A Labour MP has attacked proposals for a taxi tax as the ‘daftest idea I think I’ve ever heard’ as a new poll found the public view it as a raid on working people.
The Government has refused to rule out slapping VAT on private hire fares, sparking speculation the Chancellor will clobber cabbies at the Budget.
But Karl Turner, the Kingston upon Hull East MP, blasted the idea as ‘barmy’ and urged Rachel Reeves to rule it out.
His comments came as polling for the Stop the Taxi Tax campaign found 59per cent of Brits think small businesses will be hit by it.
Seven in 10 believe pubs, restaurants and other hospitality venues would be negatively impacted if taxis became less affordable, the research found.
Some 64per cent said it would be a tax on working people – a group Labour promised to protect from tax hikes.
Industry experts expect a taxi tax would raise £750million a year for the Treasury – but would add £2 to £3 to a typical £12 journey.
At present, taxi operators outside London do not have to charge VAT on journeys because their drivers are self-employed – and they typically remain under the VAT threshold.
Industry experts expect a taxi tax would raise £750million a year for the Treasury – but would add £2 to £3 to a typical £12 journey
Labour MP Karl Turner said: ‘This idea is the daftest idea I think I’ve ever heard because it’s more damaging to the most vulnerable. At least with the Tories’ daft pasty tax it was arguable that it had public health advantages. This doesn’t advantage anybody at all.
‘If this is seriously being considered by the Treasury, they need to get a grip and think about the terrible impact it would have on the industry and the economy.
‘It’s the wrong thing to do and would show the government is completely out of touch. The Chancellor should end the speculation around this immediately and rule out the barmy Taxi Tax idea.’
A Stop the Taxi Tax campaign spokesman said: ‘The Taxi Tax not only breaks the promise Labour made to the public not to raise VAT, but will completely backfire – hurting small businesses and therefore growth and jobs, which will only damage the economy and wipe out any short-term fiscal gain.
‘The Chancellor should instead stick to her promise and support small businesses by confirming that she won’t go ahead with the Taxi Tax.’
An HM Treasury spokesman said: ‘We take this issue very seriously and recognise its complexity. We are reviewing feedback from our recent consultation and will publish our detailed response shortly.’
Strand Partners’ research team carried out the online survey of 2,000 people between October 8 and 9.
