John Denham accuses government over Southampton docks tax pledge (From Daily Echo)

John Denham accuses government over Southampton docks tax pledge

7:20pm Thursday 22nd July 2010 in

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THE GOVERNMENT has hit back at claims that a promise to ease the tax bills of Southampton port firms was a pre-election bribe.

John Denham, Labour MP for Southampton Itchen, suggested in the Commons last week that the coalition’s decision to spend hundreds of millions of pounds “entirely wiping out” the rates of certain port properties showed its priorities were wrong as public services faced severe budget cuts.

Mr Denham, shadow communities secretary, told MPs: “Is not that a pretty disgraceful piece of pork-barrelling, given that the measure is aimed at what were Tory target seats in the last general election?

People up and down the country who face their services being cut will ask why that is a priority in these difficult times.”

Yesterday, however, ministers rejected the criticism as it emerged that firms in Southampton port stood to benefit from the changes to the tune of £3m.

The Government has already implemented a moratorium for the payment of certain rates bills until the end of March next year, while in June’s emergency budget Chancellor George Osborne announced plans to cancel the backdated element of bills for businesses hit with unexpected and significant rates.

Local Government Minister Bob Neill, in a letter to Mr Denham, said he was “disappointed”

by the Southampton MP’s attack on action to help “struggling firms facing the unfair imposition of retrospective business rates”. He said: “Far from being ‘pork barrel politics’, our steps are helping many constituencies with Labour MPs who have large majorities.”

Mr Denham, in response to the letter, said yesterday: “Everyone knows Government has to take difficult decisions about spending.

Every company that benefits from this will be pleased. But the Communities and Local Government department is slashing grants to local councils and putting at risk services and schools for a policy that will cost nearly £400m, with less than £1 in every £4 of that going to businesses in ports.

“The Government simply cannot justify spending this amount when so many frontline services are being hammered.”