VAT on Air Ambulance Fuel Payments

Richard Drax Excerpts

Wednesday 11th July 2012 Commons Chamber

[Richard Drax (South Dorset) (Con)]

It is a pleasure to follow my hon. Friend the Member for Rugby (Mark Pawsey). I am delighted that my hon. Friend the Member for Hexham (Guy Opperman) and the hon. Member for York Central (Hugh Bayley)—he might recall that I used to interview him as a fledgling reporter all those year ago—have brought this matter to the attention of the House.

First, like all other Members I want to pay tribute to the professionalism and bravery of our air ambulance crews. The A31 just outside my home is, sadly, notorious and I often see that yellow bird of mercy landing to rescue people and take them to hospital. It saves countless lives. In my constituency, the Dorset and Somerset Air Ambulance saves lives as we have no motorways as such, at least not in Dorset, and our roads are narrow, which means that getting down them is extremely difficult. It is especially important, therefore, for us to have that air ambulance cover.

Which air ambulances pay VAT on fuel and which do not—I hope I am being accurate because I know we like to be accurate in the House—is a matter of who owns and operates them. As has been said, owner-operators—those who own and operate the helicopter directly through their charities—are seriously disadvantaged. Because they are VAT registered they must pay VAT. In contrast, leased aircraft, operated through a third party, such as Bond Aviation, which is the case for the Dorset and Somerset Air Ambulance, which bills for a total service, including fuel, are exempt under an agreement with HMRC in 2005.

[Tracey Crouch]

It is worth pointing out that not every helicopter that is leased is done so with the fuel included. Some air ambulance helicopters are on a lease agreement, such as the Kent air ambulance, but that does not include the fuel.

[Richard Drax]

I totally accept that. I am not saying that they are all the same. I am looking for some harmonisation. I am not for one minute saying that we should not tackle the VAT issue. However, it seems from my research that there are some anomalies in the system.

Of the 18 charities, operating 29 helicopters, 12 operate such leasing agreements—admittedly, as my hon. Friend said, under different arrangements. For example, our Dorset and Somerset Air Ambulance pays no VAT, while our neighbouring Devon Air Ambulance pays £3,000 a year, which is about the cost of a mission, give or take a few pounds. The situation is clearly deeply unsatisfactory, with thousands of pounds of hard-raised money being squandered needlessly. I would have thought that some harmonisation would resolve the issue.

Overall, the Association of Air Ambulances must pay £100,000 every year in VAT. That rises with every increase in the price of fuel. That sum would pay for about 30 mercy flights to road traffic accidents and medical emergencies and for urgent hospital transfers. As has been said, this is not really about money; this is about saving people’s lives.

It is interesting how many of our valuable services in this country are charitable. Think of our armed services. These are men and women whom we send to places such as Afghanistan who are relying on charity to be looked after. That begs another debate altogether.

I hardly need point out that charging VAT on fuel for our air ambulances is an EU initiative. In a characteristic Catch-22 situation, the EU VAT directive allows no zero-rating provisions, except for those that were in place in 1975. Again as we have heard this afternoon, there were no air ambulance helicopters in the UK in 1975. Only the RNLI has been allowed exemption from duty charges on marine diesel due to its life-saving role—no different, in effect, from that of the air ambulances. With such a precedent already set, it seems an obvious and relatively inexpensive step for HMRC to extend this exemption to helicopter emergency air services.

The Association of Air Ambulances has suggested three solutions, each of which I would commend to the Minister. The first is a total exemption for all helicopter emergency medical services. The second is a refund arrangement provided by HMRC for air ambulance charities. The third is for new legislation to exempt air ambulances from VAT, as with the RNLI.

As all hon. Members have said, this is a worthy cause, and, frankly, the sums of money are a pittance when one looks at the Government’s overall expenditure. I cannot think of a better cause in the big society. That is not a phrase I entirely endorse, but I would use it in this case, because it conjures up the worthiness, bravery and dedication of those who crew the ambulances and the lives that are saved, and, importantly, the knock-on benefits to the families of those who have been injured and who can continue to live their lives with their fathers, mothers, brothers and sisters because they have been rescued by this exemplary service. I hope that common sense prevails today.

Beer Duty Escalator

Richard Drax Excerpts

Monday 2nd July 2012 Commons Chamber

[Gavin Williamson]

The worst thing we could possibly see is the growth of the illicit trade and the Chancellor of the Exchequer getting none of the money whatsoever. We want to make sure that people are paying their taxes and their duty, but we do not want to tax people out of the market.

[Richard Drax (South Dorset) (Con)]

May I add a slightly solemn note to what has been a light-hearted debate? I had a great friend, David Woodhouse, the chairman of Hall and Woodhouse in Blandford, who died aged 49 of a heart attack, running his company. He said to me on many occasions that he could not understand why Governments, and ours in particular, were proposing this tax every year, given that it is a tax on jobs at a time when we are trying to increase jobs. Surely that must be a point for the Government to take away from this debate.

[Gavin Williamson]

My hon. Friend touches on an important point: this is not only about jobs, but about British jobs. Some 68% of the drinks that our pubs sell are beers, so this duty is having a detrimental impact on every one of our pubs. Furthermore, 86% of all that beer that is consumed is produced in this country, which compares with a figure of 0.2% for wine.

Section 5 of the European Communities (Amendment) Act 1993

Richard Drax Excerpts

Tuesday 24th April 2012 Commons Chamber

[Mr Hoban]

It is not appropriate for any of us to provide a running commentary on the French presidential elections, but it is important that Governments, whether inside or outside the euro, make their argument as to why they believe that the measures required to bring about fiscal stability and economic growth are necessary. Those arguments need to continue to be made, because that is vital to Europe’s long-term interests. We will wait and see what the outcome of the French presidential election is and what the view of the new President is on the fiscal compact.

[Richard Drax (South Dorset) (Con)]

What will the Minister tell the millions of people in the eurozone when it goes horribly wrong—as it will—and their lives are ruined, given that we have had the chance, as has been suggested, to rebalance the euro from a position of control? It will collapse.

--- Later in debate ---

[Kelvin Hopkins]

I am not as skilled as the hon. Gentleman in using the internet. Old-fashioned though it may be, I go to shops and buy books, I am afraid.

As for the Budget, the reality is that it will not solve our economic problems. Our problems are not really about the deficit; they are to do with unemployment. Looking back, another time when we had an enormous public debt and enormous deficits was the second world war, after which the then Labour Government ran a full-employment economy, which was the way they overcame our problems. If our Budget was directed towards creating employment, we too would solve many of our problems. The important thing is to generate directly in labour-intensive areas, which are not expensive. We are talking about relatively low-paid workers in the public services or the construction sector—labour-intensive sectors with low import content, which are just the sort of sectors where we want to be generating. However, public services and construction are the very sectors we are cutting.

If we had a massive Government-driven house building programme, along with the creation of more public service jobs, we would bring down unemployment and people would be paying taxes rather than living on benefits, and over time the deficit would solve itself. That is what the Labour Government did after 1945. We were living in Keynesian times then, and I think that Keynes was absolutely right. I like to think that if he were here now, he would be saying what I am saying, albeit possibly in a more sophisticated way.

[Richard Drax]

Perhaps the hon. Gentleman could say where all those homes would be built. I believe the last Government had a target of some 1.8 million, but I recall that something like half were on a floodplain. Where are we going to build all those homes?

[Kelvin Hopkins]

That is a problem for Ministers and local authorities, but it has been estimated that we need another 4.5 million homes over the next few years if we are going to house our people. However, I will not go into that now, because I want to talk about the European Union.

I do not agree with the Budget—I think we ought to have a different one—but even if it were a good Budget, I nevertheless do not think that we should necessarily be required formally to send it to the European Union. I say that because the motion before us refers to the European Communities (Amendment) Act 1993—the Maastricht Act—which, I am pleased to say, my party voted against. Indeed, some Government Members voted against it as well. It is the Act that requires us to send the report to the European Union. Personally, I do not feel bound by that, because my party voted against it, and I do not think it is sensible anyway.

However, let us return to the stability and growth pact, which, as I have suggested, is like building castles in the air. What stability? What growth? We have grotesque instability at the moment—terrifying instability, in fact—and absolutely no growth. Indeed, even the powerhouse economy of Germany has serious problems. There is talk of convergence, but who do we want to converge with? Greece? Portugal? Some of the countries that are actually contracting, with mass unemployment? In Spain there is even talk of unemployment rising to 6 million, which, as a proportion of the population, is the equivalent of 9 million in Britain. This is absolutely insane. I do not want to be “disable-ist” about this, but anybody running that economy must want their head examined, quite frankly.

Amendment of the Law

Richard Drax Excerpts

Wednesday 21st March 2012 Commons Chamber

[Richard Drax (South Dorset) (Con)]

Perhaps it is appropriate that I should follow the right hon. Member for Tottenham (Mr Lammy). He certainly made a thought-provoking speech. I would just make the point that what we need to do, surely, is to create the environment for jobs, so that that large percentage of his constituents, the black population, can get a job. Until we create the right environment for jobs to be created, there will not be jobs for anyone in this country, whatever colour they are.

I congratulate the Chancellor on his Budget, which was delivered in quite trying circumstances. It has been pointed out that a lot of it was leaked before his statement in the Chamber. It has been delivered in circumstances in which, due to Labour’s undoubted profligacy and the world banking collapse—which I accept played a part—there is little room for manoeuvre. There is still less room for manoeuvre because we are constrained to a certain degree, whether we like it or not, by our coalition partners.

I therefore warmly welcome the good news. I welcome the reduction in corporation tax and the higher personal tax allowance. I welcome the reduction in the top rate of income tax from 50p to 45p. I particularly welcome the extra investment in our armed forces, and especially in their accommodation. Having served myself, I well recall the abysmal standard of much of the accommodation in the 1980s. I am also mightily relieved that we have left our beleaguered pension system alone. It would have been madness to tread on that particular nest at the moment. The right hon. Member for Kirkcaldy and Cowdenbeath (Mr Brown) did so, and we all remember the consequences.

The 50p rate has engendered a lot of heat, and I can understand where that heat is coming from. I remind the House, however, that it was introduced in the dying throes of the Labour Government as a political move. It was, in effect, an elephant trap; it was well laid, politically, and it is a nightmare to climb out of. We had hoped to come into power as a Conservative Government, but that did not happen. We need to be bold, and I wish that we had gone further and reduced the top rate in the emergency Budget, but we did not. Yes, everyone should pay their fair share of tax, but the top 1% in this country already pay 28% of all income tax, and the top half pay 90%. Milking them of their rewards for all their hard work and aspiration will hardly encourage endeavour, and spending the money that we take from them on a bloated, runaway welfare state is sheer madness. This is the politics of envy. The Institute for Fiscal Studies estimates that, by the next election, one in four of us will be paying tax at 40%. Not so long ago, that figure was one in 20.

As Tories, we must remember what we stand for: less state, less red tape, less taxation, less government, less public spending, more enterprise, more wealth creation and more support for business. We remain deeply in the red, thanks in large part to Labour. Public sector debt is still at £1 trillion, and borrowing will be £120 billion this year. We need that

“forensic, relentless focus on growth”

promised by our Prime Minister. We must encourage that. We should not only cut taxes but slash them. We must release business from all its constraints. We often proclaim that we are open for business but, as Willie Walsh writes in The Daily Telegraph today, the Chinese laugh when they hear that.

The Federation of Small Businesses in the south-west came to see me recently, and begged for more help from the Government. Small businesses are struggling with high fuel costs, as other hon. Members have mentioned, and I regret that we cannot go much, much further in cutting fuel taxes. Small businesses are also struggling with high business rates, with a lack of infrastructure and with banks that are refusing to lend. We have heard those stories repeatedly in the House. The national loan guarantee scheme for small businesses that was announced yesterday will provide credit at a lower rate of interest, but access to that credit is as difficult as it has always been. Indeed, the FSB said yesterday that the scheme is not a “game changer”, yet that is exactly what we need now. We need really radical policies. We must be brave; we simply cannot go on tinkering at the edges.

Most of all, we need to cut state spending; many inroads into it have been made, but in my view we have not gone far enough. We need to take the state out of people’s lives. This is a Conservative philosophy, and, I believe, a right one. The public sector as it currently stands is unaffordable.

I regret that we have made changes to child benefit. At whatever level the “cliff edge”, as it has been called, is set, many hard-pressed, hard-working families will be worse off. I heard my right hon. Friend the Member for Hitchin and Harpenden (Mr Lilley) saying—on “Newsnight”, if I recall correctly—that he looked at that from every angle some years ago, but could not see how to alter it. What I say, however, is that it is disingenuous to suggest that poorer families were or are subsidised by the better-off, because the better-off pay a higher rate of tax. There must be other ways to give families with children some help—without the unintended consequences. Perhaps a system of tax allowances rather than benefits could be examined.

We must also admit that much of the pressure on public expenditure is ultimately due to immigration. Immigration in this country is at an unacceptably high level, putting huge pressures on this country and her services, and we are struggling to keep our roads and rails going and to provide enough housing. In the longer term, it is unsustainable. A sudden increase in birth rates means, I am told, that we will need 540,000 new primary places by 2018.

Finally, I cannot leave the European Union out of my speech, because it is inflicting a high price on business in this country. We can say a lot here and we can have aspirations here to release our business and let it fly, but we will never get what we want or the jobs and wealth we need to generate until we are free of the red tape from Brussels. Only then can we break free from the shackle of deficit that hangs around our neck. When we have, the important thing to do is to spend only what we earn.

European Budgets 2014 to 2020

Richard Drax Excerpts

Tuesday 8th November 2011 Commons Chamber

[Richard Drax (South Dorset) (Con)]

What a pleasure it is to follow the right hon. Member for Belfast North (Mr Dodds). It is an honour, indeed, and I entirely agree with everything he said.

It is encouraging to hear our Front-Bench team mention words such as “resolve”—a word that seems to have disappeared from the English dictionary for a while. I wish they would follow up their words with action. What further evidence do we—the Government, the country, the world—need to see to show that this whole federalist nightmare is not working? It is undemocratic and corrupt.

I have people in my constituency who are trying to borrow £10,000, £20,000 or £30,000 to keep their businesses and jobs going. They simply cannot get it. Yet we are prepared to give Greece—and, I suspect, Italy—billions and billions of euros to a cause that is lost. It is quite beyond me, quite beyond my constituents and quite beyond most people in this country.

Both motions being debated today will, in their own ways, grant further powers and resources to the EU —despite our best intentions. We have heard that the Government have succeeded in reducing the annual budget increase from 2011 from 6% or thereabouts to 2.9%. I welcome that. Like my hon. Friend the Member for Stone (Mr Cash), I hope that it will remain at that level.

As to the multi-annual financial framework, these words are marvellous, are they not? The MFF—a slip of the tongue could get one into all kinds of trouble—now commands our attention. I am relieved that the European Scrutiny Committee has recommended that these documents are seen in this House. Only here can such decisions be taken. The absence of precise details about the Commission’s proposal is concerning, and I note that because of that absence, the European Scrutiny Committee has suggested that we focus on the Commission’s expenditure ambitions and revenue proposals.

The Government estimate that the overall MFF budget represents an average increase of £13.5 billion a year over the period. The UK contribution to the MFF between 2014 and 2020 is provisionally estimated to be 14.5% pre-rebate and 11.5% post-rebate. I agree with the Government that such extravagance is completely unacceptable, particularly when the level of public debt in member states will be 50% more than it was in 2007. The Commission argues that much of the increased expenditure is already committed to EU-wide projects, and suggests that there will be no increases in administration costs. That is hard to believe, given that the Government identified £1.1 billion of administration costs in this year’s budget alone. I am glad to hear that there is no possibility of the UK’s agreeing to the level of expenditure contained in these documents.

The revenue proposals are equally serious. For obvious reasons, the EU’s ultimate aim is to finance the budget entirely from so-called “own resources”—which are, of course, nothing of the sort, and will become so only after the EU has levied a series of new duties, taxes and tariffs on member countries for its own benefit. The documents suggest a financial transaction tax, a financial activities tax, the auctioning of revenue from the EU emissions trading scheme, an air transport tax, a new VAT, an energy tax, and an EU corporate income tax. That is utter madness. It is for us in this House to decide issues of national sovereignty. The European Commission deludes itself in stating that such measures do not affect our right to rule ourselves. Document 12478/11 states:

“It should also be stressed the proposals for new ‘own resource’ have no impact on national sovereignty.”

I strenuously disagree.

Finally, there is the question of the rebate. Perhaps most important is the suggestion that the current financing system must

“simplify the existing correction mechanisms”.

In plain English, that means the UK rebate, which is now in the Commission’s sights. Our relative prosperity is held against us, as is the open-ended nature of the rebate, but without it our net contribution to the EU as a percentage of national income would be twice as large as France’s contribution and 50% larger than that of Germany.

In these dying seconds, I urge the Government please, please to begin to stand up for our country and our future.

Eurozone Financial Assistance

Richard Drax Excerpts

Tuesday 24th May 2011 Commons Chamber

[Chris Heaton-Harris]

I honestly do not think so.

In the most basic terms, voting for the original motion will not mean that we are no longer liable to contribute to bail-outs via the EFSM. Worse than that—as I have said—because the Government signalled they were not likely to accept the original motion, it would in all likelihood have fallen, and therefore, far from this House having put its foot down, it would not have had a view at all. My amendment merely recognises that reality. It does not build up false hope that we can simply stop being involved in these matters, but it does send a message to Government that I hope will be reflected in the ongoing debates on them: that this House wants there to be a eurozone-only arrangement in the future.

Too regularly in this place and elsewhere, those of us who question various aspects of our relationship with the European Union march our supporters to the top of the hill only to find that we are outnumbered and outfoxed, and are then valiantly and gloriously defeated. We need to get real.

[Richard Drax (South Dorset) (Con)]

Perhaps we are led to the top of the hill and then let down by parliamentarians who do not have the guts to stand up for their country.