Mountain rescue teams face paying an extra £28,000 in VAT

MPs have rejected a move to freeze the VAT hike that will hit mountain rescuers next year.

And they threw out a Labour move to produce a report on the effect of the tax on the volunteer teams.

The defeat on the Opposition amendment on mountain rescue services was the closest Commons vote so far in this Parliament. Tim Farron, Liberal Democrat MP for Westmorland and Lonsdale, who has championed the teams’ campaign to have their VAT refunded, abstained on vote to draw up a report on mountain rescue services but voted with his Coalition Government colleagues to thwart a move by Labour’s treasury team to stop the VAT rise for charities.

The Chief Secretary to the Treasury Danny Alexander, who as a LibDem opposition MP attacked Labour for its stance on the issue when in Government, joined Conservative and Liberal Democrat MPs to throw out the amendment that would have stopped the 2½ per cent increase in VAT which, it is estimated, will cost the volunteer teams an extra £28,000 a year.

Danny Alexander: mountain rescue a 'vital service'. Photo: Dave Radcliffe CC-BY-ND-2.0

Before the general election, Mr Alexander said: “It has never been right that a vital service which relies on donations from the public and extraordinary commitment from volunteers gets hit by the Government for a sizeable tax payment.” But last night he joined Coalition MPs in defeating the Labour amendment to stop the rise, and also defeat the call for a Treasury report on its effect on mountain rescue services.

Scottish National Party, Plaid Cymru, Democratic Unionist and Ulster Unionist MPs joined the Green Party’s single MP Caroline Lucas in supporting the Labour amendment.

One Liberal Democrat, Bob Russell, MP for Colchester, voted with the Opposition on the VAT rise. Several LibDems abstained on some of the amendments to the Finance Bill.

The Coalition Government had a majority of 73 in the mountain rescue vote and 78 in the wider issue of freezing the rise on charities’ VAT.

Shadow Chief Secretary to the Treasury Liam Byrne said today: “Last night, we set a fairness test for Coalition MPs and they comprehensively failed it.

“In the last few days we’ve exposed how charities will be hit for millions of pounds.

“Last night we gave LibDem and Tory MPs the chance to vote for a plan that would have protected charities and they didn’t have the guts to back us.

“It is the most extraordinary betrayal of Britain’s most deserving.”

Bob Russell tackled David Cameron at Prime Minister’s Questions in the Commons today, saying: “Voluntary organisations and charities were not responsible for the banking crisis nor the financial crisis left by the last Labour government.”

During the debate yesterday, Cumbrian MP Tony Cunningham praised mountain rescuers. The Labour Workington MP said: “The emergency services are often praised for the tremendous work that they do, but the mountain rescue teams are a sort of forgotten emergency service. No better example of this could be given than what happened last November during the floods, when the Cockermouth Mountain Rescue Team saved people’s lives and did an incredible job.

But Mr Farron hit back at Mr Byrne, saying: “The reason why I only abstained is because it was totally disingenuous of someone to table the motion who wouldn’t even meet us when he was in Government.”

Tory Exchequer Secretary David Gauke’s reply to Mr Byrne’s amendment will have a familiar ring to the three-man team from Mountain Rescue England & Wales which has been pursuing the issue for four years.

He told MPs last night: “I am sure that all of us in the House have huge respect and admiration for the work of the mountain rescue services and recognise the valuable contribution that they make to the safety of those enjoying the countryside.

“The case is well understood on both sides of the House, but as the committee will no doubt be aware, mountain rescue teams, like other search and rescue charities, benefit from VAT reliefs on some but not all goods and services that they purchase. Such charities are also able to purchase free of VAT medicines, medical equipment including first aid kits, splints and stretchers, ambulances and certain vehicles designed to transport disabled people.”

Compare this with a statement to grough from the Treasury in February this year: “Government recognises and values the commitment and essential work that organisations such as mountain rescue charities provide. There is no further scope for relief through the VAT system.  However Government does provide support to these charities, who can benefit from purchasing zero-rated specialist equipment and VAT free medicine and medical equipment.”

Tim Farron: 'will fight tooth and nail'

Tim Farron told grough today: “People get into government and they start listening to civil servants.”

However, the Cumbrian MP remains upbeat he can persuade his ministers to help mountain rescuers, not through the Finance Bill but through the promised Spending Review promised for October.

Although the review is viewed widely as an exercise in slashing public expenditure to cut the fiscal deficit, Mr Farron said he hopes the review will see some relief for MRTs. “I spoke to all the Treasury team: George Osborne, Danny Alexander and David Gauke,”, he said. “This is being considered in the spending review. It is better considered as a separate item.”

“I am pretty confident we are talking about a refund of the amount equivalent to the cost of VAT and vehicle fuel duty to the teams.

“They are going to do it properly, not in a knee-jerk way. David Alexander is very keen on helping mountain rescue teams. Although the public sector spending review is mainly about saving money, there will be some released for projects.

“If I was a betting man I would put money on getting a refund by October but we have to keep fighting. Mountain rescue should be very encouraged. You can be absolutely sure I will fight tooth and nail for this.”

The rate of VAT will rise from 17½ per cent to 20 per cent in January next year. The 79 volunteer mountain rescue teams pay an estimated £200,000 a year in VAT at present. The Scottish Government supports the MRTs north of the border to the tune of £300,000 annually, but English and Welsh teams receive no direct financial support from the Westminster Government or the Welsh Assembly Government.

It has been estimated that it would cost the Government £6m to provide an equivalent mountain rescue service.