The British Government’s decision against implementing a further hike in the air passenger duty (APD) this year seems very much a case of delaying the agony for affected tourism destinations in the Caribbean but hardly a serious response to help alleviate the burden resulting from this taxation device by the United Kingdom.
In an immediate response to the British Chancellor’s announcement in his budget presentation last week of putting on hold the earlier projected further increase in the APD for 2010, chairman of the Barbados-based Caribbean Tourism Organisation (CTO), Richard “Ricky” Skerritt, likened it to a temporary relief and reaffirmed the need for the tax to be reviewed “downwards in a new and fairer system . . .”.
It was revealing to hear Chancellor George Osborne’s admission to the original “arbitrary nature” in setting of the APD bands as if, he cynically remarked in Parliament, there was belief that “the Caribbean is further away (from the UK) than California”. However, that observation may have more to do with differences in governance politics between the previous Labour Party administration and the current Conservative-led coalition of Prime Minister David Cameron.
For us in the Caribbean, the reality, as voiced by acting CARICOM Secretary General Lolita Applewhaite, is that the APD represents “a levy on this region’s development and among challenges that beset the tourism sector . . .”.
Consequently, as CTO chairman Skerritt (who is also the Tourism Minister of St Kitts and Nevis) has noted, in spite of “the sigh of relief” resulting from the postponement of a further increase in the APD this year, there must be the resolve to vigorously press ahead with advocacy for a “APD reform in a manner that further removes any competitive disadvantage and does not hamper our efforts to achieve sustainable growth in (Caribbean) tourism…”
For Antigua’s former long-serving High Commissioner to London, Sir Ronald Sanders, who regularly writes on problems and challenges facing the Caribbean, the governments of this region, more than the CTO, could make good use of the next meeting of UK-Caribbean Forum of Foreign Ministers to robustly press the case against the overall harmful effects of the APD. That includes mounting a legal challenge to the high APD bands in which the Caribbean region has been placed.
Our understanding is that the CTO has already commissioned and received the results of special studies indicating the extent to which the region’s tourism-based economies are being affected by declining tourist arrivals from traditional major markets like the UK and other sources in Europe.
Barbados and other governments would have done their own respective national assessments of the negative impact of the APD and what the situation portends for 2011 when there could very well be implemented a further hike that has been deferred for this year.
In collaboration, therefore, with the CARICOM Secretariat, CTO, Caribbean Hotel and Tourism Organization, the region’s governments can include in their strategic planning ahead to target the coming UK-Caribbean Forum of Foreign Ministers for new initiatives for a thorough, fair and realistic review of the APD. A sustained diplomatic initiative could perhaps be more appealing for some governments than resort to a legal challenge on the discriminatory APD bands. Â
The mounting concern of governments of Caribbean tourism-based economies is to secure a new system that, as the CTO said last week, “does not cripple travel to our heavily tourist-dependent region . . .”.
