Airport tax to fund Africa aid

GORDON Brown is to divert millions of pounds a year in tax raised from passengers landing at British airports to fund aid to Africa, it emerged last night.

In a highly-unusual move, a significant chunk of the £900m raised in air passenger duty every year will be ring-fenced.

The announcement came on the eve of next week's G8 summit in Gleneagles and appears designed to show the Government is taking significant practical steps to end poverty in Africa.

Travellers currently pay between £5 on economy flights to Europe to £40 for long-haul business class flights. The Treasury insisted last night that the tax would not increase as a result of the move. Mr Brown said: ' There is a discussion about the use of air ticket levies as a contribution to that (aid). We are prepared to hypothecate some of our air ticket levies to do so.'

But the highly unusual plans to ring-fence money for Africa raised through taxes could prove controversial - especially because air passenger duty is highly unpopular.

France, Germany and Italy - which do not have air passenger duty - have indicated that they could introduce new airline ticket levies to fund their contribution to the International Financing Facility (IFF), the brainchild of the Chancellor designed to donate money to the world's poorest countries.

A Treasury official said last night: 'The French and others are interestedin the idea of new aviation taxes to raise money for aid. We already have an air passenger duty so we will participate in that Europe-wide process. From this point a large proportion of income from air passenger duty will go towards aid to Africa.'

France, Germany and Italy are believed to be considering a voluntary scheme where passengers can choose to opt out of the special aid levy. But it is unlikely that UK passengers would have a say in where their air duty went.

The three European countries' support for the IFF is a major boost for Mr Brown after George Bush indicated that the U.S. would not get involved. Cash from air passenger duty would provide a reliable source of funding for the IFF.

The Treasury has already ring-fenced duty on tobacco for healthcare. Further details of the plans are expected to be announced before the G8 summit starts next Wednesday.

Air passenger duty has been a bone of contention for flyers since it was introduced by Kenneth Clarke in 1994 - and has rocketed under the Labour Government. The move by France, Germany and Italy to introduce a completely new airport tax is likely to be met with fierce opposition from the airline industry, however.

Ulrich Schulte-Strathaus, secretary general of the Association of European Airlines, said: 'The airline industry already contributes a lot through tourism to developing countries.

It would be more beneficial to those countries to ease the restrictions on flights between them and Europe than to make it more expensive to fly to them by imposing a tax on tickets.'

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GEORGE BUSH announced last night that he would double aid to Africa in a move that is clearly designed to help Tony Blair. Downing Street leaped on the news, which has come days before the G8 summit in Scotland. 'It creates real momentum for a successful outcome at Gleneagles,' said the Prime Minister's spokesman.

Mr Blair has made African development a key aim of next week's summit. He has been lobbying the President for months to increase aid and Mr Bush has now done so at least in part to thank Mr Blair for his unswerving support in Iraq.

The US aid figure for Africa will now be $6.4bn (£3.5bn), but the increase will be phased in over five years.