APD and the Caribbean
The UK is one of the most heavily taxed, if not the most heavily one for airline flights. But it doesn’t only hit people in the UK. Because of the high cost, overseas countries that rely on tourism for substantial national income are worried we won’t travel there.
Take the Caribbean.
Because of a badly thought out system of taxation, travellers to the Caribbean pay more APD than if you were to fly to the west coast of the USA despite the fact that the distance is less. So last week, this incongruity was raised in parliament by Roger Godsiff, an MP who has a high number of constituents with links to the Caribbean. Was the government sympathetic? No the answer that Sarah McCarthy Fry gave on their behalf was that it would be not be straightforward to reform the APD. Six months after consideration began, they still have not found a solution. Despite the fact that the issue has been raised face-to-face by Caribbean politicians, nothing has happened.
For a start, if you had to have this tax at such an oppressive rate, you could tax it on the number of miles flown after you leave a UK airport. (that way you wouldn’t penalise domestic tourism) instead of the four bands we currently have. It is not only the Caribbean that is affected. People flying to Egypt pay at the same level. The Dutch dropped the tax. They worked out that it caused a net loss of €900 million per year because of not having the tourists. Polls show people think it is unfair but you can understand why the government is reluctant to drop a cash cow that gives them billions per year. But they can’t see how much is being lost to the UK by the loss of visitors. Sooner or later as we compete for the tourism spend we will lose to to those that charge less. Will their eyes ever open?