Prime Minister Hon. Dr. Kenny D. Anthony is disappointed by the response of the Chancellor of the United Kingdom, Hon. George Osborne, to his letter to the Chancellor complaining about the imposition of the Air Passenger Duty (APD) on persons traveling from the United Kingdom to the Caribbean.
According to the Prime Minister, “The letter is interesting in one respect. The Chancellor more or less confirms that the APD was introduced primarily to raise revenue to tackle the deficit in the United Kingdom”.
This is what the Chancellor said: “In your letter you recognize the fiscal challenge that the UK faces and so I hope you will understand that the Government remains focused on tackling the deficit in order to protect the UK economy from global instability and secure sustainable long-term growth. Air passenger duty makes a vital contribution to the public finances and it is important that revenues from the duty are maintained.”
“It is interesting”, added the Prime Minister, “that the United Kingdom opted to retain its discriminatory approach in the implementation of the APD. In my letter, I drew to the attention of the Chancellor that it was unfair and unjustifiable for travelers from the United Kingdom to the United States to pay a lower duty than travelers from the UK to the Caribbean, when, for all practical purposes, the United States and the Caribbean are in the same geographical zone”.
The Chancellor responded thus: “You refer to revenue neutral solutions for changing the structure of the APD in your letter. As you will be aware, changes to the banding structure were considered in detail within the consultation. In weighing up the case for reform, the Government recognized that no banding structure would be entirely free of anomalies and that a revenue neutral move to a two or three band system could not be achieved without a rise for passengers flying to band A and B, some 90% of total passengers.”
The Chancellor agreed that: “The links between the UK and St. Lucia are important for both countries, especially given the large Caribbean diaspora in the UK, for whom air travel is an essential means to visit friends and family.”
He indicated that the UK Government “cannot carry out another extensive consultation on APD but will continue to monitor the situation.”
According to the Prime Minister, “Given the Chancellor’s response, it is now for CARICOM countries to consider their options and to take the issue to another level.”