Theresa May to "look at" issue of Police Scotland VAT

Theresa May has stoked speculation that the UK Government will fill a £35 million black hole in the budgets of Scotland's emergency services after she pledged to "look at" controversial VAT rules

Police Scotland and the Scottish Fire and Rescue Service (SFRS) have paid around £140 million in VAT since 2013, when the services were merged into national organisations.

The reform made them eligible for VAT payments, which locally-controlled public bodies including police forces in England and Wales are exempt from.

Opposition parties in Scotland say the SNP were warned by the Treasury that national emergency services would be liable for VAT. Nationalist politicians have campaigned for the exemption to be extended to Police Scotland and the SFRS without success, but since the general election in June, representations have also been an enlarged group of 13 Scottish Conservative MPs.

Challenged on the issue by SNP Westminster leader Ian Blackford at Prime Minister's Questions, Mrs May suggested the government could change its position and pledged to "look at the issue".

Mrs May said: "We will look at this issue and report on it in due course, I am pleased to say that very constructive representations have been made by my Scottish colleagues on this particular issue.

"But let's just be clear because he knows that before the Scottish government made the decision to make Scotland's police and fire services national rather than regional bodies they were told this would mean that they would become ineligible for VAT refunds and they pressed ahead despite knowing that."

Mr Blackford had told Mrs May at Prime Minister's Questions that his party "would not give up" on this issue and urged her to take action.

He said: "Scottish fire and police are the only forces in the United Kingdom to be charged VAT, depriving frontline services of £140 million since 2013.

"The SNP has now raised this issue 30 times in this chamber, that the UK Government now gives Scotland's emergency services back £140 million and scrap the VAT.

"It's been a longstanding SNP campaign, we will not give up."