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20 June 2017

Statement: Policing 2026

Stewart Stevenson (Banffshire and Buchan Coast) (SNP): I draw members’ attention to the fact that I have a close family member who is a police constable.

Is the cabinet secretary aware that section 41 of the Value Added Tax Act 1994 empowers the Treasury

“Where VAT is chargeable on the supply of goods or services to a Government department”

to direct the commissioners to refund VAT? On 1 April 2015 in England, such a direction was made to allow the Highways Agency to retrieve its VAT, and the introduction of academy schools has led to a similar effect. Is not it time that the Treasury was fair to Scottish interests and allowed us to regain the VAT that we have paid on our police force?

The Cabinet Secretary for Justice (Michael Matheson): Stewart Stevenson has raised an important point. As I mentioned in my statement, the cost of not being able to reclaim VAT for our police and fire services in Scotland has been £140 million so far and could, by the end of this parliamentary session, be almost double that figure.

I know that many members will say that we were warned about that when we created Police Scotland: I do not reject that argument. However, I reject the idea that the Treasury does not have the power to give a VAT exemption to, or the ability to return VAT to, Police Scotland and the Scottish Fire and Rescue Service.

As Stewart Stevenson made reference to, and as I have made reference to on a number of occasions in the chamber, the Treasury has, when it has suited it to do so, allowed a national organisation to reclaim VAT. However, for some reason, when it comes to Scotland’s key emergency services, the Conservative UK Government refuses to do the same. It will be telling if the new Scottish Conservative MPs in Westminster continue to vote against the Scottish police and fire services being allowed to reclaim VAT. That is unacceptable, so it is about time that Conservative members stood up for Scotland’s police and fire services.

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