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Hull MP calls on Osborne to halt New Year fuel tax rise

Diana Johnson MP has called on the Chancellor to abort his New Year 3p per litre petrol tax rise that is due to hit families on 1st January 2013.

The Hull North MP’s call comes ahead of the Chancellor’s Autumn Statement, which will be made by George Osborne next Wednesday (5 December).

The Fuel Duty rise will hit Hull people and businesses hard as the City suffers hundreds of local jobs losses and struggles to emerge from the double dip recession. The Hull North MP 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 economic failure.

As well as helping people on low and middle incomes, stopping the petrol tax rise would also help businesses and the flat-lining economy.

Diana Johnson MP said: “At a time when the cost of living is rising and our recovery is fragile it’s wrong to hit low to middle income families and small businesses with another Fuel Duty rise.

“While further squeezing incomes of many hard-pressed Hull families, this out of touch Government is giving 8,000 millionaires an average tax cut of over £107,000. Around 162,000 of the wealthiest people in London and the South East gain from the Coalition cut to the 50p income tax rate - while only 13,000 in Yorkshire and Humber benefit.

“In Hull we have more people going to Food Banks and loan sharks, increasing homelessness and see hundreds of local job losses throwing local people onto benefits.

“The price of petrol is now more than £1.36 a litre, a hefty rise of 15p since the Tories and Lib Dems came to power. Hull families already feel the squeeze from the Government's VAT rise - which has added 3p to the price of a litre of petrol - and deep cuts in areas such as tax credits.

“Delaying January's Fuel Duty rise, initially at least until April, would provide some much-needed cash help. Tory and Lib Dem MPs recently voted in the House of Commons against Labour’s plan to halt the New Year Fuel Duty hike, but I will keep urging the Government to change their minds and not clobber local families and businesses at this tough economic time.

“We got Coalition Ministers to change their recent plans to wreck even more Hull jobs with the Caravan Tax. I hope that we can now force a u-turn on Fuel Duty."

Diana Johnson MP 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.