Brown is urged to lift travel pass tax

Dec 11 2006 By Ross Smith, The Journal

Chancellor Gordon Brown has agreed to hold talks with a North MP which could lead to tax breaks for commuters who use public transport.

Tyne Bridge MP David Clelland is calling on Mr Brown to stop counting travel passes offered by bosses to their staff as a taxable benefit.

If the Chancellor agrees, it could see tax abolished on the £1m-worth of corporate Metro saver passes bought through North-East companies and public sector organisations each year.

His move was welcomed last night by leaders of the Go For Jobs campaign, as it could play a big role in encouraging workers in the region to use public transport.

That could cut road congestion and so make it easier for companies to see their developments accepted rather than blocked by the Highways Agency.

Mr Clelland said: "Giving employees travel passes to travel to work on public transport is helping the environment and congestion, so to tax it is a nonsense."

His call follows Mr Brown's pre-budget statement, in which he attempted to establish green credentials by increasing duty on petrol and air travel, and declared his commitment to "modern roads and rail".

Despite the tax on bus, train or Metro passes, companies can give staff free car park spaces without affecting their income tax status.

Mike Parker, spokesman for the North-East Chamber of Commerce, which has led Go For Jobs alongside The Journal, said: "I think it's an eminently sensible idea. If Gordon Brown is serious about the environment and transport initiatives he discussed in the pre-budget report, that would be a really good first step to encouraging employers and employees to think more closely about how they get to work." Richard Hibbert, who is leading the People in Motion research project into congestion in Tyne and Wear under the Government's Transport Innovation Fund, said: "It's a complete and utter inconsistency that a travel pass issued through work is a taxable benefit and a free parking space isn't.

"We routinely get into difficult discussions with employers over the fact that that's the Inland Revenue's view on this matter."

Huw Lewis, spokesman for Tyne and Wear public transport body Nexus, said: "We have long considered this an anomaly that disadvantages public transport users and we are pleased that Mr Clelland is raising this with the Chancellor."