Flying in the Face oF jobs and growth - British Chambers of Commerce

FigUre 7: vAlue oF tHe uK tourisM industry (%)
46%
(source: ABtA)
14%
21%
19%
An imbalance in trade in a
particular product or service is
not a bad thing in itself. Foreign
trade works by countries exporting
products (or services) they can
provide better, or more cheaply,
in return for imports that others
are better placed to make. it is a
matter of fact that this results in
people in both trading countries
being better off.
An analysis of whether a country is
doing well, or badly, on trade flows
must look at the overall balance of
trade. this is the difference between
overall export earnings and spends
on imports. the uK’s balance
of trade has worsened in recent
years, tending towards an ever
larger deficit in manufactures. this
is compensated (to an extent) by
more export earnings from services.
domestic (day visitors)
domestic (overnight)
inbound tourism
outbound tourism
experts list many reasons for this
overall deficit, both historical and
related to the structure of the
economy. tourism generally does
not feature on this list.
even if it were politically desirable
or possible to limit people’s ability
to holiday abroad, a pound “not
spent” on a foreign holiday, would
not necessarily translate into a
pound’s reduction in the uK trade
deficit. spending in the uK tourism
sector is more complex than this
(as described above). And even if
it were not, the higher ticket prices
caused by capping flights would see
less overseas visitors coming to the
uK, whilst uK holidaymakers, who
might otherwise have flown abroad,
may spend disposable income in
other leisure related ways. Many of
these would involve imports.
29
chaPter 1:
How does AviAtion HelP Business
creAte joBs And growtH?