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Now that the initial well-wishes for
the success of the new Conservative-Liberal Democrat
leadership are starting to wane in the United Kingdom
and around the globe, questions about the coalition
government's future policies will start to come into
focus.
Specifically, many wonder what will
it mean for the Caribbean that a nation with such
a high level of influence in the region has gone through
such a radical change at the top. There has not been
a British coalition government in 70 years.
Early feedback seems to be positive,
with an almost immediate announcement from #10 Downing
Street that plans are being laid to replace the burdensome
Air Passenger Duty (ADP) with a per-plane tax. The
ADP, imposed during former Prime Minister Gordon Brown's
tenure, mandated a specific levy on all air passengers,
depending on the distance between London and their
travel destination.
Under the ADP regime, the Caribbean
was placed in 'Band C,' made up of locales 4,001 -
6,000 miles away from the British capital. This measurement
translated to an EC$198 duty in November 2009, a rise
of up to 112 percent The tax was also due to increase
this year.
Caribbean tourism officials were extremely
unhappy with the tax, positing that it was costing
their respective countries potential visitors by adding
to required travel costs per passenger. On an annual
basis, approximately 1.5 million U.K. tourists travel
to the region.
The new duty being discussed will
be on a per-plane basis, rather than per-person. The
'eco-friendly' policy change is aimed at reducing
the number of half-empty planes flying, and will mean
that full flights will be taxed proportionately less
than more sparsely populated ones.
The bottom line is that costs would
shift from passengers to the airlines, a development
that was naturally not received well by the latter,
including British Airways (BA) and Virgin Atlantic,
both of which service the Caribbean.
A BA representative recently questioned
just how much of a positive environmental impact the
change in tax would have, in addition to calling the
plans "unworkable" and a measure that could
"disadvantage" the British tourism industry.
Comments made by Caribbean Tourism
Organisation Secretary General Hugh Riley in response
to the announcement that the ADP would be scrapped,
indicated his belief that persistent lobbying by his
organization and others in the region had an impact
in bringing about the proposed travel levy change.
While many in the travel industry
are encouraged at this point, they all have their
fingers crossed until the details of the new tax plan
are revealed. Right now, things look positive, but
it is oftentimes hard to tell how new policies will
actually pan out.
Still, it is somewhat surprising to
see such an immediate policy change that has the potential
to be favorable to the Caribbean. Time will tell if
the Conservative-Liberal Democrat coalition will prove
to be a better partner than the Blair/Brown Labour
government.
Needless to say, Britain has had a
long, and sometimes checkered; history in the region
and it should be noted that current relations between
London and Overseas Territories such as Anguilla have
been far from smooth.
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