CYCLES AND CYCLIST'S SAFETY EQUIPMENT (Hansard, 6 July 1999)

§ Ms Hewitt
I beg to move amendment No. 13, in page 27, line 1, leave out from 'to' to end of line 3 and insert 'the condition that the employee must use the cycle or safety equipment mainly for qualifying journeys.'. While the House is in a happy mood of consensus on environmental objectives—which was far less obvious in our earlier debate on the fuel duty escalator—let us turn to 873 amendment No. 13, which again simplifies the provisions relating to tax relief for cycling, which is another part of our green transport package.
The amendment replaces the requirement that the tax exemption is available only if there is substantial compliance with the condition that the employee must use the cycle or safety equipment only for qualifying journeys with the condition that the equipment is used "mainly" for qualifying—that is, home-to-work—journeys. In other words, it does for bicycles what the previous group of amendments did for works buses. As I explained in Committee, there is no intention to withdraw the relief if the employee also uses the bike for private or leisure use. Provided that the bike is mainly used for the commuting journey, the tax exemption will remain. Of course, employers will not be expected to check up on their employees' other cycling journeys.
In Committee, concern was expressed—notably by the hon. Member for Maldon and East Chelmsford (Mr. Whittingdale), who has since been translated into the Trappist position of Parliamentary Private Secretary to the Leader of the Opposition—about the apparently restrictive nature of the "substantial compliance … only" wording. Similar concern was expressed about the works bus exemption in clause 45. In the light of our amendments to clause 45, we thought that it would be helpful and welcome if we made a similar change to clause 47, to replace the "substantial compliance … only" formulation with a main-use test. That is what amendment No. 13 would achieve.
On the subject of green transport plans in general, I emphasise that Her Majesty's Treasury does, indeed, have a green transport plan. It encourages employees to use bikes and buses to get to work, and the proof of its success is demonstrated by the number of bike parks used within the Treasury building.
I commend the amendment to the House, in the certainty that it, too, will meet with an unreserved welcome.

§ Mr. Flight
I support the amendment and, indeed, clause 47. As has been pointed out, the amendment applies similar common sense and fairness to cycling as the previous amendments did to bus transport. I cannot resist commenting that my hon. Friend the Member for West Dorset (Mr. Letwin) could not have spoken on this amendment without declaring an interest as a regular cyclist.

§ Mr. Oliver Heald (North-East Hertfordshire)
Does my hon. Friend think that it is rather shocking that, on such an important green issue, not a single Liberal Democrat is present?

§ Mr. Flight
They have clearly got on their bikes.
Interestingly, this measure will be used mostly in towns, whereas those that apply to buses will be most used in rural areas. It will be interesting to note to what extent the provision encourages bicycle transport in towns, because it amounts to a considerable tax perk. Companies will be able—as a result of the amendment, without too many strings attached—to give people 874 bicycles on which to travel to work and to use privately. That may lead to a substantial increase in cycle transport in cities.
Not having looked up the definition of a cycle, I wonder whether the measure will be wholly limited to pedal-driven vehicles, or whether it will cover any degree of petrol usage, as might pertain to the French velocette. I suspect that the former will be the case. We support the amendment and the clause, and are grateful to the Government for introducing it.

§ Mr. Healey
I, too, welcome the amendment. It improves a clause that is already innovative and an important departure from the past. The amendment loosens and improves the definition for tax-exemption purposes of what counts as bicycle use. My hon. Friend the Economic Secretary will be aware that the all-party cycling group, which is so ably chaired by my hon. Friend the Member for Exeter (Mr. Bradshaw), has pressed this point. I believe that it will very much welcome the amendment, which represents a more realistic reflection of the way in which people use bicycles, and will do much to encourage more people to take advantage of the tax break.
I spent 10 years working in London without ever using the tube. I went everywhere on an old, sit-up-and-beg, single-speed boneshaker with rod brakes, which was worth a tenner, and would therefore not have benefited from the tax relief on capital cost under the clause. I used that bicycle for many non-standard work journeys—from C to D to E to F throughout central London—rather than just for the A to B, home-to-work journey every day. Will such use be covered by the provision as amended?
I shall leave my hon. Friend the Economic Secretary with a point made by my hon. Friend the Member for Wimbledon (Mr. Casale) in Committee. If the measure is to have the intended impact, people must know about it. I urge my hon. Friend the Economic Secretary and her colleagues in government to give serious thought to promoting this important and innovative tax change.

§ Mr. Nicholas Winterton
I rise not as a dissenting voice in the harmony across the Chamber, but merely to solicit some information.
My hon. Friend the Member for Arundel and South Downs (Mr. Flight) was, as ever, gracious in the way in which he responded to the Economic Secretary, but he did not ask the question which I thought he was about to ask. I am aware that some pedal bicycles are fitted with a small auxiliary petrol engine, which can be incorporated into the pedal power of the cycle when an adverse gradient is encountered. I do not know whether such a mechanism automatically switches on or whether the rider must activate it.

§ Mr. Healey
rose—

§ Mr. Winterton
I am very happy to give way to the hon. Gentleman, who knows far more about these things than I.

§ Mr. Healey
Perhaps I can help the hon. Gentleman. He is referring to what in France is called the velosolex, to which the hon. Member for Arundel and South Downs (Mr. Flight) referred. It is activated with a lever and a clip. When one wants to lower the engine on to the wheel, one does so manually.

§ Mr. Winterton
It is at times like this that the House is at its most informative and helpful. I thought that my 875 hon. Friend the Member for Arundel and South Downs, whose knowledge on matters financial I respect, was about to ask whether such a pedal cycle would be included under the amendment. I hope that the Economic Secretary is listening; as ever in this House, I am trying to be helpful. Is the hon. Lady listening?

§ Ms Hewitt
Yes.

§ Mr. Winterton
Can the hon. Lady give me an answer to the question whether such cycles will be covered under the amendment which she so articulately and courteously moved? I see that those in the Box have quickly provided the answer—at least I hope they have.

§ Ms Hewitt
I must confess that I had not anticipated a debate about the meaning of the word bicycle, but clearly I should have done so. Perhaps it would assist if I drew attention to section 192 of the Road Traffic Act 1988, in which a cycle is defined as a bicycle, a tricycle, or a cycle having four or more wheels, not being in any case a motor vehicle". Therefore, I must disappoint the hon. Member for Arundel and South Downs (Mr. Flight) on the issue of velocettes or whatever. A bicycle that is powered by a motor would not qualify under the definition in the 1988 Act. Should the single market in power-driven bicycles take off, this is no doubt a matter to which we will return in a future Finance Bill debate.
My hon. Friend the Member for Wentworth (Mr. Healey) raised the question of non-standard journeys. Perhaps I can reassure him that, so long as the journey or any combination or element of it is related to work, the benefit from the cycle will not be taxable and the exemption will indeed apply. My hon. Friend also rightly raised the issue of publicising the tax exemptions that we are giving to green transport plans. We shall certainly be working with green organisations and cycling bodies particularly, as well as with employers' and employees' organisations, to ensure that people receive full information and are encouraged to take advantage of the exemptions.
The hon. Member for Arundel and South Downs referred in our earlier debates to the flourishing mushroom factory in his constituency. Perhaps I may be forgiven for saying that we hope that as a result of this package, green transport plans will also mushroom.