HC Deb 26 January 1978 vol 942 cc1569-70
1. Mr. Ronald Atkins

asked the Chancellor of the Exchequer what recent representations he has received about the desirability of making the cost of travel to work allowable against tax.

The Minister of State, Treasury (Mr. Denzil Davies)

My right hon. Friend receives representations on this subject from time to time.

Mr. Atkins

Is my hon. Friend aware that between 60 and 70 per cent. of all car registrations are for company cars? Is there any reason why the more fortunate should enjoy tax remissions which are denied to commuters, thereby discouraging public transport and increasing the deficit which eventually has to be paid by the Exchequer?

Mr. Davies

My hon. Friend will know that when company cars are used for private purposes they are taxed and come within the tax set-up. They are not treated in that respect any differently from anybody else's expenditure on travel.

Mr. Costain

Does not the Minister appreciate the effect of the high cost of railway fares, particularly on those living in areas such as the South Coast? Does he not realise the effect that this will have on housing, which will become more and more expensive in London, because people will be unable, owing to the constant increases in railway fares, to live in the country? Cannot he make the cost of travel to work allowable against tax, in order to help the housing situation?

Mr. Davies

I fully appreciate the difficulties caused to many people by the high cost of travel to work. Surely, the difficulties are greatest in the rural areas, where there is very low economic activity. But the way to solve the problem is not through the tax system.

Mr. Corbett

Will my hon. Friend try to be a little more open-minded about this matter? Is he not aware that literally hundreds of thousands of commuters have had six fare increases in the last two years and that travel-to-work costs have gone up by about 120 per cent., although in that period earnings rose by only 30 per cent.? Will he not keep an open mind in order to see whether some help can be given in relation to some part of travel-to-work costs at the basic rate of tax?

Mr. Davies

The difficulty here is to distinguish between one kind of expenditure and another. Costs have gone up over a wide field, and I do not think that it would be right or fair to allow relief on one kind of expenditure while denying it in regard to another.

Mr. Bowden

Is the Minister aware that his replies will cause great anger among a large number of commuters? His totally unreasonable attitude in refusing to look at this matter with an open mind is disgraceful. Some of my constituents have to spend a quarter of their gross earnings on getting to and from work. Will not the Minister look at it again?