"Can I withhold payments for labour which I feel has been negligent?"
I'm not a lawyer, but my feeling is that the answer is probably "legally, no". The hours have presumably been done (it would be difficult to prove otherwise) and you authorised the garage to work on the car. It's the outcome you're unhappy about - which is a separate issue.
I assume you feel (a) the garage should have diagnosed the failed turbo, as indeed the RAC did and (b) the garage should have returned the car to you having checked and topped up the oil. (We don't know, of course, how much oil was there when you took the car to the garage. Do you?)
Do you claim that there has been any damage caused by the low oil level? Or is heavy oil use just part of the turbo failure?
It seems to me you'll need expert witnesses to be able to make a case stick and if it was me I'd leave it and move on. I would, however, approach the garage with a view to getting the turbo fixed at a discount, as they failed to sort it the first time.
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