UK freezes air 
passenger duty

The United Kingdom has announced it will be freezing air passenger duty in 2011.

The tax was introduced in 2009 and upped the duty on flights to the Caribbean by between 25 per cent and 87 per cent in 2009 with a further increase to 94 per cent by November 2010.

Calculations suggested that this meant a family of four would pay nearly $800 in taxes if they travelled in premium economy.

But UK chancellor George Osbourne announced in the House of Commons that the second increase would not kick in until 2012 and that existing tax bands were ‘arbitrary’.

Currently, the Caribbean is in a higher tax band than the United States due to Washington’s relative proximity to London.

However, Caribbean organisations have repeatedly called this unfair and noted that California – and Hawaii – are considerably longer flights than from London to most Caribbean countries.

Marcia Erskine of British Airways told the Compass that while BA welcomed the freezing of rates for 2011 plus rejection of per-plane tax and closure of loopholes for private jets, the fact remained that airlines were taxed more heavily in the UK than anywhere else in the world. “We want to assist in creating enduring growth for Britain, but current levels of taxation prevent us from playing our full part. We would like the forthcoming consultation to result in removing unfair anomalies and also begin the process of returning the tax take from aviation to a fair and proportionate level. “From next January, airlines will face the additional costs of the EU carbon-trading scheme. UK tax revenues from aviation must be reduced to ensure that the total fiscal burden on the industry does not become even greater,” she said.

Caribbean Tourism Organisation chairman Ricky Skerritt said that the organisation was pleased with the announcement.

“The Chancellor’s statement to his parliament that the arbitrary nature of the bands ‘appeared to believe that the Caribbean was further away than California,’ is a clear recognition of a crucial issue that has been the focus of the strong lobbying efforts by the Caribbean Tourism Organisation and its allies in the private sector, the Caribbean High Commissions, and the Diaspora.”

Mr. Skerritt said it was a small but important victory and that there had been discussions between the organisation and the UK government to review the issue. Further discussions will take place, he revealed.

“All Caribbean tourism interests must continue to fight for air passenger duty reform in a manner that further removes any competitive disadvantage, and does not hamper our efforts to achieve sustainable growth in tourism, for the benefit of the people of the Caribbean,” he said.