Philip Hammond to lift VAT from Scottish police and fire services
Reports Chancellor's Budget set to lift Police Scotland and Scottish Fire and Rescue out of VAT after pressure from Scottish Conservative MPs
Police Scotland - credit Ninian Reid
Philip Hammond is set to make Police Scotland and Scottish Fire and Rescue exempt from VAT today, according to reports.
The creation of national Scotland-wide institutions four years ago meant the two bodies continued to pay £35m a year in the tax, despite local services elsewhere in the UK being exempt.
The Scottish Government and SNP MPs have repeatedly called for the disparity to be addressed, but UK ministers have said the SNP understood the implications of merging the bodies before approving it.
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A senior Tory source told Holyrood's sister site Politics Home that the move was due to "intense lobbying" from Scottish Conservatives.
"It shows the difference in approach taken by the SNP MPs and the Scottish Conservative group," the source said.
"The SNP created a situation in the full knowledge that a national police force would not be exempt from VAT.
"At the time, they argued that savings from the merger would outweigh the loss of the VAT exemption. They then turned it into a grievance, shouted loudly and achieved nothing. In contrast, what the Scottish Conservatives have done is work behind the scenes to get a result."
Scottish Conservative MP Kirstene Hair told the BBC: "The decision to centralise the police and fire was the SNP government's, and they were told about the financial impact of their actions.
"As a Scottish Conservative group we have been able to discuss the VAT issue with the Treasury and press the case to fix this."
"Our priority here has been to sort this out so we can support our emergency services for the future."
As well as calling for the lifting of VAT from the services, the SNP has also called for the suspension of the roll out of Universal Credit and the end of so-called 'austerity'.
The party's Westminster leader Ian Blackford MP said: "With little progress on the UK's negotiations to leave the European Union - coupled with the chaos engulfing Theresa May's cabinet - the Chancellor has the opportunity to address some of the running sores which are so damaging to our economy and our society.
“Philip Hammond must take the chance to provide clarity for business – and central to that is keeping the UK in the Single Market.
“This budget must finally address the failings of the last decade, and the damage done by a Tory government whose right-wing austerity politics have held back economic growth, and left millions of people poorer and less secure."
The Chancellor also announced a £2bn increase to the Scottish budget, support for oil and gas and progress on city deals
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Speaking in Edinburgh the First Minister will argue that, with immigration essential to maintaining Scotland’s population, “the case for a different approach here is, to my mind, overwhelming”