“A Budget to stimulate the economy!” declared the chancellor.
So, how stimulated do you feel after recovering from the shocking announcement about the projected unprecedented levels of government borrowing?
More to the point, how will the budget affect the travel industry? Will the reported decline in 2009 bookings be buoyed by a late summer boost in sales? Will the chancellor’s measures ‘stimulate’ seasoned travellers to fund their annual cruises, luxury holidays or winter ski trips?
Well, it’s a mixed bag as far as that’s concerned. The business community can take a little comfort from the extension of the three-year loss carry-back rule, which allows businesses to claim back their tax.
Higher paid individuals will be worse off next year and the year after as a result of the proposals to scrap personal allowances for those earning more than £100,000a year, the new 50% income tax rate for those earning more than £150,000 and the phasing out of higher rate tax relief on pension scheme contributions for individuals on salaries of £150,000-£180,000.
Some commentators have already compared chancellor Darling to chancellor Healey, whose ambition back in the 1970s was to “squeeze the rich until the pips squeak”.
While this may be overstating the position somewhat, the prospect of higher taxes and continuing low interest rates on savings will probably promptseasoned travellers to reconsider their position, tighten their belts and reduce their spending on leisure products and services.
Business psychologists are convinced that a positive attitude can lead the country out of recession. Perhaps, therefore, we must all look a little harder for those green shoots of recovery the politicians keep referring to. There is little doubt that the key to an upturn, particularly for the travel industry, lies in consumer confidence and the willingness to believe that recovery is on the way.
Banks also have a part to play, bolstering the confidence of consumers and the City boys with a more positive and proactive attitude towards lending to businesses and individuals alike.
“There is little doubt that the key to an upturn, particularly for the travel industry, lies in consumer confidence”
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