UK proceeds with hike in controversial air travel tax

LONDON, England, Wednesday November 30, 2011 – The cost of air travel from the UK to the Caribbean looks likely to rise further next year after the British government announced yesterday it will proceed with a 10 per cent increase in the controversial Air Passenger Duty (APD).

The decision was immediately condemned by airlines, including Virgin Atlantic and British Airways.

“By increasing this tax by double the rate of inflation, he (Chancellor George Osborne) is further deterring inbound tourism and foreign investment, and choking off yet more job opportunities for young people,” airlines said in a joint statement.

The Treasury said in its Autumn Statement that the tax would increase on April 1, 2012 as was previously announced.

Owners of private aircraft could, for the first time, start paying the APD in April 2013.

The Caribbean could still get a reprieve as the Treasury department will, on December 6, address possible changes to APD’s contentious banding system, under which the rate is calculated.

Regional governments and industry partners have argued that the system favours other destinations like the United States.

For the past two years, the Caribbean Tourism Organisation and other groups have been lobbying the British government to adjust or scrap the travel tax, stating that it discriminates against the Caribbean and its Diaspora in the UK.

The British government wants to generate about £2.6 billion from the APD in 2011/12, up from £2.2 billion during the previous financial year.

The Office of Budget Responsibility said the figure will increase to £2.8 billion in 2012/13. Click here to receive free news bulletins via email from Caribbean360. (View sample)