British holidaymakers face the prospect of more expensive getaways should Rachel Reeves proceed with tax increases in next month’s Budget, according to the UK’s two largest tour operators.
Neil Swanson, Tui’s UK managing director, warned that “holidays will become too costly for some people if the Chancellor does this”.
Jet2 chief executive Steve Heapy, meanwhile, expressed fears about the Budget raising taxes by £50 billion annually and “screwing Middle England”.
Ms Reeves has indicated she is exploring potential tax rises and spending cuts for her 26 November Budget, aiming to address an estimated £50 billion fiscal deficit.
Her inaugural Budget last October saw the announcement of an additional £40 billion in annual taxes.
Mr Swanson warned that travel companies would be forced to raise holiday prices if taxes on businesses were increased further.
He said: “We won’t be able to absorb the extra costs that come along there, and we’ll need to pass some or all of that on, depending on what actually happens.
“That’s going to price some people out of the market.
“You want travel to be for everyone, not for just the people who’ve got the deeper pockets.
“We need the Government to help us drive some of that growth that the economy needs.”
He said: “If you put too much in our way, then that’s going to be really difficult to achieve.”
Mr Heapy said that taxes were “even higher than when the Conservatives were in power”, with his company suffering a £25 million hit from increased employer national insurance contributions and a higher national minimum wage announced at the last Budget.
“The mood music seems to be that tax will go up again,” he said.
“I don’t think it’s sustainable.”
Asked if tax rises would lead to an increase in holiday prices, Mr Heapy replied: “Probably, yes, because if the Budget is perceived as not being great, the (value of the UK’s) currency could reduce, and if the currency reduces, import costs will rise.”
Mr Heapy said his message to Ms Reeves would be “don’t continue to use Middle England as a cash cow” as he did not believe it was possible to “tax your way out of an economically tight spot”.
He added: “They keep talking about a growth agenda. Well, let’s see it.
“I haven’t seen much so far that I think will result in significant growth in the economy, but I remain hopeful.
“I hope the Budget is a true growth agenda Budget.”
The Treasury was approached for a comment.
