Mr James Clappison (Hertsmere, Conservative)

We have made good progress this morning. Clause 60 brings us to a slightly different subject. It deals with the use of buses by employers to transport employees to work, and with whether, as far as the employee is concerned, that use is a taxable benefit.

Currently, there is a tax exemption for employees travelling from home to work on an employer-provided works bus with a minimum of 12 seats. The clause reduces the minimum from 12 to nine, but we wonder why it has been fixed at that number. The Minister will no doubt say that that will help small employers, but I invite him to consider whether the limit will help all small employers and whether we cannot go further and do so. I am mindful of the fact that there are many people carriers on the road these days. Indeed, Committee members may drive them. I certainly drive one, although I hasten to add that it is not used to transport employees. Will the Minister give a nudge in the direction of employers who want to use people carriers with seating capacity for, say, eight people, to transport employees to work?

Mr Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)

The Finance Act 1999 introduced measures to encourage employers to develop travel plans that would reduce employees' use of cars to travel to work. One measure was the removal of the tax charge to employees and the national insurance charge to employers where the employer provided a bus service specifically for employees' commuting journeys. Currently, such buses must have a minimum of 12 passenger seats, but the clause extends the tax exemption to employer-provided minibuses with nine, 10 or 11.

Some Committee members will recall the lively debate about the right number that took place in the 1999 Finance Bill Committee. I think that the initial proposal was that the number should be 17. The Minister who dealt with the matter agreed, I think on Report, that the number should be reduced to 12. I think that, in Committee at that time, the right hon. Member for Fylde (Mr. Jack) proposed reductions to 10 or eight passengers, so I hope that he will particularly welcome the change. We aim to make it easier for employers of smaller work forces to include the provision of a works bus as part of a travel plan. It is already possible for small employers to join together to provide a works bus service, but we recognise that it is not always feasible to do so.

Amendment No. 13, which has not been moved, suggests that we consider vehicles with fewer seats. The tax exemption is aimed at removing the tax charge where an employer provides a works bus service. The intention is for many employees to transfer out of their own vehicles and on to a works bus for their commuting journeys.

Mr Michael Jack (Fylde, Conservative)

The Financial Secretary is talking about the behavioural changes that he hopes that major employers will make to take advantage of the proposal that he has outlined. Will he give one or two examples of what the Government have done to take advantage of it?

Mr Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)

I am afraid that I cannot give examples, although Departments have certainly drawn up green travel plans in respect of their employees. I cannot give details of their content, but if the right hon. Gentleman tables parliamentary questions on the subject, I am sure that the information will be provided. We have paid a good deal of attention to the issue in respect of our own employees as well as making helpful changes to allow other employers to do the same.

To ensure the safety of employees travelling in such vehicles, the minibuses should conform to the requirements set out in the Road Vehicles (Construction and Use) Regulations 1986. Those regulations limit the class of minibuses to vehicles that were designed to contain at least nine passenger seats. Therefore, there is logic in taking the number of seats down to nine and no further. It is right that we should take careful account of the safety issues that arise from schemes of this kind.

We have carried out research on the subject and plan further research to learn more about employers' use of existing vehicles. We are open to the possibility of making further tax changes in respect of buses, but the change in the Bill will be widely welcomed as an important step in the right direction.

Mr James Clappison (Hertsmere, Conservative)

I hope that the research that the Financial Secretary mentioned will examine the interests and needs of small employers, in particular—that group will perhaps be the most interested in changes of this nature, which involve that number of people—their employees, and the type of vehicles that such employers have that might be used to transport employees to work and, thereby, avoid the situation that we all want to avoid, in which too many journeys are made in cars carrying only one person.

Question put and agreed to.

Clause 60 ordered to stand part of the Bill.