Speech

A thriving travel industry indicates a thriving economy

The travel industry shares credit for the economic progress we have seen since 2010.

Robert Goodwill MP

Thank you for the introduction.

I should admit that when, just before the election, I accepted the invitation to speak today (24 June 2015), I did so knowing there was a tiny risk that I might be in another role, or indeed not in a role at all, by the time the conference came around.

So today I am grateful that the collective wisdom of both the British electorate and the Prime Minister has prevailed.

It’s good to be back.

One of the special things about being a transport minister is how often you get to use the services for which you are ultimately responsible.

That was something I had chance to reflect on during the election campaign, as I travelled the length and breadth of the country.

Our national transport networks have a great history.

Our forebears pioneered the great ocean liners, invented the modern railway and opened some of the first passenger airports.

But in recent years, that history has become a little too apparent.

The truth is that successive governments of both political complexions have failed to invest the sums necessary in transport.

Too many tough decisions have been delayed or deferred for financial or political reasons, including the decision about building a new runway in the south east of England.

Yet we are making twice as many journeys as we did since the 1970.

This growth in travel is good news for the travel industry and the country as a whole.

Two weeks ago, I was delighted to see the Office for National Statistics announce that over the last year, visits to the UK by overseas residents rose by 4% to nearly 35 million, helped no doubt by the success of the Olympics and the fertility of our Royal Family.

And UK residents made over 60 million visits abroad, a 5% increase on the previous year.

Yet if we fail to invest in our transport networks now, that growth could stall.

Parts of our transport networks are already full.

We cannot afford to dither any longer.

So our manifesto made investment in infrastructure our second priority, in support of our long term economic plan.

We made a promise to invest £100 billion in infrastructure over this parliament.

Which will include £70 billion for transport infrastructure.

We will make the biggest investment in rail since the Victorian times.

The most extensive improvements to roads since the 1970s, trebling investment in major road schemes by 2021.

And we await the Airports Commission report with anticipation.

We know that Heathrow is operating to its capacity today, and that Gatwick is forecast to be full in the 2020s – indeed at peak times Gatwick is already operating at capacity.

Even Stansted is forecast to be full by the early 2030s.

So when the Commission announces its recommendation we will consider it carefully and take the decision that has been put off for too long.

Tourism

Of course, transport investment is only one factor that contributes to a thriving travel industry.

The compelling ABTA Driving Growth report, published today, makes the point that, and I quote:

Growth in outbound travel is closely linked to disposable income in UK households, reflecting the sensitivity of the travel industry to economic downturns.

As the report makes clear, 2008 and 2009 was a challenging time for the travel industry, just as it was for the country as a whole.

5 years ago we inherited an economy that was extremely fragile.

Millions of jobs had been lost during the recession.

The budget deficit stood at more than 10% of GDP; the highest in our peacetime history.

Disposable income was in short supply.

But today, things have turned around.

As a proportion of GDP, the deficit has been halved.

The British economy is strong, and growing at the fastest rate of any economy in the G7.

We have the highest employment rate on record.

But let me be clear.

The government won’t claim all the credit for the turnaround.

It’s a private sector success story in which the travel industry has played a central role.

The Driving Growth report says that outbound travel directly contributes nearly £12 billion to the economy every year, with an overall economic contribution of over £28 billion a year.

And supporting well over 400,000 jobs.

I am glad that the report anticipates an increase in consumer disposable income over the next 5 years, and that as a result the industry is poised for a prolonged period of growth.

For me, the lesson is this: a thriving travel industry indicates a thriving economy.

As a general rule, what’s good for one, is good for the other.

That means the government needs to maintain its policies in a way that supports the growth of the travel industry.

Consumer confidence

There is no clearer example of that than in the area of consumer confidence.

Ultimately, all enterprise relies on confidence.

That’s true for the British economy, and it’s true for the travel industry.

It’s why ABTA created the first consumer protection scheme in the 1960s, and why the DfT has been working closely with the business department on the negotiations for the Package Travel Directive.

We welcome the new directive, which was agreed at Competitiveness Council of Ministers on 28 May.

The current regulation in this sector pre-dates the digital age, and the new regime will be a significant improvement.

It also represents a balanced response to the need to increase consumer confidence while facilitating a single market in leisure travel.

Most importantly, it now gives us a clearer picture on the scope of options for ATOL reform.

We expect the Directive to be published in the autumn, and implemented across member states by late 2017 or early 2018.

That sets the time in which we will need to introduce a future insolvency protection regime.

We therefore plan to launch a public consultation on ATOL reform options by the end of the year.

And we will certainly need your help in deciding the future scheme.

Closing remarks

So, in conclusion.

2015 happens to be the 65th anniversary of the very first Mediterranean package holiday.

3 weeks ago, The Independent newspaper marked the milestone by running a report on that founding trip.

In 1950, 11 intrepid pioneers travelled to Gatwick to board a propeller-driven, war-surplus Dakota transport plane.

Enticed by the prospect of sunshine, wine for 9 pence a bottle and “meat-filled meals”, they handed over £32 and made a 6 hour flight to Corsica.

Their accommodation was a cluster of tents left behind by the US Army.

The Independent didn’t record how our travellers enjoyed their holiday, but with wine at 9 pence a bottle, how could they not?

In all seriousness, I would like to conclude by saying: thank you.

Thank you for the innovation, the enterprise and the commitment to customers that the travel industry is famous for.

We’ve seen it over the last 5 years as well as the last 65.

You can take a big share of the credit for the dramatic economic progress we’ve seen since 2010.

And over the coming days, weeks and years, there is much that we will need to work on together.

We will be grateful for your support.

Thank you.

Published 24 June 2015