What is going to happen in the general election, and how will the outcome affect the travel industry?

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It is unusual to be only two months away from a General Election without having any really clear view as to who is likely to be in government afterwards. Whilst this is a source of great interest and speculation for those involved in politics; for the rest of us, there is a simply a swathe of uncertainty – with no clear view as to what policies will be adopted or by whom once the election has taken place.

 

We have known for almost 5 years that the general election will be taking place on 7th May 2015, as this was one of the principles agreed by the coalition partners following the 2010 election. In the intervening 5 years, the popularity of the parties has fluctuated, wildly at times, and in this election, more than on almost any previous occasion, a large number of outcomes are very uncertain.

 

All the main political parties face challenges, from almost every side.

 

The Liberal Democrats have often been the reserve choice for many voters – if you were a Labour supporter living in a staunchly Conservative area, you would often vote Lib Dem as a protest vote, and Conservative supporters in Labour areas did the same. It is questionable whether that will happen in 2015. Many people who might have voted for them in the past now look at their performance in the Coalition, and don’t like what they have seen.

 

Both Conservative and Labour have been affected by the rise of UKIP. Whilst many of their policies seem designed to attract those for whom Genghis Khan was a woolly libertarian, and for whom the Conservatives have been the party of choice, those same policies often appeal to significant numbers of working class Labour voters. Whether UKIP end up winning many, if any, seats in the general election remains to be seen, but they will certainly disrupt the voting patterns of both the major parties.

 

At the same time, the Green Party are sitting at the left hand of the Labour party, with many policies which seem to appeal to the younger end of the traditional Labour support. Again, it is questionable whether they will end up picking up more than a very small handful of seats, but they could gain sufficient votes to affect the outcome of some seats.

 

Probably the biggest single factor which will affect the outcome of the General Election is the Scottish vote. Even though the referendum was won by the No campaign, the SNP appear far stronger than they have ever looked previously, to a point where some pollsters even suggest that they make take most, if not all of the 59 Parliamentary seats in Scotland – compared to 6 seats in the current Parliament. That would give them a massive influence in the 2015 UK Parliament, which is ironic, since they campaigned for some years not be part of that Parliament at all!

 

All of this adds up to a tremendous lack of certainty about who will form the next government, with big differences in the polls, but a strong likelihood of a hung Parliament, and another coalition being formed – without any clarity as to who will be the coalition partners.

 

So what does all that mean for those of us in travel and tourism, whether outbound, inbound or domestic?

 

ABTA has launched its “general election hub” containing its manifesto and campaigning messages for the election – that probably undersells what is a tremendous piece of work to pull together the campaigning messages for our industry. Their manifesto was actually launched in July 2014, but their key priority areas for the new government make eminent sense, and are ones with which I would wholeheartedly agree. I paraphrase them below:

  • Get off the fence and make a decision about airport capacity
  • Recognise that the transport infrastructure in the UK doesn’t work, and put some serious investment into it.
  • Sort out Air Passenger Duty – all the campaigners on this would ideally like to see it abolished – which is an ambitious outcome – that’s a nice way of saying that it probably won’t happen any time soon!
  • Actually have a coherent approach to tourism policy.
  • Sort out consumer protection, and have a sensible and proportionate system.

 

Can we expect any incoming government to implement all or any of these – particularly if we end up with a coalition? Whilst in the run up to the election, we will probably get all the parties saying that they recognise the sense in many of those proposals, when it comes to the crunch, we shouldn’t hold our collective breaths expecting these policies to be implemented quickly, if at all.

 

So what about those 5 key asks?

 

Airport Capacity will continue to be a political hot potato. Whilst all logic and operational common sense would suggest either an expansion of Heathrow or a completely new airport being built, political expedience will almost certainly result in neither of those solutions being adopted – and another 5 years of talk rather than positive action. I hope I am wrong, and I will continue to believe that more capacity is an absolute essential, but I wouldn’t place any bets on the right answer being adopted.

 

Transport infrastructure again is a tricky one – and causes a clash between differing political interests. In my home area around Greater Manchester, work has started this week on a road which was originally planned in 1967, and which has had numerous reviews, approvals, budget cases etc. it may open on or around the fiftieth anniversary of the original plan being published – and that is not unusual. In the meantime, the population continues to grow, congestion gets worse, and more houses end up being built with few, if any new transport links.

 

I worry about Air Passenger Duty. Devolution to Scotland is already inevitable, and further devolution seems possible, and if the SNP hold the balance of power, becomes likely. The risk is that we end up with an even more complex picture, and counter-intuitive travel decisions being made simply to suit a tax regime. Full rate APD could ultimately end up being a congestion tax on Heathrow and Gatwick airports. I also suspect that the possibility of additional environmental taxation has not really gone away, so my fear is that we end up with an even worse position than we have at the moment.

 

Interestingly, tourism policy actually got a mention of sorts in the 2010 Coalition agreement – We will take steps to improve the competitiveness of the UK tourism industry, recognising the important part it plays in our national economy. 5 years on, I struggle to think of any ways in which those steps have been taken.

 

Consumer protection remains the final topic, and in some ways, this is a non party political issue. Much of the outcome on this will be driven from Brussels, and certainly I, for one, am not hopeful that we will end up with either a coherent or a proportionate outcome to the Package Travel Directive or Regulation 261 reforms.

 

All of this brings me to a couple of slightly depressing conclusions. Whilst we don’t have a clue what the next government is going to look like, whoever takes the reins of office is unlikely to have the tourism agenda at the forefront of their policy priorities, and we will be lucky to see any positive steps in any of our main areas of concern. I hope that I am wrong, but in any event, we have to keep the pressure up on politicians to have any hope of achieving any positive outcomes.