MPs unite against curb on contractor expenses

The threat posed to public services by the cuts to tax relief that contractors can currently claim on their expenses has been laid bare in the House of Commons.

Labour MP Sir Alan Meale described the attack launched in the March Budget on Travel and Subsistence expenses as “short-sighted” in an Early Day Motion (EDM) last week.

Tabled in the Commons, EDMs are a mechanism by which MPs can officially voice concerns about government policy and demonstrate parliamentary support for particular causes.

Sir Alan, MP for Mansfield, tabled a motion calling for the "consequences" of the policy of no tax relief for 'SDC' contractors to be "properly recognised" by fellow MPs.

The EDM stated: “[The chancellor’s proposal] is likely to result in around 1.6 million workers experiencing up to a 20 per cent wage cut to their net salaries overnight.”

It also said: “If the government persists in such a short-sighted fiscal strategy it will result in undoubted delays and huge failures to essential services provided to citizens.”

Backed by nine other MPs including the Conservatives’ Sir Peter Bottomley, the motion identifies such services as being provided in hospitals, schools, colleges, local authorities and on civil engineering projects.

Crawford Temple, the chief executive of PRISM, a trade body fighting to defeat the curb on T&S tax relief from April, welcomed the Tory and Labour politicians’ interventions.

He said: “George Osborne has decided to press ahead with removing this vital relief which we expect to have huge consequences for public and private sector wage bills as employers are forced to make up for the shortfall.

“However, there is a huge amount of lobbying still to do as we continue to take our concerns to our elected representatives whose job it is to scrutinise government policy and hold the chancellor to account.”