The Caribbean will have to continue to endure a reduction in visitor arrivals from the United Kingdom in the face of continued official resistance to the removal of the controversial Air Passenger Duty (APD) on airline tickets.
The official position of the British Government now appears to be that while it is not unsympathetic to the Caribbean’s position that the new tax of airline tickets for travellers to the region could significantly cut visitor arrivals, taxes like the APD have now assumed considerable importance in helping to address Britain’s budget shortfall. More than that the British government has already sent a clear signal that the APD to all destinations including the Caribbean is likely to be increased since it intends to raise almost £4 billion annually from the tax by 2016. Should passenger numbers continue to fall the tax could be raised even higher.
Regional commentators are regarding the decision to ignore the sustained lobbying by Caribbean governments and the regional private sector in the matter of the APD as a political slight by the British government which had previously agreed to consult on the matter. Indeed, the argument is already being advanced that by holding firm to its position on the APD, the British government is sending a message to the Caribbean that it is not interested in the region’s economic growth and the role of tourism therein.
Commenting on Britain’s recent announcement that APD rates for the Caribbean will remain unchanged – despite regional protests over the fact that those rates are higher than rates charged on tickets for passengers travelling to the USA – Caribbean Tourism Organization (CTO) Chairman Ricky Skerritt said some weeks ago that it was a slap in the face of the region. “It dismisses all of the research and information CTO has provided to the British government over the past three years, and it contradicts the message sent by the UK Chancellor, George Osborne MP, in March 2011 when he cited the discrepancy between the USA and Caribbean APD rates as one of the reasons for holding a consultation on reform of UK APD,” Skerritt said. Skerritt, who serves as Minister of Tourism in the government of St Kitts and Nevis, one of the tourism-dependent territories in the region said that the UK Government’s decision “totally ignores the negative effect that APD is having on our economies.”
The British Government, meanwhile, continues to mount its own stout defence of the APD through its diplomatic channels in the region. Just days ago the UK Ambassador to Barbados, Paul Brummel restated the message sent to the region earlier by the British government that while it understands the Caribbean’s concerns over the APD, the UK government is equally concerned that the country “is facing a serious budget deficit that means that the taxes that exist such as APD really have to be used to combat that deficit.” The APD on flights from the UK to the Caribbean is £75 in economy class and £150 in all other classes.
