APD and the Caribbean

All Quiet On the Western Coast - The New Lime Grove Upmarket Mall at Holetown, Barbados

Whilst I was on holiday in Barbados (yes lucky me I admit) I do keep an eye on the local papers and the following from the "Barbados Advocate" caught my eye at the end of April.

"There is the intention to double the current bilateral trade between the United Kingdom and Barbados in the next few years.

This is the premise of the Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on Income and Capital signed by UK Minister for the Caribbean, Henry Bellingham, and Minister of International Business and International Transport, George Hutson, yesterday.

Bellingham noted that currently the bilateral trade stood at £100 million and outlined that the capacity for increased trade was there, especially that of Barbadian exports to the UK.

“I think that there is a huge amount of potential between our two countries because I want to see Bajan exports coming to UK, tourism being exported to the UK even more, I want to see more Brits coming here, but we also want valued goods,” he said."

The last paragraph did cause me to smile wryly.  Mr Bellingham, apart from being MP for NorthWest Norfolk is  Parliamentary Under-Secretary of State at the Foreign and Commonwealth Office which includes the remit for the Caribbean.  His ministerial briefs also include the United Nations, Africa, and other Overseas Territories.   As such he must have to travel by air frequently - fortunately for him I am sure his travel is paid for by you and me.  Just as well as most of his overseas responsibilities appear to be in the highest mileage bands of Air Passenger Duty!!

He should note that  the cost of APD went up by 8% this April and that with Economy passengers paying £81 a head APD for (Band C) Caribbean destinations British tourists will need more than his just "wanting to see more Brits" to encourage them to fly to Barbados.  Sadly,  two UK cruises have apparently also decided to cut Barbados recently.  The effects of APD both directly and indirectly on this lovely island are definitely beginning to show.  Hoteliers are talking about 50% cuts in booking rates year on year currently.  The Almond Beach Hotel resort is in trouble with the potential for the loss of 600+ jobs reportedly on the line, a huge blow to this island's economy.  Even two years ago Bajans were confident that their place in the sun was assured.  However, the realities of high fuel costs and retrenchment in tourists' budgets are now being recognised - for instance there are  now even more "For Sale" signs up along the beach and near beach properties beside the West coasts Highway 1 than there were six months ago.  Some being offered at significan discounts to a year ago.

As a minister of the Government Mr Bellingham should have reflected as he signed the agreement with Barbados,  it is all very well the UK  being "open for business" and wishing to double the amount of trade between Barbados and the UK,  but with fuel costs where they are, together with  such a belting great Tax on air travel, both items create a significant barrier to entry and trade.  Hence, it might be a while before the laudable objectives of the treaty he just signed are reached.