Unfair taxation on services

Sir – Even if the reasons given by the Scottish Fire and Rescue Service for removing air compressors from rural stations (NT 12 June) were sincere, it would be a case of robbing Peter to pay Paul.

A significant cause of the reported major funding gap for the SFRS is the estimated additional £10m annual VAT bill for which it is now liable, since its creation from regional services.

Chief Officer Alistair Hay, quoted in the article, decried this at a committee meeting at Holyrood in April, to the sympathy of the SNP convener. The newly created gendarmerie, Police Scotland, faces an estimated £23m which has produced similar objections.

This arises from Section 33 of the VAT Act 1994 which exempts public bodies from VAT on upfront spending allocations if they "undertake a function ordinarily carried on by local government, and have the power to draw its funding directly from local taxation". See also Section 2 of the more pithy VAT Notice 749 from HM Treasury (last updated February 2012).

With the creation of the SFRS and Police Scotland from region-based ones to one under central control, this exemption lapsed.

(I hasten to stress that I am not a tax expert. Nor, it appears, are those responsible for this un-holy mess. And I am not the one in receipt of huge public service salaries as well as seeking more and more power; whilst being less keen on the associated responsibility.)

Any big cheese in these organisations, or a weighty member of the SNP asserting that they were unaware of this, is telling an untruth. As far back as August 2011, when plans for amalgamation were being mooted, the Holyrood administration had been plainly warned.

They appear to have thought a special case would be made – they are the one true voice of Scotland and just great, after all – because correspondence between the then Justice Secretary, Kenny Macaskill, and then Exchequer Secretary to the Treasury, David Gauke, exist from June/July 2012. Mr. Macaskill can be seen making well-worn arguments; Mr Gauke rejecting them.

And yet they went ahead with it anyway, aided and abetted by a subverted committee system in Holyrood which has been turned into a private members’ club for the Party. Now three years later, like a computer game being reset at will, the same expressions of surprise and special pleading are being made.

This did not arise from UK or EU Government instruction. Extraneous or exceptional circumstances did not make it necessary. The objections from rank and file members are a matter of record, as they saw both of local knowledge and career opportunities as specific regional services came to dominate the top brass. This was entirely the child of the SNP with its statist tendencies, as well as kicking over the ant-hills of the British State in the vague hope that it reformed as something "Scottish".

Pleas for a special case include reference to the exemptions enjoyed by the BBC, academy schools in England and Wales, and even the Police Service of Northern Ireland. The BBC predates the VAT Act 1994 by decades: it is exceptional. When academy schools were instigated by UK Government they did not qualify for Section 33: they were extraneous.

As for the unique situation of Northern Ireland, that does not merit the compliment of a rational opposition.

The responsibility for the SFRS and Police Scotland being the only blue light organisations in the UK unable to access Section 33 is entirely the responsibility of Mr. Macaskill et al, and monumental arrogance that they are policy wunderkinds.

With the undeniable mandate which the SNP received last month from the electorate, it is time for a lot of people to grow-up and admit their howlers instead of blaming legislation they do not like.

Scotland has been on a war-footing for the best part of a decade. First the 2010 General Election, then 2011 Holyrood, then 2014 referendum, back to General Election for 2015, next year Holyrood again, then the EU referendum.

This has sucked political energy out and removed SNP policies from scrutiny.

Many departments have not been audited since 2007, and given the failure to respect – or even comprehend – Section 33 I dread to think what will be revealed. It may be necessary to melt some down and start again despite the cost.

Alexander Glasgow,

11 Tower Hill Road,

Thurso

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