HL Deb 18 February 1975 vol 357 cc161-3

2.48 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is the maximum value of luncheon vouchers permitted by the Inland Revenue without income tax liability; and when this value was last reviewed.


My Lords, luncheon vouchers issued to employees are not taxed provided their value does not exceed 15p for each working day. This extra-statutory concession is kept under constant review.


My Lords, I thank the noble Lord for that reply. May I ask whether he is aware that the amount was last reviewed in 1948, and has he any idea by how much the cost of luncheons has increased since that date? Is he further aware that in France the limit is 50p a day and in Sweden is 68p a day?


My Lords, first, the noble Lord is, I think, inaccurate when he says that, the amount was last reviewed in 1948. As I said, it is under constant review, and the fact that there has been no change does not mean that it has not been reviewed. In any case, it was particularly reviewed in January 1959 by the then Chancellor of the Exchequer—the noble Viscount, Lord Amory as he now is—who gave it formal basis. I would also refer the noble Lord to an Answer to a similar Question which was given by my right honourable friend in the other place on 14th November 1974, at column 185, when he said that an increase in the amount of tax allowance on luncheon vouchers was, in his opinion, not justified.


My Lords, if the noble Lord has 15p, will he take it out into the City of Westminster and see exactly what he can buy for 15p—and then come back and report to the House?


My Lords, I have no need to go out. I know what 15p will buy. There is a complete misconception here. The luncheon voucher allowance of 15p was never intended to cover the cost of the meal. The facts are these. Some employers had canteens and they subsidised them to some extent. It was intended that the tax allowance of up to 15p should cover the subsidy which the employee did not get because there was no canteen. That was the intention of the allowance. It is our information that the average subsidy does not greatly exceed the present 15p.


My Lords, is my noble friend aware, as he will be if he has read the paragraphs in The Times newspaper, in the Daily Telegraph and in reputable newspaper organs, of the many luncheons; and dinners provided out of the Government's hospitality fund for Ministers and ex-Ministers—although have never been invited to one—and for innumerable civil servants who receive very good luncheons, according to what I hear? Would he ask his right honourable friend the Chancellor of the Exchequer to turn his attention to the possibility of raising revenue from that source?


My Lords, I think that, obviously, that is quite another question.


My Lords, does the noble Lord not appreciate that when luncheon vouchers were first fixed at this sum, it was quite possible to buy a two-course hot lunch for what was then three shillings?


Yes, my Lords, I understand that; but it was not the intention to cover the cost of the meal. The intention was to cover the hidden subsidy of the employer with a canteen. In our view, it still covers it.


Would not the Minister agree that the inflation rate in France is considerably less than in this country? If the value of a luncheon voucher has been fixed at 50p over there, are there not reasons—the noble Lord the Leader of the House shakes his head —for a review to be considered, taking into account the cost of living in France and here and the lesser inflation rate in France compared to that here?


My Lords, it is not a question of the cost of living or of inflation. The question is whether French employers subsidise canteens more than do British employers. If so, then the French would be justified in making a higher allowance for luncheon vouchers.


My Lords, is the Minister aware that the Tory Party, when in power from 1970 to 1974, did not look at this issue? Why do they cry now?

The Earl of ONSLOW

My Lords, does the noble Lord know the difference in value between 15p when it was finally fixed in 1959, and its value now?

The LORD PRTVY SEAL (Lord Shepherd)

My Lords, I think that the noble Lord is pursuing a point which has been effectively dealt with; and I suggest that we now move to another Question.