Finance Bill

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Mr. Field: Reluctant as I am to engage in too much more special pleading—there has been some from all parts of the UK—a concern in central London is the potential impact of the congestion charge from next April. I want to understand some of the thinking behind the clause where it refers simply to ''public transport bus services''. Was any thought given to including private transport bus services, those that are employer-subsidised for large numbers of employees who have to go from one part of town to another? [Interruption.] They will all be included. I am glad that they have been covered.

I return to the comments of my hon. Friend the Member for Arundel and South Downs. It strikes me that, to a large extent, given the environmental concerns that perhaps underlie some of the Government's thinking, buses can be among the worst offenders. It would be unwise, given the burgeoning growth in tramways, to exclude trams, if not trains, from the provisions of the clause.

Rob Marris: I echo the comments made about tram services. There is an excellent tramway in my constituency, and I seek the Government's reassurance that they will look at trams as well as buses.

The Financial Secretary to the Treasury (Mr. Paul Boateng): The brevity of that contribution was a relief. I say that because my hon. Friend is not only a former solicitor with Thompsons—there could not be a more distinguished firm—but is also a former bus driver. I was expecting that Ted was either about to take a bus or subsidise his employee. I did not want to fall victim to Ted in quite the same way that my hon. Friend the Paymaster General almost did.

Leaving Ted aside for the duration, the measure will allow employers to subsidise local bus services that are used by their employees to get to work, knowing that they can enjoy free or reduced-price travel, tax-free. As several hon. Members will know, it is a continuation of a process that began last year of encouraging a form of behavioural change. The hon. Member for Cities of London and Westminster made a specific point about bus services provided by employers. We are going further this year to encourage people to adopt what I believe Members of all parties agree is a desirable behaviour change, which will promote sound environmental objectives.

The hon. Member for Southport, who has just joined us, is much too modest about his own abilities in this area—he knows a great deal about the subject. I have been cross-examined by him in an appearance before the Transport Sub-Committee. I would be the first to concede to him that the measure is modest. As

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I said earlier, it is a continuation of a process. Measures in previous Finance Bills have included, for instance, tax-free cyclists' breakfasts on cycle-to-work days, which was an even more modest assistance in changing behaviour, and tax-free lunchtime use of works buses—again, a modest contribution to changing behaviour and promoting good, sound environmental objectives. This measure is another step forward.

The tax exemption is limited to local stopping bus services. We believe that that is the most cost-effective way to benefit the majority of bus commuters, and there will be knock-on benefits to local residents who use the same routes. They are likely to be better served by more regular buses and, possibly, extra stops. The right hon. Member for Fylde, one of my predecessors as Financial Secretary, gave an example from his constituency of someone who started their journey on a tram and ended it on a bus. It is perfectly true that, unlike subsidy of buses, subsidy of trams will not attract the relief under the provision. Indeed, the provision is further limited in that the bus must provide a local bus service as defined by the Transport Act 1985. It must be available to the general public at separate fares. In the right hon. Gentleman's example, it would have to stop at least every 15 miles, so one could not get off a tram and get on a bus that went for 20 miles. That would be outside the definition.

Mr. Jack: As usual, the Financial Secretary is giving us a clear and eloquent explanation for the move that the Government want to make. However, the tramway between Blackpool and Fleetwood meets the criteria that he has already enunciated and provides, in terms of a local stopping service, a parallel service to a bus operation because the road runs parallel to it. The man on the tram gets no help, but the man on the bus does. What is the logic?

4.30 pm

Mr. Boateng: I actually got that point, and I am about to come to it. I am afraid that I am not particularly familiar with the right hon. Gentleman's constituency, but I think that most Committee members have been to Blackpool and are quite familiar with Blackpool trams. I am familiar with the one that now runs on in the way that the right hon. Gentleman describes. I would be the first to accept that the measure currently does not apply to such tramways. Let me continue the explanation of how we came to the measure before dealing with the interesting point that he and several hon. Members have raised. It is worth examining in some detail.

The measure was recommended by an academic team that carried out research on tax incentives for encouraging green travel to work. We undertook careful research before deciding that the tax exemption was a worthwhile measure. We commissioned professional researchers to interview about 2,000 employers. The Revenue had a consultation document on its website, which the hon. Member for Kingston and Surbiton might have seen in his surfing of the net. In the assiduous way that the hon. Gentleman speaks on such matters—

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Mr. Davey: On all matters.

Mr. Boateng: It does feel like that, Mr. Gale, but there you are. It takes all sorts. The hon. Member for Kingston and Surbiton may have come across the website in his surfing, and may have given us the benefit—at some length, no doubt—of his views.

What we found was that interested parties, having been given an opportunity to contribute, supported the measure. More than 50 individuals and organisations replied. The extended tax exemption is another modest, but important, step in our fight against congestion and traffic pollution. It will encourage employees to leave their cars at home. It will encourage employers to take advantage of the opportunity provided to make a real contribution not only to the environment, but the welfare of their employees and the immediate local community.

There is a point, which I think is sound and valid, that as we take such matters forward in a modest and incremental way, we should consider other forms of transport. I am perfectly willing to do so, having listened very carefully to the contributions made by my hon. Friends the Members for Wolverhampton, South-West and for Wimbledon in particular. They follow their constituents very closely in those matters. I am particularly persuaded by them that it would be right for us to look at the proposal and see whether there is scope to take it forward.

I hope that, with that assurance, hon. Members of all parties will give the clause a fair wind.

Question put and agreed to.

Clause 33 ordered to stand part of the Bill.

The Chairman: In accordance with the order of consideration, we now come to clause 36, and will return to clause 34 afterwards.

Clause 36

Exemption of minor benefits: application to non-cash vouchers

Question proposed, That the clause stand part of the Bill.

Mr. Peter Luff (Mid-Worcestershire): I had not intended to speak to the clause, but I wondered whether the Financial Secretary might tell me what it is about. The explanatory notes on the clause are not particularly explanatory. The summary begins,

''This clause'' and is followed by a series of sentences describing the clause. Under the heading, ''Details of the clause'', is written:

    ''Subsection (1) adds a new subsection (3) to section 155ZB.''

That is the same wording as is in the summary, and both paraphrase the clause itself.

Mr. Davey: Simplification.

Mr. Luff: I hear the word ''simplification.'' Yesterday, or the day before, we voted in the House to rename the Joint Committee on Tax Simplification

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Bills the Joint Committee on Tax Law Rewrite Bills. I should like the explanatory notes to be written by Ministers in their own words.

Mr. Boateng: We shall have to get our shop stewards in on that one. Let me assist the hon. Gentleman. The clause is small and technical.

Dawn Primarolo: And perfectly formed.

Mr. Boateng: My hon. Friend the Paymaster General said ''perfectly formed'', but the hon. Member for Buckingham is not in his seat—but perhaps I am being unfair.

The clause will ensure that the exemption under the minor benefits legislation applies where a ticket or voucher is used. In the Finance Act 2000, we introduced a power to exempt from tax minor employer-provided benefits by regulation. The clause ensures that the exemption covers a situation in which to obtain the benefit the employee must show or exchange a ticket or pass, for example, for a lunchtime journey on a bus provided by an employer. Were that not necessary, the issue could be covered by regulation, but where it is necessary, there must be primary legislation.

Question put and agreed to.

Clause 36 ordered to stand part of the Bill.

Clause 34

Car fuel: calculation of cash equivalent of benefit

Mr. Flight: I beg to move amendment No. 8, in page 23, line 10, at end insert—

    'or, where expenditure on the car in question is first-year qualifying expenditure within the meaning of section 45D of the Capital Allowances Act 2001 (cars with low carbon dioxide emissions), £10,000'.

The amendment is modest. It suggests that if the Government are earnest about wanting to encourage cars that use environmentally friendly fuels, they should make a special provision as an incentive for employers and employees, so that the arithmetic that calculates car fuel benefit is based on the smaller sum of £10,000, rather than on £14,000, for cars with low carbon dioxide omissions. That is joined-up thinking to make such incentives effective.

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