UK's Air Passenger Duty a threat to Caribbean tourism

Sunday, November 08, 2009 2:29 AM

Editorials

Tuesday, June 30, 2009

Caribbean governments, we believe, have just cause to be angry at Britain's decision to reform that country's Air Passenger Duty (APD) into four bands and increase the tax based on mileage from London to the capital cities of the countries where the fights land.

The APD - an excise duty charged on the carriage, from a UK airport, of chargeable passengers on chargeable aircraft - will be increased by at least 10 per cent this November and will, we are told, double in some cases by 2010.

According to Britain's finance minister, Mr Alistair Darling, the APD will be based on four bands set at intervals of 2,000 miles from London.

Minister Darling is reported by wire services as saying that a second increase in the APD will become effective in December 2010, requiring a non-standard class passenger flying more than 6,000 miles to pay £170 up from the current £80.

According to Minister Darling, the four-band system will ensure that people who travel further and have a larger environmental impact meet that cost.
"This will be effective in reducing emissions from aviation," he said.

Caribbean governments, however, see a flaw in Mr Darling's formula. Because, starting in November, it will cost more to fly from London to this region than, say, to Seattle on the United States west coast, even though the distance between London and many capitals in the Caribbean is shorter than between London and Seattle.

The reason being that under Mr Darling's formula, Washington D C, the US capital, is the city being used to calculate the tax.

Last Friday, Jamaica's tourism minister, Mr Ed Bartlett, arguing in this newspaper that the revised APD system is inherently unfair and not the least bit green, asked a very relevant question: "Why should Caribbean countries with relatively low emissions suffer the effects of an environmental tax in favour of the world's biggest polluter?"

It's a question that Downing Street needs to answer, for based on the increased costs that will be incurred by airline passengers starting in November, there is a strong likelihood that visitor traffic to the Caribbean from England will decrease significantly.

Data provided by the Caribbean Tourism Organisation (CTO) shows that travellers from the UK to the Caribbean last year totalled 1.24 million, spending an estimated £1.45 billion.

Antigua, Barbados, the Dominican Republic and Jamaica, the CTO said, were the top four islands where most money was spent by visitors from the UK.

That the effects of the global economic crisis on the Caribbean have elevated the importance of tourism to this region is no secret. Therefore, all legitimate efforts to secure foreign exchange inflows have our full support and should, we suggest, be embraced by the peoples of the region.

As such, we echo the call of Mr Wayne Cummings, the president of the Jamaica Hotel and Tourist Association, for either a reversal of Minister Darling's formula or, at the very least, a fair distribution of the duty. For, as Mr Cummings has argued, if carbon emissions are the real target, then the true distance of each destination from London should figure in the calculation.

If you were to grade Derick Latibeaudiere's performance over his 13 years as Bank of Jamaica governor, what grade would he get?
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