Luncheon Voucher Concession (Hansard, 3 February 1982)

§ The Earl of Kinnoull
My Lords, I beg leave to ask 1293 the Question which stands in my name on the Order Paper.

§ The Minister of State, Treasury (Lord Cockfield)
My Lords, the luncheon voucher concession is not and never has been linked to the cost of a ham sandwich.

§ The Earl of Kinnoull
My Lords, I thank my noble friend for that reply. It was unusually indigestible and stone-hearted. Is my noble friend aware that over 1 million people use luncheon vouchers every day; another 2 million people benefit from concessionary canteen lunches well in excess of value of the luncheon voucher; and there is a strong case of parity to bring this old, well-trusted and popular concession up from 15p to £1?

§ Lord Cockfield
My Lords, I entirely appreciate the arguments that my noble friend advances. I can assure him that we give careful consideration to all the suggestions which are made in connection with the Budget. Nevertheless, I think that I would be misleading him if I were to give him the impression that the line which has been taken so consistently by so many Chancellors over so many years is likely to be changed in the next few weeks.

Lord Bruce of Donington
My Lords, is the noble Lord aware that when it comes to Customs and Excise duty the Treasury always put forward as a reason for introducing the invariable upward changes the ground that they have to keep pace with the rate of inflation? Is there not a very good case indeed for reviewing the position here? Will the noble Lord also bear in mind that those whose good fortune it is to be directors of companies, or even higher executives of companies, can obtain much more luxurious lunches than are covered by a luncheon voucher, in the boardrooms or restaurants carried on by their companies, and that these are obtained not only free of charge but free of any taxation upon the benefit that might be likely to ensure?

§ Lord Cockfield
My Lords, I must say that I am surprised to find the noble Lord not only supporting but advocating the expansion of large tax-free benefits to people in the upper income groups; but the contrary policy has been followed by successive Governments—not just this Government but their predecessor as well—and that policy has been to encourage people to pay remuneration in cash rather than in kind. I entirely agree that the luncheon voucher concession is not a very large matter. Nevertheless, to increase it would be to move contrary to the general policy which has been followed in this field.

§ Lord Boyd-Carpenter
My Lords, but is it not the fact that the luncheon voucher was introduced to give 1294 some help to workers in small concerns, as distinct from those in large concerns who enjoyed subsidised canteen facilities? Is not retaining the luncheon voucher at what is today a ridiculous figure tending to discriminate rather harshly against people who, on the whole, are in the lower incomes group, working for the smaller companies?

§ Lord Cockfield
No, my Lords, I do not think it is right to draw the conclusion that my noble friend does. The great majority of people have access to neither luncheon vouchers nor to subsidised canteens.

§ Lord Robbins
My Lords, would not the noble Lord agree with me that the principle involved is the principle of the reduction of inflation? Perhaps he might tell the House how soon it would be, at present rates of inflation, before the luncheon voucher buys half what it does at the present time.

§ Lord Cockfield
My Lords, while I am grateful to the noble Lord for the point that he makes, we have enough difficulty in dealing with the present value of the luncheon voucher without speculating on what its value might he in a few years' time.

§ Baroness Gardner of Parkes
My Lords, could the noble Lord the Minister comment on whether or not he is aware that the small firms are kept very strictly to the 15p per day luncheon voucher while many larger firms give vouchers greatly in excess of that to their employees? Although this is meant to be declared and one is meant to pay tax on an amount above a weekly total of 75p, every person of whom I have asked this question—and I have been following the matter for some time—tells me that in the big companies it is just more or less " lost ", and in the smaller companies it is strictly enforced as a precise amount of 15p per day.

§ Lord Cockfield
My Lords, I would not accept the view that there is a difference between large companies and small companies on this matter. It is open, as my noble friend suggests, to any company to give any amount of luncheon vouchers they wish. The tax concession relates to the first 15p of the voucher, irrespective of the amount. The PAYE records of companies, both large and small, are audited by the Inland Revenue, and if they find a failure to make proper returns they of course pursue the matter.

§ Lord Kaldor
My Lords, am I wrong in thinking that the expense incurred in maintaining a boardroom for catering purposes for members of the board is a legitimate business expense from the point of view of corporation tax, and that beneficiaries of the food provided there are not taxed on benefits in kind on their consumption?

§ Lord Cockfield
My Lords, the allowance for corporation tax purposes for the cost of meals supplied is subject to certain limitations which are written into the Act. Where those limitations are satisfied, the cost is not charged on to the individual any more than is the 15p of the luncheon voucher.