The Finance Bill will be debated in the House of Commons next week

Opposition front-benchers have launched a bit to stop mountain rescue teams paying the increased VAT rate announced by the Coalition Government in George Osborne’s emergency budget last month.

The volunteer teams already pay about £200,000 a year in VAT despite being unpaid charity teams. The 79 volunteer teams in England, Scotland and Wales face having to raise extra funds to pay the increased rate of tax, which is due to rise from 17½ per cent to 20 per cent in January next year.

Now, Labour Shadow Chancellor Alistair Darling and his opposition treasury team have tabled an amendment to the Finance Bill currently going through Parliament. If successful, it would freeze the VAT rate for charities’ ‘non-business activities’ such as the rescues carried out by the cave and mountain rescue organisations.

Leading the campaign is Shadow Chief Secretary to the Treasury Liam Byrne, who said today on his blog: “Labour has tabled a series of amendments to the Finance Bill to protect mountain rescue services from the government’s VAT hike,” and calling on his Government counterpart, LibDem Danny Alexander, to protect mountain rescue teams.

The Finance Bill had its second reading in the House of Commons on Tuesday and will now go to a committee stage in front of the whole house next week.

Mr Byrne today told the Guardian that UK charities will face a bill of £143m because of the rise, with small charities such as the mountain rescue teams being disproportionately hit.

The increase in VAT is estimated to put an extra burden of more than £28,000 on the mountain rescue teams, some of whose members actually pay an annual fee to their team to fund equipment, and all of whom, apart from the three RAF teams and three police teams, receive no Government funding in England and Wales. The Scottish Government provides about £300,000 to support the 28 teams north of the border.

Bolton Mountain Rescue Team’s leader Garry Rhodes said the VAT increase would have a considerable impact on its volunteers’ work. He told the Bolton News: “In organisations like ours, the rise in VAT will have quite an impact.

“We are now losing even more money to the Government when we are providing an essential service.”

One estimate of the saving to the Treasury of Britain’s mountain rescue teams is £6m each year. The volunteers turn out to civil contingencies such as the Grayrigg train disaster, the Cumbrian floods and casualties in inaccessible urban areas, in addition to the core of their work rescuing stricken climbers, cavers, mountaineers and walkers.

MP Tim Farron: 'Its a cheap ask'

Many teams also help on searches for missing vulnerable people and the Cumbrian teams were used in searches for bodies following Derrick Bird’s gun massacre in the county on 2 June. The teams were used extensively to support emergency services who were struggling in the most severe winter conditions for decades recently.

The Liberal Democrats had pledged to support the teams in their general election manifesto, stating explicitly they would ‘refund VAT to mountain rescue services’. But the coalition agreement drawn up in the wake of the election between the Conservatives and LibDems had no mention of such a move. Tim Farron, the LibDem MP for Westmorland and Lonsdale, and a long-time supporter of the mountain rescuers in his area, was optimistic at the time that there would still be some move. He told grough in May: “I was given very positive signals that this wasn’t the type of detail that would go in.”

“This is not one of the things we [the LibDems] had to give way on. I am optimistic that we will get it. It is a cheap ask for something that is such great value and I can’t see why they would say no to it.

“We can get round the European Union rules and they can then claim back a grant for the same amount. We are continuing to lobby. We haven’t had a yes, but we haven’t had a no.”

Chief Secretary to the Treasury Danny Alexander had expressed his support for mountain rescuers before his appointment to the Coalition Government. In a pre-election statement the Inverness, Nairn, Badenoch and Strathspey MP said: “It isn’t possible to put a price on the work mountain rescue teams do in the Cairngorms and all over the Highlands, not to mention the whole UK.

“The expertise and local knowledge which is given freely by volunteers could not be replaced.

Chief Secretary to the Treasury Danny Alexander. Photo: Dave Radcliffe CC-BY-ND-2.0

“Everyone who enjoys our outdoors owes them a debt – and severe winter conditions like we have seen this year bring their skills into use in an even wider range of circumstances, working closely with the police.

“It has never been right that a vital service which relies on donations from the public and extraordinary commitment from volunteers gets hit by the Government for a sizeable tax payment.

“The [Labour] Government has resisted calls for VAT exemption, arguing that it would not be allowed by European law, but it is absolutely clear that VAT paid could be refunded. The cost to the exchequer is small, but the difference is enormously significant for mountain rescue teams.

“Whatever the result on Thursday, I hope this is a policy which will be put into action.”

However, since joining David Cameron’s Government, Mr Alexander has been silent on the issue.

Meanwhile, mountain rescuers may need to mobilise as much support for the amendment as possible to get their MPs on side before the bill is heard next week.

grough’s calls to Tim Farron and to Danny Alexander’s offices had not been returned by the time of publication.