Air Passenger Duty and Developing Economies

Lord Tomlinson Excerpts

Wednesday 18th May 2011 Lords Chamber

[Lord Tomlinson]

My Lords, I, too, congratulate the noble Baroness. She has achieved unanimity from the Liberal Democrat Benches in this House, which I think her party leader must have been hoping for in his more controversial efforts yesterday.

The Caribbean has suffered grievously in recent years, partly because of national disasters that wiped out sugar crops, which had an ongoing effect on the rum industry. Then there was the harsh treatment by the World Trade Organisation in its judgment on Caribbean bananas, which were discriminated against in favour of the Latin American bananas, which had much greater clout with the American Administration. Today, we have the first real glimmer of hope. My experience tells me that Chancellors of the Exchequer do not make the sort of concession that they made in the Budget when, on 23 March, the Chancellor talked about a consultation document and a review of the structures of the existing banding. Certainly, Chancellors of the Exchequer do not normally forgo a tax in a year when they had not given notice of it. Chancellors usually want to take credit several times over, but this came as a surprise to everybody.

With this unanimity we have the circumstance in which there must be a multiplication of the pressure on the Government to deliver on what most people have accepted is three-quarters of the way towards making a promise. That is certainly how I interpret the Chancellor’s views. I had the opportunity to speak to Bruce Golding, the Jamaican Prime Minister, about this some time ago, who left me in no doubt of the importance of these decisions, not only to the Jamaican economy but across the Caribbean.

If we look at a couple of the annexes that were provided for us by the Caribbean organisations, we will see the percentage of export revenue raised through tourism. I shall not go through the list but will pick out one or two examples. For Antigua, the figure is 62.7 per cent; for Aruba, 64 per cent; for the Bahamas, 63.4 per cent; and for countries such as Grenada, 66.2 per cent. Every one of them is devastated at the impact of this threat to the major dollar earner in their economies.

There is something almost obscenely counterproductive in this tax. On the one hand, we find various forms of aid to help many of these countries and, on the other hand, we take a decision which appears in domestic terms to be almost insignificant but which has a far more devastating effect on the economies of these countries than can be offset by the aid that they receive.

The statistics have already been cited for Washington, which is 3,667 miles from here. The noble Lord, Lord Morris, cited Kingston in Jamaica, but that is by no means the most badly affected of the Caribbean islands. Antigua, for example, is affected more significantly. Therefore, I am grateful to the noble Baroness. I hope that we commit ourselves to the fact that the fight starts today and recognise that this is not its culmination. She has reinvigorated Parliament to take the fight to the Government.