SNP condemn Treasury's police and fire cash grab

The SNP has condemned Westminster’s blatant hypocrisy for imposing cuts then refusing to allow the Scottish Fire and Police Authorities to recover VAT, branding this a “naked cash grab”.

At this morning’s Justice Committee, Justice Secretary Kenny MacAskill revealed that HMRC has rejected a request from the Scottish Government that the Scottish Fire and Rescue Service and the Scottish Police Authority be able to recover VAT, as is the case with all other police and fire and rescue authorities in the UK.

SNP MSP John Finnie says the Treasury must reverse its decision and give parity to the SPA with the Police Service Northern Ireland in being able to recover its VAT.

Mr Finnie also 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.

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

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

“It is beginning to look as if Danny Alexander’s opposition to the services reclaiming VAT has more to do with the Lib Dems opposition to police reform than it does with public finances.

“Westminster is not just content with imposing huge cuts on our public sector, it also wants to see Scotland’s new police and fire authorities be the only services in the UK unable to recover VAT – at an annual cost of £25million.

“In contrast, following reforms in England and Wales, the new Police Commissioners will be entitled to recover VAT and the PSNI is able to recover the VAT it is charged on the supply of goods or services.

“Not only is the Treasury’s stance for Scotland at odds with the Police Commissioner and the PSNI, it is also different in its view in relation to Academy Schools in England.

“These are funded by central government but were allowed to recover VAT thanks to the Treasury introducing a new section into the VAT Act.

“Scotland’s new police service meets the Treasury’s policy on VAT recovery as it will continue to be able to receive funding from local councils to pay the costs of agreed local priorities.

“Thankfully the Scottish Government has learned never to depend on the Treasury, and even with a VAT payment the single services will deliver estimated savings of £1.7billion over 15 years. What is disappointing is that the intransigence of the Lib Dems means it will lose considerable sums that should instead be invested in making the authorities the best it can be.

“The Treasury’s decision is hugely regrettable and I urge them to treat Scotland in the same manner it treats the rest of the UK.”