The Government’s comprehensive spending review may kill salary sacrifice schemes, claims financial journalist Paul Lewis. The chancellor announces the cuts tomorrow.
UPDATE: The comprensive spending review said: "Salary sacrifice – The government remains concerned about the growth of salary sacrifice arrangements and is considering what action, if any, is necessary. The government will gather further evidence, including from employers, on salary sacrifice arrangements to inform its approach."
So, the Cycle to Work scheme is safe for now, it seems.
"Salary sacrifice … may be targeted by Chancellor," tweeted Lewis, the presenter of Moneybox on BBC Radio 4.
Many bike shops are heavily dependent on the sales made through the Cycle to Work scheme, a "green travel" initiative introduced in the Finance Act 1999.
When asked by BikeBiz whether his tweet was an educated guess or something a bit stronger the well-informed broadcaster replied:
"We’ll see tomorrow." Lewis also added two exclamation mark on his emailed reply.
Funding for cycling – and other forms of active travel – is expected to be almost wholly removed by the chancellor tomorrow.
Earlier this month a well-placed source in sustainable transport told BikeBiz: “We have to prepare for the worst. There are no indications that active travel modes will get anything out of the Comprehensive Spending Review. The government believes major infrastructure projects will generate economic growth, and our arguments about health, the environment, the economic potential of cycling and how building more roads leads to more congestion have fallen on deaf ears.”
The expert added: “[Transport Secretary] Patrick McLoughlin has persuaded himself that “further and faster” projects are the only transport interventions that can deliver economic growth so everything else can, and will, be ignored.”