APD freeze likely
Wednesday March 23 2011 | 04:20 AM

Barbados is preparing to sustain its campaign against Britain's controversial Air Passenger Duty even as expectations rise that the English government is about to abandon its increase of the tax this year.

Reports out of the United Kingdom yesterday suggested that when Chancellor of the Exchequer George Osborne presents his administration's Budget tomorrow he would announce that the air travel levy would be frozen at the present rate. One report quoted Osborne as confirming the move.

But Minister of Tourism Richard Sealy made it clear today that while Barbados would wait to get official word, an APD freeze did not the mean Barbados and the region would ease up on their campaign to have the controversial levy reduced, describing its imposition as "profoundly unfair".

Speaking to Barbados TODAY yesterday afternoon, he said "any movement of the APD to reduce it would be a good thing and any move not to increase it is certainly better than increasing it".

"March 23 (tomorrow) is 'D-Day', the Chancellor of the Exchequer will bring his Budget then and we will wait to hear what comes, but I, like all Barbadians, would be quite happy to hear that it will be reduced," he said.

"We are not telling the UK they should not tax aviation, we are not that hypocritical, but we just think the manner in which it's done is profoundly unfair and that is all that we are saying."

"We continue to support the efforts of the Disapora in the UK and of course the level of the Caribbean Tourism Organisation and as an individual government," he added.

 Criticism from Opposition

Just Monday Opposition Senator Kerrie Symmonds knocked Government for not announcing a plan to "put in place a sum of money per passenger so as to offset the impact because the negotiation that is taking place with England may or may not bear fruit".

"But meantime you need people to be coming here so you make it a little easier for them," he said.

"There is no evidence ... of the Government supporting the continuation of that booking incentive programme 2011."

Officials estimate that the expected decision by the British government not to increase APD in 2011 would cost that country 150 million in lost tax revenue.

UK Treasury officials were reported to have said yesterday that an increase in APD in line with inflation this year would have seen an economy fare to European destinations go up by 12 or more in economy, and from 24-26 for all other classes. For flights to the US, economy fare prices would have risen by 12-24 and for those to South Africa by 16-32.

They said the tax freeze was part of the government's attempt to ease the impact of current rising oil prices on its citizens.

News of the development was welcomed by one of the UK's leading travel companies, with Tui Travel CEO Peter Long calling for further changes to the tax.

Long hoped the government would remove premium economy from the same APD bracket as business and said otherwise his company "might be forced to remove the class from its planes altogether".

Caribbean destinations led by the Barbados-based Caribbean Tourism Organisation have been waging a battle against the APD for the last few years, and late last year presented a study to the David Cameron-led government indicating the extent to which the measure was impacting the region's tourism destination.

The document called The Impact of Air Passenger Duty and Possible Alternatives for the Caribbean, concluded that by the end of last year Barbados alone would have lost an estimated $204 million resulting from the APD increase in November 2009 and the expectation was things would worsen by the end of this year following another hike in November last year.