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

The clause makes changes to allow tax relief for councillors on expenses paid by a local authority for home-to-work travel. Councillors perform an important constitutional role in representing communities across the United Kingdom. They carry out their role in their own time, often in addition to other professional and personal commitments, and most receive no payment other than allowances in recognition of the time and expenses they incur. The current rules enable councillors to claim tax relief for business journeys. Where councillors routinely see their constituents at the councillor’s home, tax relief is also due for travel between their home and council offices. However, changes in working practices mean that fewer councillors now see constituents at home, so most are no longer eligible to relief for home-to-work journeys. The Government do not think that is fair. We want to ensure that no one is discouraged from undertaking a role as a councillor due to the tax treatment of their travel expenses. Clause 28 will achieve that aim by introducing a clear, statutory exemption.

The changes made by the clause will exempt travel expenses paid to councillors from income tax, including journeys between a councillor’s home and permanent workplace, where the councillor lives in the local authority area or within 20 miles of its boundary. Secondary legislation will be used to introduce a matching disregard for national insurance contributions. The exemption will apply only where qualifying payments are made by a local authority for travel expenses incurred either on public transport or where a councillor uses their own vehicle for travel.

To ensure that councillors do not benefit from an unlimited tax relief, the exemption will be limited to the statutory approved rates where qualifying payments are made to a councillor for travel in their own vehicle. This will make the rules clearer and more consistent for local authorities and councillors. The measure will affect only the tax liability of elected or appointed councillors who currently receive taxable home-to-work travel expenses.

How many councillors does the Minister anticipate will benefit from these changes?

I think the numbers are difficult to calculate because they will depend on the particular arrangements that councillors wish to pursue and whether they claim or not. We received representations from a large number of councils—particularly county councils—that said the change would be welcomed.

I should have said that I am still an elected member of the Redbridge London Borough Council, albeit an unpaid one. The reason I ask is that, although I agree with the Minister’s case about fairness to local councillors, I wonder how he squares that with, for example, the changes the Government made to local government pensions, which meant that such people—in particular, leaders, mayors and cabinet members, who often give up their full-time work—are no longer eligible for the local government pension scheme. Surely these changes, which I do not think will apply to many authorities because many do not reimburse councillors for any journeys, are pretty small beer compared with the previous Government’s changes.

I do not know if the hon. Gentleman is advocating reversal of the changes made in the previous Parliament to pensions for councillors. I would argue that there is a degree of consistency with those changes. Councillors do not perform a job in the normal sense of most people in employment, so we argued in the previous Parliament that for them to have the same pension provision as most employees would not be appropriate. It is right to have a special regime that is not the same as that applied to people in employment with regard to travel expenses, and that is why we have brought in this measure.

Following on from the intervention by the hon. Member for Ilford North, I spent 11 years as a district councillor and several of those in cabinet. There always seemed an anomaly to me. I never joined the local government pension scheme and I always thought it was rather incorrect for councillors to be allowed to do so, because it equated their position with that of local government staff, rather than elected volunteers. The Government are to be congratulated. There were many in local government—possibly the silent majority—who welcomed that decision and had been rather embarrassed by being allowed to be members of that pension fund.

My hon. Friend makes a good point. It is not my purpose to reopen the debate on pensions and local councillors, however tempting that might be, but I am grateful for my hon. Friend’s intervention.

The clause will support councillors in the vital constitutional role they perform by exempting travel expenses paid by their local authorities from liability to income tax, and I hope it will stand part of the Bill.

I do not propose to spend a long time on this. I have never been a councillor but it would be seen as navel gazing for us as elected representatives to spend a long time on this clause. The Opposition support the  clause because we want to encourage democracy and so that democratic parties can get the best candidates, and this measure is all part of that spectrum.

I would like the Minister to clarify one point. He referred to journeys by public transport. I apologise that I was not concentrating enough when he made that reference. My understanding from the Chartered Institute of Taxation is that this change would not cover travel by public transport. If public transport travel is not covered, will the Minister please explain why? Will he also say whether, for example, a mayor who travelled by bicycle might claim these expenses?

I am grateful to the hon. Gentleman for his support for the clause. It is always good to see a consensus on supporting democracy. As I said earlier, the provision does apply to public transport, so the hon. Gentleman can be reassured that there is nothing that would discourage people using public transport. The provision will apply to public transport or where a councillor uses their own vehicle.

Bicycle?

I am afraid that I do not think that the travel expenses regime will apply to bicycling. I sense that the hon. Gentleman has his first campaigning issue to get his teeth into as a Front Bencher.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.