A pledge by Chancellor Gordon Brown to look at removing a so-called stealth tax on public transport in next year’s Budget has been welcomed.

The move could make it easier for companies to offer their employees discounts on bus, train and tram fares to get to work.

In the West Midlands, similar schemes supported by the transport body Centro-PTA already take around two million car journeys a year off the region’s most congested roads.

“If the Chancellor includes this change in the Budget it will be an important step in giving equal consideration to public transport users and motorists,” comments Centro-PTA chairman Cllr Gary Clarke.  “As the need to tackle climate change moves ever higher up the political agenda, we need to see many more moves to encourage greener transport options.”

More than a hundred West Midlands firms participate in Centro-PTA’s Corporate Travel Scheme scheme where employers pay up front for annual season tickets at a reduced price and then recharge the costs via monthly salary deductions.

But where companies want to support the environment by paying to subsidise public transport passes for their staff, employees will find they are taxed on that as a benefit.  There is no similar tax on a company supporting car-users by providing free parking at work.

The anomaly was raised again in the Commons debate on this week’s Pre Budget Report.  As a result, Gordon Brown acknowledged an important point had been made and that Treasury officials would be asked to look at it in the run up to next year’s Budget.  (Hansard link)

Although the Chancellor announced increases in petrol duty and air passenger duty and some greener fuel incentives extended to trains, environmental groups have generally criticised him for not doing enough to encourage sustainable travel.

In the last financial year public transport fares increased by between three and eight per cent, while the cost of motoring went up by less than one per cent.

In contrast, Cllr Clarke points out that public transport users consume three times less energy than car users.

“Seventy million commuters trips are made in the Centro-PTA region every year and if those using a car were to switch to public transport for just one day a week it would reduce the amount of carbon dioxide emitted into our atmosphere by 125 kilograms per person a year,” he says.  “That would be a real contribution to reducing climate change and the impact of transport on the environment.”