VAT on Air Ambulance Fuel Payments

Debate between Andrew Percy and Catherine McKinnell

Wednesday 11th July 2012 Commons Chamber

[Catherine McKinnell]

Indeed. We all know of very moving stories in our respective localities where lives have, without doubt, been saved by air ambulances.

As the hon. Member for Hendon (Dr Offord) said, air ambulances have come an awfully long way since their early days. They are now high-tech, mobile A and E departments carrying senior trauma doctors alongside paramedics and transporting state-of-the-art medical equipment to wherever it is needed.

[Andrew Percy (Brigg and Goole) (Con)]

I recently met people at Lincolnshire and Nottinghamshire Air Ambulance, to whom I pay tribute. They told me about some of the other problems they face, apart from VAT. Does the hon. Lady agree that there are other issues that we need to address, such as the fact that while some hospitals can accept air ambulances, others will need a land-based ambulance transfer?

[Catherine McKinnell]

The hon. Gentleman makes an important point, and I am sure that the Minister will take it on board and deal with it in his response.

Only a few months ago, air ambulances proved that they are at the cutting edge of technology. As the hon. Member for Hendon pointed out, we are in an ever-progressing medical world where we need to keep constantly under review all the services that provide vital care to people, but particularly the air ambulance service. A few months ago, for the first time, an air ambulance carried blood supplies allowing a blood transfusion to be carried out at the scene of an accident. London’s air ambulance service believes that this innovation has been made possible due to a new refrigeration unit devised by the British military, and it could no doubt save hundreds of lives in the years to come.

It is no wonder that air ambulances continue to receive such outstanding support from members of the public and that over 150,000 people have been moved to sign the petition. I do not think that anyone would disagree that we have to support such services. However, as has been discussed, there are other issues relating to EU law and the harmonisation of VAT legislation across member states. Members have already mentioned the anomaly whereby fuel for lifeboats is VAT-free. As hon. Members and members of the public who have signed the petition have noted, there is no equivalent provision in these EU-wide rules to allow for fuel bought by charities such as air ambulances to be provided VAT-free, although various provisions such as medical equipment and first aid kit are VAT-free, and air ambulance providers that lease the air ambulance rather than buying it outright receive different treatment for VAT. Air ambulance services are put in a difficult position when there are anomalies within the VAT system and they are subject to change.

The motion calls on the Government to review the tax treatment of air ambulances and their fuel and to carry out the requested study on compensating them for VAT payments. I will be interested to hear the Government’s response to that, but there is more that they could do to try to help these life-saving services. As we all know, we are living in difficult times. Our economy is in a double-dip recession; borrowing forecasts are rising, not falling, and not only families and businesses are feeling the pressure and the squeeze but charities and organisations in the voluntary sector, which have been hard hit by the cuts that have been made. Collectively, air ambulances are one of the busiest voluntary services in the country. As charities, they rely on the support of over 1.25 million donors to keep them going. Air ambulances save hundreds of lives every year. They are expensive, but for those who benefit from the service they provide, they are priceless. The average spend per helicopter is more than £750,000. Put simply, without charitable donations and funding, these life-saving services would not exist. The men and women of these emergency teams work tirelessly. The Government should do all they can to support them.

There are changes that the Government could make immediately to ease the pressure on air ambulance services and other charities. As part of Labour’s five-point plan for jobs and growth, we are calling on the Government to introduce a temporary reduction in VAT to 17.5% to bring down the cost of fuel across the board. Air ambulances and motorists alike would benefit from that. Since the Government increased VAT, people across the country have been feeling the squeeze. Equally concerning is the impact it has had on charities. It has cost them an overwhelming £143 million.

With air ambulances using about 130 litres of fuel on every mission, a decrease in the rate of VAT would bring immediate relief to those services up and down the country—so too would clarity on the Government’s position on fuel duty, because it would allow services to plan for the future. The Labour party called for the 3p rise in fuel duty that was scheduled for August to be delayed to help hard-pressed motorists. Although we welcome the U-turn on that, it would be helpful if the Government explained what they will do in the long term on the price of fuel and how they will put it on a more sustainable footing for motorists and for air ambulance services.

As well as responding to the request in the motion put forward by the Backbench Business Committee, the Government could usefully respond to some additional questions to reassure air ambulance services that they have the support of the Government and that the Government are doing all they can in these difficult times to ease the pressure on them, so that these hard-working teams can continue to save lives and carry out their excellent work. What plans do the Government have to provide support to the thousands of charities that are increasingly performing vital services in our communities and that are struggling as a result of the increases in VAT and the cuts to funding? How do the Government intend to pay for the delay in the 3p fuel duty rise in August? What are the Government doing to put the cost of fuel on a more sustainable footing to help not just households and businesses, but vital charitable services? Finally, what assessment has the Minister made of the possibility of offsetting the cost of VAT on fuel payments by air ambulances through the use of other departmental budgets or anticipated departmental underspends?

Finance Bill

Debate between Andrew Percy and Catherine McKinnell

Tuesday 3rd July 2012 Commons Chamber

[Catherine McKinnell]

The figure that the hon. Gentleman is looking for is £450 for a couple with children. It would put money back into their pockets, boost the economy and drive growth. Let us not forget that the Institute for Fiscal Studies has predicted that the Government’s tax credit changes will mean that families will be £511 worse off this year and £1,250 a year worse off by 2015.

[Andrew Percy]

Who would benefit more from a VAT cut, a family earning just above the minimum wage or a millionaire?

[Catherine McKinnell]

Clearly, a family would gain more from a VAT cut because they spend much more on VAT as a proportion of their household income. The hon. Gentleman’s indignation at that response demonstrates just how much the Government are out of touch with the reality of the effect of their spending plans on households and household incomes. That would explain why this economy is going backwards rather than forwards under the Government’s plans.

--- Later in debate ---

[Catherine McKinnell]

It all depends on how long the Government take to get the economy back into growth. The reaction of Government Members seems strange, when they are driving the economy into recession rather than into growth.

[Andrew Percy]

The hon. Lady will be aware that the temporary reduction under the last Government had a significant cost impact on a number of businesses. If the economy suddenly went into growth in the quarter following the reduction, would she expect businesses to take the burden of the costs of implementing the reduction and then unimplementing it in two successive quarters?

[Catherine McKinnell]

The hon. Gentleman is getting ahead of himself, given that we are in a double-dip recession, that growth has stalled, that all the predictions of the Office for Budget Responsibility are being revised down day on day, and that borrowing is going up. Everybody agrees that we need demand in the economy. The way of generating demand in the economy is to put money back into people’s pockets. I remind hon. Members that before the increase in VAT, the economy was on a trajectory of growth. That was before this Government took over and brought in their disastrous austerity policies.

Congenital Cardiac Services for Children

Debate between Andrew Percy and Catherine McKinnell

Thursday 23rd June 2011 Commons Chamber

[Catherine McKinnell (Newcastle upon Tyne North) (Lab)]

That the children’s heart unit at Newcastle’s Freeman hospital is cherished across the north-east is undisputed. One has only to read the coverage of the Newcastle Evening Chronicle “Keep Our Children’s Heart Unit” campaign in recent months to appreciate just how the unit has changed the lives of countless young people and families over the past decades.

Indeed, because of the pioneering work of the children’s heart unit at the Freeman, it is recognised nationally and internationally as a centre of excellence, with particular strength in quality and outcomes. The unit has also had significant investment over recent years. It is the only unit in the country able to offer all forms of heart treatment, regardless of age, under one roof, and the Freeman is recognised as having led the way in the UK in providing end-stage heart failure treatment for children.

As my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) said, the Freeman famously and bravely performed the UK’s first successful baby heart transplant in 1987. It has performed more than 200 child heart transplants overall, and was recently the first hospital in the world to enable a young child to survive for four months with an artificial heart, while the baby’s own heart recovered.

The quality of the work carried out at the Freeman means that young patients and their families travel to Newcastle for treatment not just from the west of Cumbria or north Yorkshire, but from as far afield as Scotland, Northern Ireland and even the Republic of Ireland.

For those reasons, I believe that the children’s heart unit at the Freeman is well-placed to continue providing its excellent, world-leading cardiac surgery services for children. Three of the four options put forward by the Safe and Sustainable review propose that that should be the case. However, I have concerns about attempts to move the debate away from the key issue at hand: ensuring that congenital cardiac services provided to children in England and Wales continue to be high quality, and therefore safe, and sustainable and deliverable. That was the intention of the Safe and Sustainable review.

[Andrew Percy]

Will the hon. Lady give way?

[Catherine McKinnell]

I shall give way once.

[Andrew Percy]

I do not think any hon. Members who are fighting to save their local units are trying to move the debate away from that. I shall quote what health professionals from the North Lincolnshire and Goole NHS Foundation Trust say:

“In summary, we believe the babies, children and families of northern Lincolnshire would be largely disadvantaged…knowingly relocating a well run and safe service without providing additional advantage to our families is questionable and unnecessary.”

We are not moving the debate away from the clinical issues at all.

[Catherine McKinnell]

The hon. Gentleman has put his thoughts and concerns issue on the record.

I mentioned the intentions of the Safe and Sustainable review, which was instigated by national parent groups, NHS clinicians and their professional associations. Those intentions must be the primary drivers in deciding the final outcome of the review.

I am equally concerned at suggestions that the decision and outcome of the review should be stalled, or that the remit should be altered. I am not alone in expressing such concerns. The Children’s Heart Foundation argues that that would leave

“the door wide open for another Bristol Baby tragedy”.

Meanwhile, the charity Little Hearts Matter believes that the Safe and Sustainable service reconfiguration offers—