HC Deb 12 December 1974 vol 883 cc743-5
5. Mr. Gwilym Roberts

asked the Chancellor of the Exchequer if he will take steps to make travelling expenses to and from work by office and industrial workers allowable expenses for taxation purposes.

8. Sir A. Meyer

asked the Chancellor of the Exchequer whether he will now permit travel to work expenses to be set against an individual's liabilities to income tax.

Mr. Joel Barnett

I do not think it would be right to single out this particular form of personal expenditure for tax relief.

Mr. Roberts

Does my hon. Friend accept that the increasing costs of travel are putting the ordinary shop floor worker at a growing disadvantage as compared to the director, the executive or people in this place who often find their costs covered by the company or the organisation concerned? Does he recognise that in areas like Cannock Chase, which border major conurbations, this increasing cost of travel is now acting as a positive disincentive to people to make the journey, and that this cost factor will be a weapon of unemployment if nothing is done?

Mr. Barnett

I am aware of the increasing problem of higher costs. Directors and Members of Parliament are taxed on the private benefit of car expenses, and that would include travel from home to work.

Sir A. Meyer

Is the hon. Gentleman aware that this problem is particularly acute in areas of low economic activity, particularly in rural areas? Does he realise that if there are further increases in the cost of fuel, as seems all too probable, the point will shortly be reached at which the average wage in such areas simply will not cover the cost of travel to work, and then the effect of unemployment will be very severe?

Mr. Barnett

I am aware of the problem, but it does not apply only to rural areas and I do not think that it would be fair for the general body of taxpayers to give a subsidy in this respect.

Mr. Grocott

The housing problems of the conurbations will be solved only if people are prepared to move out to new housing areas outside the conurbations. Is my hon. Friend aware that one positive disincentive to their doing that is increasing travel costs and the increasing costs of private motoring? Does he agree that a proper tax incentive system covering people's journeys to work would encourage public transport, and not private transport, and could be a very worthwhile social objective?

Mr. Barnett

My hon. Friend has raised a very good point, but I do not believe that tax relief of this kind is the best way to help. If it were done in this way it would be necessary to look at the tax assessments of about 20 million taxpayers, which would involve an enormous administrative problem.

Mr. Spicer

If the Minister does not believe that tax relief is the right way to help people, particularly in rural areas, how does he suggest this should be done?

Mr. Barnett

There are many other ways in which one can help. One is to see that we have a decent public transport system, and that is our objective.

Mr. Robert Carr

By putting up the price of petrol via the VAT mechanism are not the Government putting the whole burden of the higher price on the private motorist and no burden on the business motorist?

Mr. Barnett

I am interested to hear the right hon. Gentleman's question. I assume, therefore, that he would rather increase the burden of industrial costs and affect exports. I would have thought that he would welcome the way that we made this increase through the VAT system.