Caribbean Lobby Tackles UK Air Tax Hike

KINGSTON, Jamaica – Jamaica and the wider Caribbean have proved their capacity to mount an effective lobbying effort over the United Kingdom’s (UK) Air Passenger Duty (APD) increase, states Mr. David Jessop, Executive Director of the Caribbean Council.

Slated to come into effect in November, the travel tax increase would discriminate against the Caribbean by forcing UK passengers travelling to the Caribbean to pay more than those going to almost any part of United States. Mr. Jessop said that, for the first time, the regional Diaspora had united its efforts against the tax, and forced to British government to reassess its position regarding the tax.

“Caribbean Governments and the Caribbean Diaspora in the United Kingdom continue to fight the discriminatory nature of the banding system adopted by the British Government for the Air Passenger Duty,” Mr. Jessop said. Speaking at the Diaspora Dialogue Think Tank held in London in September, he pointed to the contradictions in the UK government positions on the issue.

Chancellor of the Exchequer, Alistair Darling told the House of Commons in his Pre-Budget Presentation on 24 November, 2008, that the flight tax to the Caribbean would increase by between 25 per cent and 87 per cent, depending upon the class of travel. By November 2010 those increases could reach as high as 94 per cent.

“I have decided to reform APD into a four-band system ensuring those that travel further and have a larger environmental impact meet that cost,” Mr. Darling said. He added that, “I believe this will be effective in reducing emissions from aviation.”

The band into which each country falls is based on the distance of its capital from London, so all of the United States is regarded as being closer to the United Kingdom than is the Caribbean.

“I have carefully considered the many representations I have received in respect of the Caribbean,” Sarah McCarthy-Fry, The Exchequer Secretary to the Treasury, told the House of Commons debate in July. She added that, “A geographical banding structure balances the aim of sending a stronger environmental signal with the need to make the reforms easy to implement.”

The result of this mechanism is than an 11 hour flight to Los Angeles will incur less duty than a seven hour flight to Kingston.

“We have always said that aviation taxation has a dual purpose, dealing with environmental impacts and also contributing to public finances,” Ms. McCarthy-Fry told the House. “That (APD) decision recognised the need for stability in the tax system in difficult economic circumstances.”

This issue mobilised thousands and got their voices heard, Mr. Jessop said. “Many in the Caribbean Diaspora who will be most affected by the issue believe that the banding for the Caribbean is potentially a UK election issue in the many marginal seats in which they live. They see the measure as discriminatory and are writing to their members of Parliament asking to know their position on the issue.”

The Finance Bill has now become law and APD banding will come into force on November 1, but the battle is far from over, Mr. Jessop said. “There is still an opportunity to have the banding modified in the 2010/11 UK budget so that the Caribbean has parity at that time with the US. The Chancellor of the Exchequer has an opportunity in his November budget statement to re-band the Caribbean.”

The September Diaspora Dialogue at which Mr. Jessop spoke, concluded with a recommendation to redouble the lobbying efforts to secure a review of the APD. It also called for the engagement of existing and new UK political leaders across all parties to make the Diaspora voice heard in order to influence policy, especially in constituencies where the Diaspora vote can influence outcomes.

Aimed at ‘Enhancing the Political and Economic Welfare of the Jamaican UK Diaspora,’ the London Think Tank targeted top business leaders in the UK and Jamaica, members of the Jamaican expatriate community and persons with economic, academic and political backgrounds related to the Diaspora. GraceKennedy and Victoria Mutual Building Society joined forces with JNBS and The University of the West Indies to host the one-day session.

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