CEO, BTA (Business Travel Association)
As the UK leaves the EU in 2020, developing trade links has never been more important –business travel is an integral part of making those needs a reality.
2020 is a critical year for the UK, and business travel will play a vital role. In the last few days, the UK has officially left the European Union and now more than ever, the need for us to strike frictionless trade agreements with other nations is of critical importance.
As our largest trading partner, the EU is chief among these, but the need to trade effectively with markets across the globe is also essential to the UK’s future prosperity.
Business travel can oil the wheels of trade
Business travel is a vital part of building and sustaining trade links across the globe. It enables that crucial face-to-face contact from which trade deals can be struck.
While the need for travel should always be considered responsibly, there is rarely an equally effective alternative to face-to-face meetings.
This makes business travel a significant contributor to the health of UK public listed companies (PLCs), and so, ensuring it remains frictionless is vital.
Business travel is a vital part of building and sustaining trade links across the globe because it enables that crucial face-to-face contact from which trade deals can be struck.
UK Government must support external investment in business travel
This means that the UK Government must prioritise its investment, and create the right conditions for external investment, in the UK’s transport infrastructure.
This will enable the BTA’s members to drive a growth in business travel that supports our desire to grow as a trading nation.
At the top of the priority list is more runway capacity for the space-constrained South East, and faster and more frequent train services between our major cities.
The South East needs improved travel services
The UK’s two largest airports – Heathrow and Gatwick – account for 120 million passengers annually. Both have a lack of capacity, which is seriously limiting the launch of new air routes to emerging markets, and additional flights to existing destinations. The construction of new runway capacity is both far from certain and several years away.
These challenges are not limited to the skies. The vitally important HS2 train line is a crucial link between the South East and the burgeoning Northern Powerhouse. Efficient connectivity between these two economically vital parts of the UK is of crucial importance and yet the mood music from the new Government about HS2 is far from positive.
The UK’s high air travel taxes could be hindering our global connectivity
In addition to investing in infrastructure that makes business travel frictionless, considering the necessity of taxes on travel is also of great importance.
As an island nation, the UK is heavily dependent upon aviation to maintain its global connectivity. Rather than embracing this, the Air Passenger Duty (APD) the UK imposes is the highest air passenger tax in Europe – damaging economic growth and jobs.
Reports have highlighted that the financial cost burden to UK exports are far greater than the £3.4bn raised annually in APD.
To ensure it doesn’t hamper our efforts to trade effectively overseas, APD should be reduced by at least 50% and travel in premium economy – a popular option for many business travellers – should not be taxed in the same band as first and business class travel.
Additionally, the revenue from the tax shouldn’t just be collected in a central Government ‘pot’, but instead put to better use by being invested in environmental measures such as the development of aviation biofuels.
Finally, it’s worth remembering that, in addition to being crucial to developing trade, business travel is a major industry in itself. The BTA’s members between them make over 32 million transactions each year, supporting more than 12,000 jobs and driving annual revenue of more than £10 billion.
So, as we focus our 2020 vision on trade, let’s remember the vital role that business travel plays in making that possible.