HC Deb 24 March 1977 vol 928 cc1444-7
3. Mr. Channon

asked the Chancellor of the Exchequer if, in framing his forthcoming Budget, he will take into consideration the increasing cost of rail fares and the need to give some assistance to rail commuters; if he will study the tax relief that is provided in other countries; and if he will make a statement.

Mr. Robert Sheldon

I am aware of the considerations to which the hon. Member draws attention, but I do not think that it would be right to single out this particular form of personal expenditure for tax relief.

Mr. Channon

Is the right hon. Gentleman aware that fares have risen much faster than earnings or the cost of living generally and that this has caused considerable hardship for hundreds of thousands of people? Is he further aware that there is now ample evidence that the railways are losing a great deal of revenue as a result of this? There are schemes of this sort in many other European countries. Therefore, should not the Government at least make a proper examination of this proposal so that its full costs can be ascertained, bearing in mind that if they do not do so the railways will continue to lose revenue from this source and the hardship for many people will continue?

Mr. Sheldon

I am aware of the hon. Gentleman's general point. It has been put to the Government from time to time. However, where a person lives is largely a question of personal choice and it would be wrong to expect one taxpayer to subsidise another for living in a particular area. These are matters for election by the person concerned. That is the way that all Governments have so considered they should remain.

Mr. Arthur Lewis

Is my right hon. Friend aware that there are people, with other incomes, who are getting a tax-free allowance equivalent to as much as £100 per day gross and also receiving tax-free travel allowances—which even hon. Members do not receive? Why should their Lordships be so favourably treated? Why are they allowed to get away with it while other workers by hand and brain are not? There are peers drawing an allowance which is equivalent to £100 a day gross as well as getting tax-free travel allowances.

Mr. Sheldon

I am aware of the point that my hon. Friend makes. The allowances for Members of the House of Lords are designed to cover their expenses. Those who hold directorships or who work in industry will be covered by the general tax laws, and recent legislation on benefits in kind will apply equally to them.

Mr. McCrindle

Will the right hon. Gentleman consider allowing employers who wish to do so to issue vouchers to assist their employees to travel to and from work and to allow the total cost to be offset against corporation tax, as can be done to a limited extent with luncheon vouchers?

Mr. Sheldon

Luncheon vouchers have always been in an anomalous position, and it is not intended to extend that sort of anomaly. This is a large element of discretionary expenditure and it would be wrong to complicate the tax laws to allow for it.

Mr. Noble

While it may be true that where a person lives is a matter of personal choice, is my right hon. Friend aware that it is no longer a matter of personal choice for many people where they work and that they are having to travel increasing distances because of factory closures? While there is a need to look at fares, does my right hon. Friend agree that subsidising rail but not bus fares through tax cuts or any other means would be grossly unfair to many people living in areas outside the big conurbations? Will he look at the possibility of increasing subsidies to bus undertakings?

Mr. Sheldon

My hon. Friend has rightly drawn attention to the problem of public transport. He will be aware of the considerable subsidies that are paid towards public transport. Any further elements of public expenditure must be considered in the light of our survey of public expenditure as a whole and will form part of the further investigation that is necessary before next year.

Mr. Stanbrook

Does the Minister agree that he is entirely wrong to attribute the expense of transport to work to the discretionary side of a person's activities? Is he aware that there are many other allowable expenses that are wholly, necessarily and exclusively incurred in the process of earning an income? Does not this fall within that discretion?

Mr. Sheldon

It has always been held to be difficult to assess how much of this type of expenditure is incurred on the basis of a person's own personal choice. If one made certain parts of this type of travel allowable for tax reductions, one would disturb decisions to which a person rightly comes when choosing where he wishes to reside.

Mr. Ovenden

Does my right hon. Friend detect an element of hypocrisy in the attitude of the Opposition, since they are continually calling for cuts in subsidies, including rail subsidies, while at the same time weeping crocodile tears over the fate of commuters and continuously trying to make political capital out of their suffering?

Mr. Sheldon

I am grateful to my hon. Friend for drawing attention to the chasm that exists between the Opposition's obsession with cuts in public expenditure in general and increases in certain types of public expenditure.

Mr. Burden

Although the Minister has said that this is a difficult matter, does he agree that in the last few days the Government have shown that if they put their mind to do things that at first appear difficult they are able to resolve the difficulty? Is he aware that many people in commuting areas suffer extreme hardship because of increased fares and increases in other costs such as housing? Does he agree that it is time that something was done for these deserving people, who are in the present situation principally because of the enormous cost of living imposed upon them by the Government?

Mr. Sheldon

I am grateful to the hon. Member for reminding the House that the Government have been able to resolve a number of difficulties facing the country as a whole. I look forward to the Government resolving with equal effect other economic problems that we hope to overcome as a result of certain measures.

Mrs. Bain

As regards personal choice, is the Minister aware that many people have to live in places where houses are available, particularly in view of the Government's policy of dispersing people from the inner cities to the suburbs and new towns? Will he put pressure on the Secretary of State for Transport to encourage the freezing or reduction of fares in the public transport sector in order to encourage the further use of public transport and to cut costs for commuters?

Mr. Sheldon

I take note of what the hon. Lady has said, and I hope that as a result she will be more sympathetic to the Government's problems on public expenditure than she has been during recent debates. These are problems that the Government must resolve. The general type of resolution that we have seen is an indication of our determination to fit the problem within the framework of our overall economic strategy.

Mr. Channon

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.