I had to think about wee eddies post for a while 'cos it didn't seem correct, but he's actually right.
The diameter might change with less pressure but the circumference remains the same

A tyre is a pretty solid lump of rubber, in that it doesn't stretch much, if at all. If you look at one on the shelf in a fitters it's the same size circumference as one fitted on a rim with 30psi in it. And not forgetting a tyre isn't all rubber, there's all the steel banding wrapped around it which will stop the tyre becoming larger (or smaller) as well.
The only thing that will change the circumference would be tread wear. So if 'people are paying through the nose on some journeys' it's not because of tyre pressures, which makes the councillor even more ignorant than first thought !