THE cost of a family holiday will rise by hundreds of pounds if Britain leaves the European Union, the Treasury warns today, saying the increase could happen as early as this summer if the UK votes for Brexit on June 23.
The latest of a string of warnings emanating from Whitehall comes in the form of new analysis, which is based upon an Out vote causing sterling to fall by 12 per cent over the next two years. This, says the Treasury, would push up the cost of accommodation, food and drink.
It would mean a four-person eight-night holiday to Europe would increase by £230 while a 14-night stay for four people to America would increase by £620.
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The analysis also says a devaluation in the pound could put at risk:
*low-cost flights;
*reduced mobile phone-roaming charges;
*free Europewide healthcare and
*booze cruises enjoyed by thousands of day trippers every year as new customs controls would limit duty free drink.
“All the evidence points to the value of the pound falling after a vote to leave the EU. A weaker pound means people’s hard-earned savings won’t go as far on holidays overseas,” said David Cameron.
“The choice facing the British people on June 23 is increasingly clear: the certainty and economic security of remaining in the EU or a leap in the dark that would raise prices, including the cost of a family holiday,” added the Prime Minister.
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The Treasury also points out that as well as the immediate effects of a weaker pound on the real-world cost of goods and services for those travelling abroad, should Britain vote to leave, there could also be a impacts on other arrangements that have benefitted British holidaymakers.
Cheap flights within the EU might also be jeopardised if the UK left the EU’s single market, said the analysis.
It pointed out that low-cost air fares fell by more than 40 per cent between 1992 and 2000, following the introduction of a single market for aviation, which allowed any EU airline to operate routes from and between any EU airport. But the Treasury pointed out that, outwith the single market, the UK would lose this benefit, which had increased competition and driven down costs for passengers.
Carolyn McCall, Chief Executive of easyJet said: “For easyJet and our passengers membership of the EU has been a good thing. The common aviation area created by the EU allows any European airline to fly anywhere in Europe. This has kept all airlines' costs low and has enabled low fares airlines like easyJet to expand.”
She said if the UK were to vote to leave the EU, then any new, more restrictive aviation arrangements would add cost and push up fares.
“A weaker pound would mean the cost of a holiday abroad, including food, accommodation and drinks, would be more expensive. That is why we think our customers are better off in Europe,” added Ms McCall.
The Treasury also points out how from June 2017 all roaming charges across the EU will be completely abolished as part of the single market in telecoms but these arrangements, which benefit millions of British travellers every year, would not be guaranteed to continue were the UK to leave the EU.
Vittorio Colao, chief executive of the Vodafone Group, said: “The end of roaming charges, which was driven by the EU, and Europe-wide offers from operators like Vodafone – the European leader in 4G – mean that everyone can use their mobiles anywhere in Europe without having to worry about excessive costs.
“Britain will benefit from being part of a borderless European single digital market as it will create new opportunities for economic growth. Consequently, we believe it is better to be a shaper and leader from within, rather than being just a commercial neighbour.”
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