VAT on Air Ambulance Fuel Payments

Guy Opperman Excerpts

Wednesday 11th July 2012 Commons Chamber

[Guy Opperman (Hexham) (Con)]

I beg to move,

That this House supports wholeheartedly the work and actions of the Air Ambulance Service nationally, and all the individual crew members and staff, who provide an outstanding service to people up and down the UK; notes that the Air Ambulance Service is a charitable organisation, funded by donations given by the general public, and without any direct funding from Government; further notes that the Air Ambulance Service has saved successive governments millions of pounds; notes that the Air Ambulance Service provides an emergency service similar to the Lifeboat Service, and that the Lifeboat Service has been excluded from the EU VAT Directive on fuel costs since 1977, whereas the Air Ambulance Service has been required to pay for VAT on fuel; notes that successive governments have failed to provide a rebate or exemption to the Air Ambulance Service for this VAT; calls on the Government to conduct an urgent review of this situation; and further calls on the Government, in the next 12 months, to consider providing for grants to the Air Ambulance Service commensurate to the sums incurred by the Air Ambulance Service for the VAT on the fuel they purchase, and to publish the outcome of that review within this timescale.

This is a cross-party debate arising from an e-petition that has approximately 150,000 signatures and is supported by many Members up and down the land. Our support for the air ambulances and the e-petition derives from a constituent of my co-sponsor of the motion, the hon. Member for York Central (Hugh Bayley), to whom I give my thanks. The constituent is Mr Ken Sharpe. I also thank the Backbench Business Committee for its support and Mr Speaker for finding time for it to be heard.

On 1 August the eyes of the world will be on London for the Olympics. For months I have been rigorously training my body to be at the peak of physical perfection. But I shall not be lining up against Usain Bolt. I shall be in the sleepy village of Edale, in north Derbyshire, where I, the hon. Member for Sheffield Central (Paul Blomfield) and other hikers will be about to commence a 280-mile hike along the greatest walk in the world, the Pennine way. I shall not be walking for a gold medal. My goal is not gold, but hard cash to support the Great North air ambulance service, which is of course the finest of all the air ambulance organisations. Others may be cheering on Jessica Ennis and sipping the corporate champagne, but this ageing, fattening ex-jockey will be existing on a prime diet of beer and flapjacks as I wearily trudge my way north to Northumberland. Usain Bolt has nothing to fear.

This debate is supported not only by the e-petition, but by a petition run by my local paper, the Hexham Courant. Other newspapers up and down the land have also done a great deal to raise the profile of this debate. It is a cross-party debate, giving the Treasury a fantastic opportunity, over the next 12 months, to consider all the information to do with air ambulances, how they are funded and how VAT applies to their fuel, and to come back with a possible solution after the Budget next year.

What is certain is that the issue derives from Europe, an issue that may have been occupying some of our minds these past few months. When our illustrious forebears took us into Europe—purely, as we all understood, for economic reasons—there was a requirement to sign up to the EU VAT directive, which covers UK VAT legislation. In 1977, the lifeboat service was exempted from the VAT on marine diesel. However, as the air ambulance did not exist at the time, it was not exempted and has subsequently been required to pay VAT on fuel costs. We are in this situation today because of that anomaly. As we have learned since the Budget in March, the Government are keen to clear up VAT anomalies.

We Back Benchers are often asked by Whips to believe many outlandish things—that the European Union always makes sensible decisions or that we will one day win a penalty shoot-out or have a Wimbledon singles winner. Today I will ask the House to accept one basic principle: that there is no real difference between a lifeboat and a helicopter. The lifeboat services are exempt from the VAT exclusion but the air ambulance charities are not—but they are both, I suggest, providers of life-saving emergency services that deserve all our support and all the exemptions made available for their vital work so that they may continue.

My constituency is the second biggest in the country; it has schools with catchment areas almost the size of the M25. It has rough, rural country, often without roads. In the west of Northumberland, our nearest hospital is well over an hour away; sometimes the four-wheeled ambulance struggles to be with us within an hour, if at all.

When I was a thinner and better jockey, I met many other jockeys who had struggled after a fall when they needed to be airlifted to hospital. People frequently have to be supported and airlifted to safety from the A1. This is not just a rural issue, but one that affects cities and towns just as much, when there is a lack of access or urgent transfers are required.

[Anne Marie Morris (Newton Abbot) (Con)]

I absolutely commend my hon. Friend’s argument. Devon Air Ambulance in my constituency is absolutely vital. There are very rural parts of the countryside and I entirely agree that it seems disproportionate that it should have to pay VAT, unlike the lifeboat services.

[Guy Opperman]

I endorse everything that my hon. Friend has said; she is a great supporter of that organisation.

[Mr George Howarth (Knowsley) (Lab)]

I congratulate the hon. Gentleman on being fortunate enough to raise this debate. As he pointed out, urban areas are often as dependent on air ambulance services. The North West Ambulance Service, based in my constituency, is highly regarded right across the region.

[Guy Opperman]

The right hon. Gentleman mentions an exceptional air ambulance charity, which is supported not just by him but by all MPs concerned with the north-west.

Put simply, in my part of the world—and all others, for that matter—health care would be jeopardised without the charitable air ambulance service. I am not denigrating the providers of other emergency services, but we could not operate without the Air Ambulances. For example, the Great North air ambulance covers an area of 8,000 square miles, from the Scottish borders to North Yorkshire and from the east to the west coasts. The helicopters can be anywhere in the region within 15 minutes and on board are specialist trauma doctors and paramedics, who bring expert accident and emergency qualities to the scene. However, each mission costs £2,500, regardless of whether the patient is airlifted. That takes into account the cost of the aircraft, storage, paying the pilots and paramedics, and medicine and other equipment. There are hundreds of call-outs per month, and the same applies all across the country. Given that this involves paying in excess of £100,000 a year on fuel, of which VAT represents 20%, there will be a significant saving not only to the Great North air ambulance service but to several others, and that would equate to life-saving missions.

[Andrew Bridgen (North West Leicestershire) (Con)]

I commend my hon. Friend for securing this debate. East Midlands Air Ambulance is based in East Midlands airport in my constituency. I have met the crew, and they are genuine professionals who, as he says, go out every day saving people’s lives, especially along the M1 and M42 corridor, where the roads are very dangerous.

[Guy Opperman]

At this stage, one has to acknowledge that only a fool would fail to see that the Government are in the headlock of a debt crisis, a eurozone meltdown and a struggling economy. Everyone accepts that they are short of a magic chequebook. However, I am pleased to point out to the Treasury that those at the air ambulance organisations are not difficult people. We do not seek a solution straight away. The motion asks for an urgent review and a study of the submissions and financial arrangements of the air ambulance charities, and for a long-term solution to be reached at some stage in the near future. On any interpretation, successive Governments have got a great deal from this free service. No Government have ever properly addressed this loophole, and we are giving this Government a chance, over the next year, to investigate and address the problem.

We may be divided on many things, but we should all support this wonderful organisation. The sums that the Treasury would have to find are relatively slight—considerably less than £200,000 a year. Given the amount that the charitable organisations raise from members of the public and the amazing service that is provided, at the end of this debate we should be able to agree that there is no fundamental difference between a lifeboat and a helicopter, because both services are invaluable and should receive our support equally.

--- Later in debate ---

[Guy Opperman]

I suggest that the principle is the key. The proposed change would, without a shadow of doubt, potentially save lives. If anyone doubted the universal appeal of the air ambulance, we should look at who has spoken in this debate.

The debate was commenced on the Scottish border, in Hexham, but took in the constituencies of my right hon. Friend the Member for Berwick-upon-Tweed (Sir Alan Beith), my hon. Friends the Members for Penrith and The Border (Rory Stewart) and for York Outer (Julian Sturdy), and the hon. Member for York Central (Hugh Bayley), as well as other Yorkshire constituencies, such as that of my hon. Friend the Member for Pudsey (Stuart Andrew). We then went down to the constituencies of my hon. Friend the Member for Brigg and Goole (Andrew Percy), the right hon. Member for Wentworth and Dearne (John Healey) and the hon. Member for Leeds North West (Greg Mulholland). Then we travelled down the country, taking in the constituencies of my hon. Friend the Member for North West Leicestershire (Andrew Bridgen) and the right hon. Member for Knowsley (Mr Howarth), as well as constituencies in London, such as those of my hon. Friends the Members for Brentford and Isleworth (Mary Macleod) and for Hendon (Dr Offord), before going down into Kent, to the constituency of my hon. Friend the Member for Chatham and Aylesford (Tracey Crouch). We then went down to the constituency of my hon. Friend the Member for South Dorset (Richard Drax)—not forgetting my hon. Friend the Member for Rugby (Mark Pawsey), whose constituency we passed on the way—before finally heading down towards the vast reaches represented by my hon. Friend the Member for Newton Abbot (Anne Marie Morris), and that is without taking into account the areas represented by the shadow Minister, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), and the Minister.

I am grateful that this has been a cross-party debate. My thanks go to all who signed the petition. The debate was also well informed, but it would have been helpful if the shadow Minister had remembered the 10 fuel duty rises from the last Government, which have had such an impact on the air ambulance service, and the fact that this Government have not put fuel duty up once.

To sum up, I want to give particular credit to two groups of individuals: to all the staff of the air ambulances, all over the country, and to all those who raise money for individual air ambulances. Last weekend I was at the Haydon Bridge beer festival, and I shall be at the Otterburn show raising money for these institutions this coming weekend. Anybody who has no plans for the Olympics in the summer can come and join me on the Pennine way odyssey, which is taking place in August, or give funds to the event. The principle is the key. The proposed change will save lives, and I commend the motion to the House.

Question put and agreed to.

Resolved,

That this House supports wholeheartedly the work and actions of the Air Ambulance Service nationally, and all the individual crew members and staff, who provide an outstanding service to people up and down the UK; notes that the Air Ambulance Service is a charitable organisation, funded by donations given by the general public, and without any direct funding from Government; further notes that the Air Ambulance Service has saved successive governments millions of pounds; notes that the Air Ambulance Service provides an emergency service similar to the Lifeboat Service, and that the Lifeboat Service has been excluded from the EU VAT Directive on fuel costs since 1977, whereas the Air Ambulance Service has been required to pay for VAT on fuel; notes that successive governments have failed to provide a rebate or exemption to the Air Ambulance Service for this VAT; calls on the Government to conduct an urgent review of this situation; and further calls on the Government, in the next 12 months, to consider providing for grants to the Air Ambulance Service commensurate to the sums incurred by the Air Ambulance Service for the VAT on the fuel they purchase, and to publish the outcome of that review within this timescale.