A vote to leave the EU would leave travellers in an uncertain position
What would Brexit mean for business travellers? Frankly, it is difficult to say
By B.R.
TWO recent opinion polls have put the Leave side ahead in Britain’s upcoming referendum on European Union membership. If the country does decide on a Brexit on 23rd June, what would that mean for business travellers?
Frankly, it is difficult to say. We know what travel looks like as part of the EU, but not what deals would be in place were Britain to leave. Such details would be thrashed out in negotiations over the coming years. EU laws, for example, enshrine certain rights for air passengers, such as compensation for delays. New national legislation would be needed to replace it. Because no one knows who would form the government were Britain to secede from the EU, no one is in a position to say what form, if any, such laws would take. Similar issues surround subjects ranging from free health cover for travellers, the ease of passage for Brits travelling around the continent, and even the data-roaming fees that smartphone operators are allowed to charge.
That uncertainty extends to trade. Recent research by Oxford Economics suggests, unsurprisingly, that there is a strong link between business travel and commerce. Indeed, it found that a 1% increase in the number of business travellers correlates to a 0.05% increase in exports. As most economists agree that the economy would suffer as a result of Brexit, it is also reasonable to assume that demand for business travel would fall too. The optimists on the Brexit side would counter that were Britain to be released from the shackles of EU bureaucracy it would suddenly find itself free to sign trade deals with other countries, such as China. That might, therefore, increase demand for long-haul business travel. But the view in this parish is that any such negotiations would be both tortuous and, without the heft of the EU behind them, lopsided.
(As an aside, if Brexiteers’ rose-tinted predictions did prove correct it would also strengthen the case for a third runway at Heathrow to cater for all those new flights to emerging markets that would be needed. Which is ironic, as the airport’s chief executive recently pointed out to Gulliver, given that Boris Johnson, the de facto leader of the Leave campaign, is also vehemently opposed to Heathrow expansion.)
One thing that does seem certain is that foreign travel would become more expensive in the medium term. For one thing, an open-skies relationship with the rest of the EU, as well as other countries, notably America, may well have to be renegotiated and ratified. Any delay would probably raise prices for consumers. For another, Brexit would almost certainly cause the pound to tumble, immediately pushing up the cost of foreign travel. Some 64% of international plane journeys from Britain are to the EU, accounting for 56% of the country’s outbound spending, according to the Office of National Statistics.
Of course a fall in the pound should, in turn, mean a boost for inbound and domestic tourism. But that happy occurrence might be offset by rising costs elsewhere. The travel industry in Britain relies, to a fair extent, on foreign labour. According to a report by the Association of British Travel Agents, as many as 70% of jobs in the travel and tourism sector in London, for example, depend on migrants. Assuming that the Brexiteers’ rhetoric on curbing immigration is followed through with action, that could well mean that jobs prove difficult to fill, with wages going up and service down.
As with all things Brexit, all this is supposition and counterfactual claim. Still, on the balance of probability, a vote to leave the EU would make life for the road warrior a harder one.
