‘No excuse’ for Westminster’s VAT tax grab

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By a Newsnet reporter

A decision by Westminster to refuse to allow Scottish Fire and Police Authorities to recover VAT, despite it being allowed for other Fire and Police Authorities elsewhere in the UK, has beel slammed by a Holyrood MSP.

Mike MacKenzie, MSP for Highlands and Islands, has joined Moray’s MP Angus Robertson in condemning the move branding it “hypocritical”.

At a meeting of last week’s Justice Committee at Holyrood, Justice Secretary Kenny MacAskill revealed that the UK Government had rejected a request from the Scottish Government to allow the Scottish Fire and Rescue Service and the Scottish Police Authority (SPA) be able to recover VAT, as is the case with all other police and fire and rescue authorities in the UK.

Mr MacKenzie said:

“It is absolutely beyond me why changes to policing arrangements in England & Wales will allow VAT recovery while it is being refused for the new Scottish policing arrangements.

“Scotland is not asking for extra funding, simply tax parity with other parts of the UK.

“We are talking here about millions of pounds that can be reclaimed by other forces but not by police and fire services here. That money could be supporting more community policing in the Highlands and Islands, further driving down organised crime and increased fire prevention work, amongst many other possibilities.

“There is no excuse for refusing to allow VAT recovery in Scotland when it is allowed elsewhere. We are told by the UK parties of the benefits that Scotland gets from being in the UK but that clearly does not extend to the tax treatment of vital emergency services.

“This decision hits the investment potential for communities throughout the Highlands and Islands , which is only offset by the Scottish Government’s contrasting strong support of the emergency services.”

The decision was also criticised by SNP MSP John Finnie, a member of the Justice Committee, who called for it to be reversed in order to give the SPA parity with the Police Service Northern Ireland, in being able to recover its VAT.

Mr Finnie, a former police officer, pointed out that the UK Treasury was allowing centrally-funded Academy Schools to reclaim VAT, despite them being in the same position as the Scottish Fire and Police Authorities.  

The MSP denounced the refusal of the UK Government to apply the same ruling to Scottish Fire and Police Authorities as a “naked cash grab”, and blamed the decision on the Lib Dem MP and Secretary to the Treasury Danny Alexander.

Mr Finnie, a former police officer and member of the Scottish Parliament’s Justice Committee, added:

“This is just a naked cash grab from the Exchequer in what is effectively a tax on public sector reform.”

The relationship between police and government is radically different when Scotland and England are compared.  

South of the border the police are ultimately under the control of the Home Secretary, Theresa May.  Ms May has presided over a reduction in the number of police officers in England, with a further 16,000 job losses in the pipeline, critics say the rise in crime rates is a direct consequence.  

The Home Secretary was recently booed and jeered by police officers when she gave an address to the Police Federation conference.  Officers in England are angry at new terms and conditions which they say will result in them working longer for less.

The Scottish Government is investing in additional police numbers, which has helped crime reduction and boosted detection levels right across Scotland, and refuses to implement the new police terms and conditions being enthusiastically promoted by Ms May.  

The decision by the UK Treasury to refuse the VAT request is being seen by some as the imposing of an arbitrary financial penalty on Scotland in order to deter the developing of distinctive Scottish policies within the framework of the current devolved settlement.