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Labour MPs have expressed concern about potential plans to cut or scrap a tax paid by tech giants to stave off the threat of Donald Trump’s tariffs.
The chancellor and business secretary have both left the door open to possibly abolishing the 2% levy on the online revenues made in the UK by companies including Facebook, Google, and Amazon.
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The idea has been mooted as a means to avoid further tariffs from Mr Trump, who has brought in 25% taxes on steel and aluminium imports and signed another executive order yesterday that will affect cars.
However, a number of Labour MPs have raised concerns about the optics of reducing or abandoning the tax while cutting benefits for sick and disabled people, as the chancellor confirmed yesterday in her spring statement.
Clive Lewis, the Labour MP for Norwich South, told Sky News any potential alterations to the tax – which was introduced in 2020 and raises about £800m annually – would amount to an “abject dereliction of responsibility”.
“We are rolling out the red carpet for these tech companies, and we are not getting much in return,” he said.
“If you are going to give tax cuts to some of the wealthiest corporations on the planet just as you have taken billions from welfare – how do you think that is going to look to the public? It’s going to look absolutely horrific.”
He added: “I understand the argument of hugging America close – but this is not the way to do it.”
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Another Labour MP argued there…
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