Budget 2025: Travel bosses warn holidays will become ‘too costly’ for some if taxes are raised
British holidaymakers face the prospect of more expensive holidays if Rachel Reeves pushes ahead with tax increases in next month’s budget, according to Britain’s two biggest tour operators.
Neil Swanson, Tui’s UK managing director, warned that “if the Chancellor does this, holidays will become too costly for some people.”
Meanwhile, Jet2 chief executive Steve Heapy expressed fears that the Budget would increase taxes by £50bn a year and “devastate Middle England”.
Ms Reeves said she was exploring potential tax rises and spending cuts for the 26 November Budget, aiming to close an estimated £50bn fiscal deficit.
Last October’s inaugural Budget saw an additional £40 billion in annual taxes announced.
Mr Swanson warned travel companies would be forced to increase holiday prices if taxes on businesses were increased further.
He said: “We will not be able to afford the extra costs incurred there and will need to transfer some or all of them depending on what actually happens.
“This will cause some people to exit the market.
“You want travel to be for everyone, not just for people with more money.
“We need the Government to help us deliver some of the growth the economy needs.”
He said: “If you put too much in our way, then it’s going to be really hard to achieve.”
Mr Heapy said taxes were “even higher than when the Conservatives were in power” and his company had suffered a loss of £25 million due to increased employer national insurance contributions and the higher national minimum wage announced in the last Budget.
“The mood seems to be that the tax will go up again,” he said.
“I don’t think it’s sustainable.”
Asked whether tax increases would lead to a rise in holiday prices, Mr Heapy said: “Probably yes, because if the Budget is perceived to be not large then (the UK’s) currency could fall and if the currency falls then 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” because he did not believe it was possible to “tax an economically difficult situation”.
He added: “They keep talking about the growth agenda, let’s see.
“So far I haven’t seen much that I think will lead to significant growth in the economy, but I remain hopeful.
“I hope the budget will be a real growth agenda budget.”
The Treasury was contacted to get an opinion on the issue.
