§ 3.25 p.m.
§ The Question was as follows:
§ To ask Her Majesty's Government in what circumstances it is permissible for an employed person to charge against taxable income the cost of transport to and from his place of employment.
1148§ Lord JACQUESMy Lords, in general the cost to an employee of travelling to and from his normal place of work is not allowable as a deduction for tax purposes because this is a personal expense. Special considerations arise where there is more than one place of work, but each case has to be considered on its own facts.
§ Lord HALEMy Lords, is the noble Lord aware of the contents of a recent survey which show that the upper income bracket pay virtually nothing in fares, which is charged to the Government—and indeed charged often in to to not merely as against income tax—while on his own Answer it is the lower paid employee, and the lower middle class, who are being called upon time after time to bear this constantly increasing burden? Finally, is he aware that British Rail are already giving publicity to indicate that these increases will not meet their expenses in full, and indicating that further fare applications are on the way?
§ Lord JACQUESMy Lords, I think it must be appreciated that when someone in a high position within a firm or company uses the company's car then he is liable to tax on the personal use of that car, and that includes transport from his home to his place of work. Secondly, I wonder whether my noble friend appreciates that if there was an allowance for transport between home and place of work, then the allowance would be given at the highest rate paid by the taxpayer, so that those with the greatest wealth would get the greatest relief and those with the lowest wealth would get the smallest relief, and that is a policy which would be inconsistent with the general policy of Her Majesty's Government.
Lord HATLSHAM of SAINT MARYLEBONEMy Lords, I am not asking the noble Lord to anticipate his right honourable friend's Budget, which is imminent, but does the noble Lord agree that really the personal allowances, in the light of recent inflation, have become much too small, and that the right way to deal with this particular problem is to increase the Personal allowance across the board at the bottom?
§ Lord JACQUESMy Lods, I am quite sure that that is a better way of dealing with it than what is suggested in the Question.
§ Lord GAINFORDMy Lords, may I ask whether the Government can possibly give some encouragement in these matters to people of modest income and in important industries such as the building trades, particularly in connection with their travel? I ask this question based on personal knowledge of men in the building trade who often have to travel vast distances to get to their place of work.
§ Lord JACQUESMy Lords, that is another question, but my experience of the building trade is that the employer usually bears the cost when the transport is at a considerable distance and much further than the headquarters or local depot of the particular firm. The cost in general seems to fall upon the employer rather than the individual worker
The Earl of GOWRIEMy Lords, is the noble Lord aware that he has not, in my opinion, very satisfactorily answered my noble and learned friend Lord Hailsham? In view of the fact that Public sector inflation has put up both railway fares and taxes while controlling salary increases, would it not now be only fair if railway costs were allowable against tax?
§ Lord JACQUESMy Lords, I cannot anticipate the Budget. I can only repeat what I said formerly, that the proposal of the noble and learned Lord for an increase of personal allowances is much better than the proposal underlying the Question. I cannot take it beyond that.
§ Lord HALEMy Lords, is the noble Lord aware that the Question does not make any suggestion whatever as to the type of action which is best suited for meeting a very substantial grievance, and an increasing burden on those who travel to and from work? There is no suggestion of any kind that the question of income tax allowances, or indeed the question of exemption of incomes to a certain figure, which I very much prefer, are matters for consideration before the Budget. Would the noble Lord bear in mind that the suburban services are getting virtually no improvements, no benefits, no planning, yet are bearing a very high share of the burden?
§ Lord JACQUESMy Lords, my noble friend has referred to a number of factors which my right honourable 1150 friend will take into account when determining his Budget.
Lord WALLACE of COSLANYMy Lords, will my noble friend send a copy of our Hansard to his right honourable friend so that he may fully understand the points of view which have been expressed on this vital social issue?
§ Lord JACQUESI am quite willing to do what my noble friend suggests, my Lords, but I am sure that my right honourable friend is fully acquainted with the kind of lobby to which we have been listening this afternoon.