relationship with the EU will have significant effects on the outbound travel industry.
A no-deal or ‘cliff edge’ departure from the EU will have disastrous consequences for the outbound travel industry. A poorly negotiated Brexit that fails to take into account the importance of the seamless transition of staff, resources and finances for the outbound travel industry will certainly mean a loss of jobs, of competitiveness of UK travel companies and an increase in holiday prices, estimated to be around 30 per cent, for the travelling public.
More specifically, if the next stage of negotiations fails to take account of it, there will be changes to employment and secondment rules which will substantially increase the cost to British travel companies of employing UK nationals in Europe, possibly rendering it effectively unworkable. This will put at risk the estimated 25,000 jobs working in the EU supporting the seasonal holiday industry, the £16.5bn the industry contributes to the economy and the £1bn contribution it makes to the Exchequer.
The loss of jobs amongst those seconded to work in the EU will be predominantly amongst young people in the UK. The companies most likely to cease trading are the small and medium sized companies which are the mainstay of UK travel businesses. The door will be left wide open to the European based multi-nationals dominating the package travel market, changing the holiday experiences and choices of millions of Britons.
Brexit has already had an effect on British travel companies; SBIT’s survey revealed travel companies have already cut the capacity of their holiday programmes and two-thirds of the companies surveyed have altered their accommodation contracts and risk losing further market share and competitiveness.
Over 130 companies representing £470 million in turnover took part in the survey and they report a seven per cent reduction in British staff posted overseas this season already with more cuts to come.
Charles Owen is managing director of European Pubs. The findings in this article come from a survey conducted by SBIT (Seasonal Businesses in Travel) an organisation representing over 200 outbound British travel companies.
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