'Any payment to an employee of a local authority to meet the cost of his travel between his main place of residence and his main place of work shall not be regarded as income for the purposes of taxation up to 5th April 1978, provided that the employee was an employee on 31st March 1974 of another local authority but was unable, owing to local government reorganisation, to continue in employment at the same main place of work, and his present main place of work is the nearest for practical purposes to his old main place of work.'—[Dr. Edmund Marshall.]
§ Brought up, and read the First time.
§ Dr. Edmund Marshall (Goole)
I beg to move, That the clause be read a Second time.
The purpose of this new clause is simply to remove an injustice which I 1560 shall describe, arising from local government reorganisation. Hon. Members will recall that reorganisation took place in England and Wales in April 1974, and in Scotland in May this year. The injustice to which I refer continues to be suffered by many local authority employees. These are the employees who, as a result of local government reorganisation, had to terminate their employment with the former authorities and, for one reason or another, had to seek new positions—not only new positions with new authorities but also new positions which involved working at new places, sometimes at quite a considerable distance from their previous office.
I recall when local government reorganisation was considered in the House. Like the Minister of State, whom I see in the Chamber for the first time on an occasion of this nature on the Treasury bench and whom I congratulate on his preferment, I served on the Standing Committee which considered the Local Government Bill in 1971–72 and on which the Minister was the right hon. Member for Crosby (Mr. Page). In those proceedings it was the general intention that existing local government employees should suffer in no way financially purely as a result of reorganisation. I think I am right in saying that that general principle was written into the Local Government Bill. It may be useful if I quote to the House at a little length from Section 255(3) of the Local Government Act 1972, which enables provision to be made… with respect to any person who is transferred by or under the order or regulations from the employment of one authority to that of another so as to secure that—(a) so long as he continues in the employment of that other authority by virtue of the transfer and until he is served with a statement in writing referring to the order or regulations and specifying new terms and conditions of employment, he enjoys terms and conditions of employment not less favourable than those which he enjoyed immediately before the date of transfer;Then it goes on to talk about the new terms and conditions of employment that might be specified and ends by requiring that such new termsare not less favourable than those which he enjoyed immediately before the date of transfer.Unfortunately, that general principle has not worked out fully in practice for many local government employees who were 1561 forced by reorganisation to find new jobs, requiring them to transfer some distance from their previous main places of work. That kind of situation arose in several ways. I shall give three examples.
First, there were many places in which old local authorities ceased to exist. One of the purposes of reorganisation was greatly to reduce the number of local authorities. This has meant that, particularly in rural areas, there are now no local authority offices within the area of the old local authorities. Because of this, many employees of the old authority are forced in the nature of things to travel some distance to their new offices.
Secondly, the redistribution of local government functions between the two spheres of the new local government structure has sometimes led to a redundancy of the previous offices of some local authorities. For example, where an old county borough was merged into the new county, and where the area of that county borough simply became a district under reorganisation, many of the major functions previously administered in the county borough, such as education, highways, social services and sometimes the police, are no longer centrally administered in the former county borough. Many of the people involved in that work have had to move to other county headquarters.
Similarly, some former county functions have been reassigned to district level in the new metropolitan counties, so that again we find that the old office accommodation, after reorganisation, has been in the wrong place for the administration of the corresponding services. People who wanted to stay in the same kind of work in local government have had by force of circumstances to find employment some distance away.
Thirdly, one effect of local government reorganisation was in many parts of the country to introduce completely new boundaries, with a pattern of administration completely changed from what had gone before, the old offices having by reason of geography to close down. There was a typical example in my constituency, with regard to education administration. Under the old West Riding County Council, as the local education authority, there was in the town of Goole a divisional education office with a staff of 17 administering the schools in the borough of 1562 Goole, Goole rural district and Thorne rural district. Under reorganisation. Goole borough and rural district went into the new county of Humberside, while Thorne rural district became part of the Doncaster Metropolitan District.
Because of that change of boundaries, it is no longer possible to have the office of an educational division at Goole. The new Humberside education authority has decided to administer schools in Goole from offices in Scunthorpe. Meanwhile, the schools in the Thorne area have come to be administered from education offices in Doncaster.
In those circumstances, the staff of the old education office in Goole were all displaced by reorganisation. I believe that nearly all of them have found suitable new posts in the new local authorities, but those who wanted particularly to stay in education administration are no longer able to carry on that work in the town of Goole, and a group of them have transferred to the education offices in Doncaster. During the past year, since reorganisation, they have commuted daily about 15 miles each way to and from their new place of employment.
Those are examples of problems which could have arisen in all parts of the country as a result of local government reorganisation. I believe that in all these cases the new employing authorities are refunding such employees any extra travel expenses that they incur by having to make the additional journey. Indeed, I understand that there is a general agreement among local authorities that such travelling expenses should be paid for four years after reorganisation. That period will allow for the fact that in many cases it was not convenient for employees to move house at the same time as reorganisation, because of family ties or because they were still young single people living at home with their parents. In many of those cases, they had taken up their work in the old office simply because it happened to be near their homes.
But, in spite of the generosity of local authorities in refunding these extra travelling expenses necessitated by local government reorganisation, the Inland Revenue has insisted on treating the refund payments as taxable income. Consequently, these local authority employees are out of pocket because of the extra 1563 travelling that they have to undertake as a result of local government reorganisation. They also have to spend more time during their working day going to and from work. It seems to me that the whole spirit of Section 255(3) of the Local Government Act 1972 has been overlooked in this case, and a genuine feeling of injustice has arisen.
I appreciate that the Inland Revenue is sticking to its general rules on the payment of travelling expenses. I do not intend to discuss those rules now. I have deliberately restricted the clause to a particular case. But it is clear to me that the injustice that I have described cannot be removed unless there is exceptional legislative dispensation for those displaced local authority employees. The clause seeks to do exactly that for a period of four years after reorganisation, thereby covering the period during which travelling expenses are to be refunded by the new authorities, and giving time for employees to adjust themselves domestically without too much inconvenience.
I believe that the case for these local authority employees is unique among all the claims for non-taxation of travelling expenses, because their problem has been caused directly by the Act of Parliament which led to reorganisation. Parliament created this injustice and it is time for Parliament to put the matter right.
§ 6.0 p.m.
§ Mr. Nigel Lawson (Blaby)
I shall not detain the House as long as did the hon. Member for Goole (Dr. Marshall). I do not know what my hon. Friends or the Government Ministers thought of his speech, but I did not think the hon. Member for Goole made his case. He says these local authority employees, who I am quite sure are extremely worthy people and about whom he clearly has very great knowledge, have suffered disruption involving extra expense and that, because this was a result of local government reorganisation brought about by an Act of Parliament, this makes them a unique case. I do not see that. There are all sorts of reorganisations in private industry which involve people in longer journeys, but they get no tax-free income as a result.
1564 There may be an Act of Parliament setting up the National Enterprise Board and further Acts and orders following that may reorganise certain parts of industry with the result that some people have to move. Indeed, as my hon. Friend the Member for St. Ives (Mr. Nott) reminds me, the Chairman of the British Steel Corporation, Sir Monty Finniston, a man revered on both sides of this House, may have to move his office and suffer dislocation and additional expense.
Are we to say that local authority employees in one kind of reorganisation should have tax-free perks which no one else who suffers from a reorganisation receives? That seems a strange principle and the case for it has not been made.
I am surprised that the hon. Member for Goole did not recall that, not long ago, the Secretary of State for the Environment, addressing local authorities in general, said: "The party is over". Now the hon. Gentleman is asking for more presents. I am sure that the Chief Secretary to the Treasury will confirm that the party is over. I realise that in the Chief Secretary's discussions with his colleagues from spending Ministries, he has very great difficulty in convincing them that the party is over. We all know that he is doing his best. We welcome the efforts that he is making and wish him more success than he has had so far.
Many of us got the impression that the reorganisation of local government was something of a bonanza for local authority employees. They got grander titles, grander jobs and grander salaries. Can the hon. Member for Goole assure us that none of these people he is talking about has not already been more than recompensed by a larger salary for the little extra travel and expense? I suspect that many people would feel that, at a time of considerable hardship for this country, when standards of living are to fall, local Government employees should not be protected and should not be given tax-free benefits on top of any rises they may already have had.
The people who have suffered the most dislocation from reorganisation are those in the private consultancy firms who used to assist local authorities when they were responsible for water and sewerage services. Now that these responsibilities 1565 have been transferred to regional authorities, the consultants are no longer being employed. The job is being done entirely by local government officials, and I understand that NALGO insisted that only its members should do this job. There has been very much greater dislocation and disruption for this small segment of the private sector, but no provision is to be made for them. I am not claiming that it should be. I am merely pointing out the inconsistencies in the argument.
Has the hon. Member for Goole considered whether his recommendation is consistent with the spirit of the letter of the Remuneration, Charges and Grants Bill, published today, which in an extraordinarily arbitrary way seeks to implement some of the provisions of the White Paper "Attack on Inflation". I hold no brief for this shoddy Bill, but I assume that the hon. Member will be supporting it vigorously.
The hon. Gentleman has not chosen the best of days to put forward his special plea. I am not referring to Members' salaries—nothing could be further from our thoughts—but on a day when certain local government employees, including Mr. Swaffield of the GLC and others, have had very big increases, it was rather tactless of the hon. Member to put forward a new clause of this kind.
§ Mr. William Wilson (Coventry, South-East)
As a local government representative, I was glad to put my name to the new clause. I did so because I feel that a number of individuals affected by the reorganisation of local government have suffered an injustice which the clause seeks to remedy. We know that for a long time the cost of travelling to work has not been an expense for which one can claim an income tax allowance, but despite what the hon. Member for Blaby (Mr. Lawson) has just said I believe that local government representatives are in a special class. Their difficulties and travelling expenses have arisen because of a decision of this House and we should see that no exceptional burden is placed upon them.
I do not accept the argument that we should not help them because others might be similarly entitled to claim assistance. The remedy is not to bar local government employees from the benefit 1566 but to remove the disability suffered by others.
I am sorry that the hon. Member for Blaby has left the Chamber. When he talks about the party being over, he should recognise that for the people covered by the new clause the party never started. When these individuals draw their travelling expenses they are paid only the actual cost of the travelling, and there is no profit to be made from it. This is not a question of travelling expenses plus income tax. The Treasury Bench should accept the clause. There is no reason why individuals who are affected in this way by a decision of this House should be out of pocket.
§ Mr. Graham Page
I support the hon. Member for Goole (Dr. Marshall). I could not disagree more with my hon. Friend the Member for Blaby (Mr. Lawson) and the fallacious sledgehammer that he swung at the hon. Member for Goole and his very modest clause. I am deeply concerned on this issue from a constituency point of view and from the fact that I was the Minister in charge of the Bill to which the hon. Member referred.
I shall spell out my constituency example first because I have been in correspondence with Ministers about it. The new borough within which my constituency lies consists of three former boroughs, an urban district council and a town which consists of a good many parishes. When the local Government functions of all these various authorities were combined, their administration was split between all the convenient buildings and a number of local government servants had their jobs moved some distance away. The metropolitan borough of Sefton is about 10 miles long and occupies a strip along the Mersey coast. Employees whose administration moved from one end of that borough to the other now work a considerable distance away from where they were originally working. The borough has been discharging the extra expense of travel to which these employees have been put.
This is a question purely and simply of returning to those employees extra disbursements which arose because their place of work was changed. Their work is the same. That is where my hon. 1567 Friend the Member for Blaby, whom I seem to have frightened out of the Chamber, was so wrong. There is no question of new appointments, and the talk about a bonanza for the ordinary middle-level local government employee is a lot of nonsense. There is no question of a change of appointment or engagement. These people are doing the same work as they were doing before but they are required, by reason of local government reorganisation, to do it somewhere else. People in my constituency are suffering because they have to pay tax on these disbursements. The money is treated as part of their remuneration instead of being treated, as was intended, as payment for extra expense caused by the movement of the administration of their work.
I recollect, as a Minister, both in Standing Committee and at the Dispatch Box, giving assurances that local government servants would not suffer from the reorganisation, and the hon. Member for Goole has read out the clause which would give effect to that assurance. It is utterly disgraceful that on a matter which does not involve party politics an assurance given by a previous Minister should be overridden by the present Government.
I have received great sympathy from the Ministers in the Department of the Environment. Those who advise them know perfectly well what I intended by the Act. I gave assurances to the House that I intended that local government servants should not suffer by the reorganisation. After the Act became law and was being administered by the new Government, the Treasury denied that any such assurance had been given. I cannot put my finger on the precise column in Hansard, but I am sure that hon. Members who took part in proceedings on the Bill will confirm that it was certainly the understanding of all of us that the assurance had been given for the benefit of local government servants.
I am quite sure that if the Treasury Ministers asked NALGO about it, it would confirm what I have said. I know that NALGO has been in conference with Treasury officials on this very subject. I beg the Government to take this matter seriously, not in the jovial manner in which my hon. Friend the 1568 Member for Blaby put it before the House. There is no question of a bonanza. This is a very small matter of finance but it is important in respect of the undertaking given to local government servants. Failure to observe it is letting down a former Minister on a completely non-party political matter. Assurances given by one Government on non-party political matters should be honoured by succeeding Governments.
§ 6.15 p.m.
§ Mr. John Cope (Gloucestershire, South)
To demonstrate that this is not a party political matter, I shall oppose my right hon. Friend the Member for Crosby (Mr. Page). The hon. Member for Coventry, South-East (Mr. Wilson) may have put his name to the wrong new clause. He said that if other people were placed in a similar situation, the same sort of arrangement should be extended to them. That is the purpose of new Clause 18. It seeks to extend the allowance in respect of travelling expenses to everyone going to work. There are arguments in favour of new Clause 18 and of a wider allowance for travelling to work, but I do not accept them. I do not favour new Clause 18, although it is possible to make a respectable case for that kind of allowance. It is not possible, however, to make a respectable case for putting certain local government employees in a very special tax position.
I believe that there is only one precedent for this arrangement. There was a wartime allowance for travelling to work for people who had been bombed out of their homes and were forced to move on that account. However, those were obviously special wartime circumstances, which we hope will not recur, and I do not regard them as a sufficient basis for the proposed allowance.
Not all local government employees would benefit from the suggested concession. There are plenty of local government employees who have been and will be required by their job, and sometimes as a result of legislation, to move their place of work, The clause covers only those who are obliged to move because of local government reorganisation. It would be wrong to put that group in a special position.
There is an old Chinese proverb which says that a journey of a thousand miles 1569 begins with a single step. This is a very small step, as my right hon. Friend made clear, but it opens up a very long journey down the road to new Clause 18. Next week when we debate the White Paper on inflation we shall be considering measures which will cause many people to change their jobs and perhaps even lose them. I should be surprised if it were suggested that we should introduce an allowance to cover people whose employment is disturbed as a result of the White Paper proposals and the Bill which will follow. This is a bad way in which to begin a journey which in any case I do not wish to take.
§ Mr. Peter Rees (Dover and Deal)
I do not wish to consider with the Secretary of State for the Environment whether the party is over in the local government sphere, nor do I want to consider with my hon. Friend the Member for Blaby (Mr. Lawson) whether the dolce vita can be found in local government circles, in Whitehall or even, dare I say, in West-minster. Perhaps we should all be a little sensitive today on that subject. I want to defer to susceptibilities inside and outside the Chamber. This is, however, perhaps a more important new clause than might at first sight appear.
I recognise, of course, the special case which has been made with such eloquence and conviction by my right hon. Friend the Member for Crosby (Mr. Page), who spoke with peculiar authority on this point, but may I say to him and to those directly affected in local government that there are others in many walks of life who have been affected, directly or indirectly, by the decision we have taken, or at least sanctioned, in this House. I refer, for example, to those whose careers in the Armed Services may have been prematurely cut short. They do not always engender quite the same sympathy on the Labour benches as they engender outside.
I have encountered people who have had the expectation of another 10, 15 or 20 years in the Services, and perhaps even longer, and who may have bought a house in Portsmouth, Aldershot or Gosport, close to the Army or the Navy, and have suddenly found their careers come to an end. A modest measure of compensation may have been paid to 1570 them—it is not sufficient in my opinion—and they may see their pension diminish in real terms. They may find it impossible to secure employment commensurate with their talent and experience in the area where they have bought a house, and they are then faced with the possibility of selling the house and perhaps losing money in the process, or of having to travel a considerable distance to their work. Admittedly they were given no specific assurance such as was given to those likely to be affected in local government, but their case exhibits the same point of principle.
In the private sector there will be many affected by recent economic measures who could claim with a certain justification, though perhaps not the same justification, that they too have been affected by measures that we have approved, encouraged and supported in this House. They, too, may be looking, in circumstances of considerable economic severity, for further employment and may have to travel a considerable distance to work.
It has long been said—it is always in the Treasury brief; whether it be thrust into the hands of a member of a Conservative or a Socialist administration, I suspect that the brief has always read the same way—that it is a matter of personal choice where a person lives, and that it would be quite wrong, in the cant phrase, to subsidise some people at the expense of the general taxpayer. I have never found that argument entirely an appealing one. I notice the Minister of State looking anxiously at his brief. Perhaps the very same words appear in it this afternoon. It is not for me to anticipate what he may say to the House if he catches your eye, Mr. Deputy Speaker.
The time has come when the whole question of personal allowances, reliefs and deductions should be re-examined. Life today is not what it was in 1920 when the time-hallowed principles were first involved in Somerset House. We wish to encourage mobility of labour. We wish to encourage people to buy and own their own houses. The cost of travelling has soared and will continue to increase. I need not remind the House of the level to which railway fares may rise in the autumn.
1571 Against the altered economic and social background, the time has come to consider whether there should not be some kind of reduction or relief for taxpayers in this category. I certainly do not want to prejudge the issue but I wish to suggest to the occupants of the Treasury Front Bench that before they dismiss this new clause, if that is what they are proposing to do, with the time-honoured cliché that is trotted out in this kind of debate, they ought to think again and, if they cannot accept this precise new clause, promise to re-examine the whole principle. If they could do that, I would look with more favour than I would otherwise be prone to do on their efforts in this field. Although I do not press the Treasury Ministers necessarily to accept this particular new clause, I should be happy if they undertook to conduct a general review of this kind of problem since it affects not only local goverment functionaries but all who have suffered over the past few years.
§ Mr. John MacGregor (Norfolk, South)
I, too, am unhappy about the new clause, first on the fairly narrow point that as far as I can see no attempt is made to distinguish in it between payments which cover the additional cost of travel to work beyond what it was before reorganisation and payments for the whole cost of travel to work. I recognise that some local authorities are making payments only for the additional cost of travel to work, in which case the new clause might be fair, but there might well be other authorities which will make payments for the total cost of travel to work and therefore, under the terms of the new clause, local authority employees would find themselves better off under this arrangement than they were before reorganisation.
My main objection, despite the remarks of my right hon. Friend the Member for Crosby (Mr. Page), is that this involves a discrimination in favour of the public sector against the private sector which it seems wrong to introduce at this time. I would tell the hon. Member for Goole (Dr. Marshall) that many people in commercial organisations and industrial concerns have had to move through no fault of their own, perhaps because their firm has decided to move from an outer London area to places like Ipswich or Norwich, where admittedly arrangements 1572 are offered to enable employees to change to a new place of residence.
Nevertheless in that case too, as the hon. Member for Goole has said, there will be some who for family, school and other reasons will wish to stay in the same place. There would, therefore, be discrimination between the public and the private sectors. I would tell my right hon. Friend the Member for Crosby that in many cases the work of those people is the same as that of local authority employees. That is an argument which my right hon. Friend advanced in favour of this particular exception for the latter category. In many cases, where people have to make a change they are not given payment by their firm to cover the extra cost of travelling to work. Therefore, discrimination is involved.
I have considerable sympathy for all who are finding the burden of travelling to work, particularly in rural areas, increasingly heavy. We have debated a number of amendments in the past to deal with this and there is again a new clause on the Paper to deal with it. I recognise the difficulties of getting the right arrangement, and I hope that in future Finance Bills we can seek to do so. I would find it difficult, however, to justify to my constituents that this is the right way to start to deal with the problem. Many people not in local government who face exactly the same problems would wonder why public employees should get this beneficial treatment when they themselves do not. There is one particular group of people who have had to change their place of work, not because their firm has changed its location but because, sometimes as a result of Acts that we have passed—perhaps because of one clause in this Finance Bill, the provision for 25 per cent. VAT—they have found that their employment has ceased.
Living in rural areas, they may be having to make journeys of up to 60 miles to find alternative employment. In view of the fact that they have no choice their jobs having vanished because of a downturn in, for example, the television sector, they have no choice and would find it strange that local authority employees should get beneficial treatment whereas they, themselves, having to make journeys by car of 60 or 70 miles, have to do so out of taxed income.
1573 Although there is a good case for looking at the problems of travel costs, especially in rural areas, to see whether some tax relief can be given, it is very difficult to start making that case in relation to one group of people alone.
§ 6.30 p.m.
§ Mr. Tony Durant (Reading, North)
I wish to intervene in this short debate because I have put down on the Paper an amendment, new Clause 18, which has not been selected for debate but which gives me cause to speak against the amendment proposed by the hon. Member for Goole (Dr. Marshall). His clause, I believe, is much too narrow. I do not see why local government should be regarded as unique in this situation. There have been many Acts of Parliament which have resulted in people having to travel long distances. Therefore, I do not support the hon. Member for Goole or my right hon. Friend the Member for Crosby (Mr. Page).
I put down my amendment because I represent a constituency that has been badly affected by recent railway fare increases; and my constituents are fearful of further such increases. My hon. and learned Friend the Member for Dover and Deal (Mr. Rees) said we shall eventually have to consider some form of tax relief for travel to work expense because it is becoming an enormous part of people's outgoings. In some cases it is almost as much now as the mortgage interest. It is a toss up which is the larger outgoing. That is a problem which must be considered. Bearing that in mind, I put down new Clause 18.
I oppose this new clause. It would create bad feeling among a large number of people who are now feeling the pinch of the cost of travel to work, which is becoming such an enormous part of the family budget.
§ The Minister of State, Treasury (Mr. Denzil Davies)
I thank my hon. Friend the Member for Goole (Dr. Marshall) for his kind remarks at the beginning of his speech and for reminding us of the long and happy hours spent in Committee on the legislation to reorganise local government. With respect, I am not sure whether the time we spent on that reorganisation was productive. Having seen how that reorganisation has turned 1574 out I have considerable doubts and reservations about it.
The right hon. Member for Crosby (Mr. Page) made an extraordinary speech. He reminded the Committee that the origin of these payments was to be found in the Local Government Act. He said that this Government were breaching an undertaking which we gave to the Committee. That is out of character of the way he normally speaks. The allegation is untrue. He must have known that the law of the land at that time was clear. Payments made to reimburse employees for these expenses are taxable. Conversely, employees cannot, when computing their tax liability, deduct the cost of travelling to work. That was the law when the Local Government Act was passed, and for a long time before that. He said that an undertaking was given that the payment of expenses would not be subject to tax. I suggest that that is putting the case rather strongly.
If the right hon. Gentleman had wanted those payments to be tax free the Government of the day could have moved an amendment or a new clause to the Finance Bill at that time to ensure that that happened. No undertaking could have been given which would have overridden the law or the tax position. I am surprised that the right hon. Gentleman made that point.
§ Mr. Tony Newton (Braintree)
Although I am a new arrival to the debate I wish to say that the point made by the Minister seems to contradict the other points made in Committee about extra statutory concessions—for example, on cash payments to miners in lieu of coal. If that can be dealt with as an extra statutory concession why cannot my right hon. Friend's point be dealt with in that way?
§ Mr. Davies
The hon. Gentleman has just come into the debate. I suggest that he listens before making such contributions.
The law on taxation of travel expenses was not overridden by the Local Government Act 1972. No undertaking could have been given in those debates to override the law, and it is wrong to suggest that the Government are going back on an undertaking when the Revenue is applying the law of the land.
1575 I take issue with my hon. Friend the Member for Goole and my hon. Friend the Member for Coventry, South-East (Mr. Wilson), who said that there is injustice to local government workers. There is no injustice. They have been treated in the same way as other employees who have similarly suffered.
The point was made that other employees also suffer. I remember the years between 1966 and 1970 when, as a result of Government policy, the coal mines in my constituency were closed. Miners had to travel longer distances to the remaining pits which were working. They had to bear the cost of travel. If they had been reimbursed for it they would have been taxed on the sums which they received. In the same way, factories can close as a result of rationalisation.
I do not think that a case has been made for this proposed change. If we give relief in this case, we must do the same in numerous others. I refer to people who live out of London, who cannot afford to live in the city, and who travel long distances. If we concede the one we must concede other cases.
I accept that there is a general problem here and that there are difficulties. However, when we look at the wider area we must try to frame legislation to mitigate some of the problems. In that case, we shall find ourselves in greater difficulties. We do not want to give relief to people who chose to live far away, who can afford to travel to work, and who do not need any assistance. I do not think that the discussion on this clause affords the right opportunity to alter the matter.
The original order introducing this concession for local authority employees was meant to last for three years. As a result of representations, I understand that the national joint council has now agreed that the payment of these expenses to employees by local authorities should be extended for a further year. I should not like to say in the presence of the Chief Secretary that that has anything to do with the taxation position. I am sure that it is coincidental. Although that concession has nothing to do with the tax position, there will be an additional benefit. The intention was that the order and the reimbursement should extend for three years.
§ Mr. Peter Rees
I should like to take the Minister back to the principle which he adumbrated. Under the German fiscal system relief is given for travel to work. Now that we have affirmed our adherence to the Common Market the Minister may feel that we might attempt the harmonisation of our tax systems.
§ Mr. Davies
The hon. and learned Gentleman is an expert on the English and German fiscal systems. I commend that. I know nothing about the German fiscal system. I concede that the cost of travelling to work is a substantial burden for thousands of people. However, if we tried to frame tax legislation to afford relief to those people we should find ourselves in considerable difficulties. Despite the fact that the Germans may in theory have found a way out, I think that if we tried to frame legislation we should encounter even more difficulties.
§ Mr. Graham Page
An exception was made for local government servants. The House passed an order saying that they should be reimbursed for these expenses. To that extent they have been recognised in law and by the House as being in an exceptional position. The hon. Member for Goole (Dr. Marshall) said that those people are losing as those expenses are taxed.
§ Mr. Davies
Those people are now receiving benefit which is often denied to other employees who suffer from acts over which they have no control. Those people receive a benefit. I find it extraordinary that we are now being asked to alter our taxation laws so that they receive an additional benefit. A case has not been made out for that additional benefit. I think that we would encounter other difficulties with other worthy groups if we did that.
I therefore ask my hon. Friend to withdraw his new clause as a result of listening to this debate, and to accept that the benefit will be extended for another year.
§ Question, That the clause be read a Second time, put and negatived.