John Denham, Labour MP for Southampton Itchen, is calling on the Chancellor to cancel the government’s new year 3p per litre petrol tax rise that will hit local people hard when it comes into force on 1st January 2013.
John has slammed the Conservative-led Government for being out of touch with local people and the rising cost of living caused by the government’s failing economic policies.
- As well as helping people on low and middle incomes, stopping the petrol tax rise would also help businesses and the flatlining economy.
- John is calling on the government to pay for this move by clamping down on identified tax avoidance loopholes. For example, there is a growing problem with some employment agencies forcing workers to become employees of an umbrella company. They then falsely inflate the worker’s travel and food expense claims, reducing tax and national insurance, and pocket the avoided tax as profits.
- HM Revenue and Customs has forecast that these schemes cost the exchequer £650m a year but more recent estimates have put it as high as £1 billion a year. Delaying the fuel duty rise until April 2013 would cost around £350m.
John Denham said:
“At a time when the cost of living is rising, our recovery is fragile and this out of touch government is giving 8,000 millionaires an average tax cut of over £107,000, it cannot be right to hit middle and low income families and small businesses with another tax rise.
“The price of petrol is now more than £1.36 a litre, a massive rise of 15p since the Tories came to power. People across Southampton are really feeling the squeeze from the government’s VAT rise – which has added 3p to the price of a litre of petrol – and deep cuts to things like tax credits. So delaying January’s fuel duty rise, at least until April, would provide some much-needed financial relief.
“It’s really disappointing that Tory and Lib Dem MPs voted in the House of Commons against our plan to stop the new year fuel duty hike. But I will keep urging the government to change their minds and not hit local families and businesses so hard at this very difficult time for our economy.”