JAMAICA DIASPORA CONFERENCE AIR PASSENGER DUTY DIASPORA RESPONSE

JAMAICA DIASPORA CONFERENCE AIR PASSENGER DUTY DIASPORA RESPONSE BY HIGH COMMISSIONER HER EXCELLENCY ALOUN NDOMBET-ASSAMBA

Introduction • The Air Passenger Duty (APD) is an excise duty or tax that was introduced by the Government of the United Kingdom in 1994. Then it was intended to be a "green" tax to tackle the issues of pollution caused by flying. • It was originally £ 5 for short haul flights and £ 10 for long haul however, over the past few years the tax has risen by 360%. In 2011/12, the British government collected £ 2. 2 billion from air passenger duty alone. • The APD four band system is discriminatory and particularly harmful to small developing Commonwealth nations. The system unduly favours the United States and short haul destinations in Europe. • As taxes on air travel and tourism are extra-territorial in effect, their impact on development should be fully considered. Tourism is the largest contributor to economic growth in the Caribbean and many other Commonwealth nations. In the case of the Caribbean, travel and tourism contributed on average 14. 7 per cent of all GDP in 2011 but in nations that are tourism dependent this figure rises to as much as 74. 2% of GDP (Antigua and Barbuda).

• The main inequality of the banding system is that when we are travelling to Jamaica which is four thousand seven hundred miles (4, 700 miles) we pay more duty than those travelling to Hawaii some seven thousand (7, 000 miles) away. This is simply because the bands are calculated on how far the capital of each destination is from London. • Another flaw of APD is that people who are travelling on premium economy are required to pay the same rates as those paying for a first class fare, despite the significant difference of ticket prices. • The tax is inequitable and disproportionate in its scope and level to air passenger taxes levied by other nations. • The UK Government has been presented with solutions that are revenue neutral and have significant support but has chosen to ignore these.

• The Caribbean is the most tourism dependent region in the world. At a time when the Caribbean is experiencing low GDP growth, high levels of debt and rising food and energy prices, a changed approach to APD could provide a boost to the Caribbean economy in a way that is both valuable and effective. • All tourism dependent nations in the Commonwealth, including the United Kingdom, would benefit from the restructuring of APD. • Specialist travel agents that deal with travel by Commonwealth Diasporas report reduced frequency of travel by minority groups. APD is causing the revision of air routes. In the case of the Caribbean, British Airways (BA) has reduced flights due to rises in APD and reassigned them to the United States.

Bands Reduced rate (approximate (lowest class of travel) distance in miles from the UK) Standard rate (other than the lowest class of travel) From 1 April 2012 From 1 April 2013 From 1 April 2014 Band A (0 – 2000 miles) £ 13 £ 26 Band B £ 65 (2001 – 4000 miles) £ 67 £ 69 £ 130 Band C £ 81 (4001 – 6000 miles) £ 83 £ 85 Band D (over 6000 miles) £ 94 £ 97 £ 92 Higher rate (applies to aircraft of 20 tonnes and above with fewer than 19 seats) From 1 April 2013 From 1 April 2014 £ 26 £ 52 £ 134 £ 138 £ 268 £ 276 £ 162 £ 166 £ 170 £ 332 £ 340 £ 184 £ 188 £ 194 £ 376 £ 388

DIASPORA RESPONSE • For several years now, Caribbean Governments and the Caribbean Diaspora in the UK have been working through the Caribbean High Commissioners to lobby the British government to lower the charge for Caribbean flights. We believe that we are being unfairly treated by the APD. • The Diaspora is to be urged to use its political clout. A letter writing campaign , in key Constituencies where the Caribbean vote is critical, is to be intensified. • The Chair of the Executive Committee of the Commonwealth Parliamentary Association, Sir Alan Haselhurst MP has written his support of our lobby.

• Since this year , the campaign to re-band the Caribbean has moved into a new phase. • A Caribbean High level APD Committee that I chair has been established. • Jamaica National Building Society (JNBS) has donated seed funding of 20 thousand pounds (£ 20, 000). • This Fund must be matched and the campaign needs some 50 thousand pounds (£ 50, 000).

• Caribbean Governments need to come together to create better and wider awareness of the APD • The High Level Committee has written to stakeholders in the Travel and Tourism Sectors seeking financial support for the campaign. • Other stakeholders are to be approached to financially support to lobby. The previous campaign did not get very far due to a lack of funding

• The APD Coordinating Committee chaired by Mr Gilmour Smith has been reactivated. This committee has representatives from all affected countries and stakeholders. • The Coordinating Committee is developing a range of strategies aimed at raising funds and increasing awareness of the negative impact of the APD.

• Support and endorsement of the lobby is to be sought from high profile Caribbean personalities and celebrities i. e. international athletes and the visiting West Indies Cricket team. • The Churches are to be approached to get on board and spread the word. • Re-band the Caribbean from band C to band B • We need your help

CONCLUSION • The APD is here to stay. It brings in significant revenue for the British Government which has projected that the duty will raise £ 3. 2 billion from receipts in 2015 and £ 3. 8 billion in 2017. • However this does not mean that we should not continue to fight for a more equitable system. • We must continue to lobby for the Caribbean as an area of unique and special interest.

• Lord Bill Morris led a group of five Labour MPs to meet with Cathy Jamieson, the Labour Party’s front bench Shadow Economic Secretary, on 14 May to discuss APD and the Caribbean. Cathy Jamieson is sympathetic to the Caribbean position. • All political parties are beginning to develop their thinking about issues for the next general election due in May 2015 with a view as to what will be included in their party manifestoes.

• This means that the next six to nine months will be critical to lobbying on APD and the Caribbean, and more generally to ascertain whether the political parties will maintain aviation travel taxes in the form of APD after the next election or seek some alternative tax or source of revenue to replace it. • Use your vote to make a difference