New
Clause
6Gifts
inter vivos (1) Omit section
82(5) and (9) of FA 1985 (adjudication of certain gifts inter
vivos). (2) Accordingly, omit
paragraph 9 of Schedule 14 to FA
1999. (3) The amendments made
by this section have effect in relation to instruments executed on or
after 13 March 2008, other than instruments effecting a land
transaction (within the meaning of paragraph 22 of Schedule
32). (4) For the purposes of
section 14(4) of the Stamp Act 1891 (instruments not to be given in
evidence etc unless stamped in accordance with the law in force at the
time of first execution), the law in force at the time of execution of
such an instrument shall be deemed to be the law as varied in
accordance with this section..[Jane
Kennedy.] Brought
up, read the First and Second time, and added to the
Bill.
New Clause
7Abandonment
expenditure: deductions from ring fence
income (1) FA 1991 is
amended as follows. (2) Section
64 (relief for expenditure incurred by a participator in meeting
defaulters abandonment expenditure) is amended as
follows. (3) In subsection
(1)(a) (a) omit
(as set out in section 107 of this Act),
and (b) for
sub-paragraph (1)(a) substitute sub-paragraph
(2). (4) In subsection
(1)(b) (a) for
sub-paragraph (4) substitute sub-paragraph
(2), and (b) for
qualifying substitute
contributing. (5)
In subsections (2), (3), (4) and (5) (in each place), for
qualifying substitute
contributing. (6)
Section 65 (reimbursement by defaulter in respect of certain
abandonment expenditure) is amended as
follows. (7) In subsection
(1)(a) (a) omit
(as set out in section 107 of this Act),
and (b) for
sub-paragraph (1)(a) substitute sub-paragraph
(2). (8) In subsection
(1)(b), for sub-paragraph (4) substitute
sub-paragraph
(2). (9) In subsections
(1) (in each place), (4), (5) (in each place), (6), (7) (in each place)
and (8), for qualifying substitute
contributing. (10)
The amendments made by this section have effect in relation to
expenditure incurred after 30 June 2008..[Jane
Kennedy.] Brought
up, read the First and Second time, and added to the
Bill.
New
Clause
8Qualifying
expenditure: R&D relief and vaccine research
relief (1) Paragraph 5 of
Schedule 20 to FA 2000 (R&D tax relief: staffing costs) is amended
as follows. (2) In
sub-paragraph (1)(b), after company;
insert (ba) the
compulsory contributions paid by the company in respect of benefits for
directors or employees of the company under the social security
legislation of an EEA State (other than the United Kingdom) or
Switzerland;. (3)
Before sub-paragraph (1A)
insert (1ZB) In
sub-paragraph (1)(ba) social security legislation means
legislation relating to any of the branches of social security listed
in Article 3(1) of Regulation (EC) No 883/2004 of the European
Parliament and of the Council of 29 April 2004 on the co-ordination of
social security systems (as amended from time to
time). (4) Schedule 13
to FA 2002 (vaccine research relief) is amended as
follows. (5) In paragraph 2
(qualifying
expenditure) (a) in
sub-paragraph (1)(a), at the end insert
or, (b) omit
sub-paragraph (1)(c) (and the or before it),
and (c) omit sub-paragraph
(4). (6) In paragraph 6
(qualifying expenditure on sub-contracted research and development),
omit (a) in
sub-paragraph (1), the second sentence, and
(b) sub-paragraph (3) (expenditure on research
sub-contracted to a charity, a university or a scientific research
organisation). (7) Omit
paragraph 12 (qualifying expenditure on contributions to independent
research and development). (8)
Omit paragraph 25 (refunds of qualifying expenditure on contributions
to independent research and
development). (9) Accordingly,
in paragraph 3 of Schedule 8 to this Act (changes to rates of vaccine
research relief), omit sub-paragraphs (2)(e) and
(3)(d). (10) The amendments
made by this section have effect in relation to expenditure incurred on
or after such day as the Treasury may by order
appoint. (11) Paragraph 10(4)
of Schedule 13 to FA 2002 (time limit for giving notice of election for
connected persons treatment) does not apply to a notice of an election
under that paragraph in relation to sub-contractor payments
if (a) the
sub-contractor falls within paragraph 6(3) of that Schedule (repealed
by this section) (charity, university or scientific research
organisation), and (b) the
notice is given before the end of the period of 12 months beginning
with the day appointed under subsection
(10)..[Angela
Eagle.] Brought
up, and read the First
time.
The
Exchequer Secretary to the Treasury (Angela Eagle): I beg
to move, That the clause be read a Second
time. I
do not intend to detain the Committee long, since this is a wholly
beneficial clause. The Committee will recall that in an earlier
sitting, changes to the research and development tax credit and vaccine
research relief were agreed, including an enhancement of the rate
of R and D credit for large companies and small and
medium-sized enterprises. Those enhancements are accompanied by minor
changes to the rules governing the small and medium-sized R and D
credit and the vaccine research relief, which are notifiable state
aids, to comply with the state aids
framework. Following
further discussions with the European Commission, three further small
changes to the schemes are necessary. The new clause introduces those
changes, which are necessary to secure state aid approval. I can
confirm to the Committee that, subject to these changes, the European
Commission has now approved all the improvements to the R and D credits
scheme and the vaccine research relief scheme, increasing the R and D
credits generosity by some £180 million per year. If the clause
is approved, we will implement the improvements from the earliest
possible date after Royal Assent, which we hope will be 1 August this
year. I commend the new clause to the
Committee. Mr.
David Gauke (South-West Hertfordshire) (Con): It is a
great pleasure, Sir Nicholas, to serve once again under your
leadership. It seems such a long time since I was last standing here
and even longer since we debated research and development and vaccine
research reliefit was a whole Test series ago.
I have only
a couple of comments on the provisions, the first part of which, as the
Exchequer Secretary said, relates to EU anti-discrimination legislation
and changes to make the Bill compliant with that. The issue relates to
allowing the equivalence of national insurance contributions paid in
the European economic area to count for research and development
staffing costs and
ensuring that relief is available in the same way as it is within the
UK. Will the Minister confirm that this is for EU purposes and there is
no intention to make the provision worldwide? It will apply only for
the EEA and Switzerland, I
believe. My
second point is on vaccine research relief. The provisions, as I
understand them, stop vaccine research relief being subcontracted to an
independent body by way of contribution to their research. In other
words, a company would not be able to pay a university £100 to
do research on vaccines and get a £150 deductionto use
those numbers as an illustration. Presumably the intention is to make
sure that research is subsidised only if it is carried out directly by
the company and under the control of the company. Presumably for the
benefit of universities and companies researching vaccines, the
Government want to encourage co-operation. We have a tremendous
resource in our universities and it is frustrating that sometimes our
companies may not use universities as much as they might. One could put
it another way and say that universities may not always be in a
position to assist companies as much as they could. There are strong
arguments for encouraging greater co-operation between those two parts
of our economy in fields such as vaccine research, but the new clause
appears to hamper that development.
The
Government may argue that the vaccine research relief should be
available only when the research is done by the company itself.
However, if the best entity to do the research is a university or a
third party, why should the relief not be available? If we wish to
encourage expenditure on vaccine research, and encourage companies in
that field to grow through the quality of the research undertaken, why
make the way vaccine research relief works a barrier? That is my point,
and I would be grateful for clarification from the Minister on the
thinking behind the new clause. Does she recognise that there is
concern and that further explanation is
needed?
Angela
Eagle: First, I can confirm that the hon.
Gentlemans interpretation of the changes to the R and D relief
with respect to national insurance contributions is
correctrelief will be paid for costs in EEA countries and
Switzerland, but not worldwide. He is right, as I mentioned in my brief
opening remarks, that it is a state aid issue and, therefore, there is
no requirement or intention to extend the changes worldwide.
The hon.
Gentleman is wrong about the vaccine research relief, however. The
changes do not prevent relief for research that has been contracted to
universities or charitable companies. The change aligns the treatment
of those bodies with that of other subcontractors, and it moves the
relief available to them down from 100 per cent. of the costs to 65 per
cent. Again, that was a technical issue about state aid approval. It is
still possible for a company, charity, university or subcontracted
scientific research organisation jointly to elect to be treated as
connected parties and claim the full amount of costs incurred. It is an
alignment, not a ban.
Mr.
Gauke: I am grateful for clarification that the provision
is not a ban as such; none the less, it is an alignment that makes
using universities for vaccine research less attractive. That is a fair
interpretation of the new clause.
Angela
Eagle: It makes it slightly less attractive, but at
present nobody has used it in its more attractive state. Vaccine
research relief is a small and limited scheme, which deals only with
TB, malaria and certain strains of HIV. It is not a general issue, and
even at 100 per cent. relief we have seen no use of it. We are not
worried about the practical effect of the
alignment. Question
put and agreed to.
Clause
read a Second time, and added to the
Bill.
New
Clause
10VAT
on beverages The Treasury
shall, not later than six months after the passing of this Act, prepare
and lay before the House of Commons a report setting out the estimated
costs to the Exchequer, and the estimated health benefits to the
population of the United Kingdom, of reducing the amount of VAT payable
on beverages containing fruit juice to the lowest level
permitted..[Justine
Greening.] Brought
up, and read the First
time. Justine
Greening (Putney) (Con): I beg to move, That the clause be
read a Second time.
It may be
helpful if I spend a brief time talking about the background as to why
the issue has arisen. I shall then talk about the picture at present,
beverages and food generally and then about why I think the mew clause
is important in that
context. First,
let us talk about the state of the nations health, which is
ultimately the background to our tabling the amendment. The provision
would obtain a fact base for the Government to understand to what
extent VAT could be used to encourage healthy eating. Across the
nation, healthy eating has risen up the political agenda dramatically,
certainly over recent years, for a number of reasons. The main reason
is many peoples sense that the state of our nations
health is getting steadily worse, particularly in terms of avoidable
ill health. The situation is worse than it has been for some time,
perhaps worse than it has ever been. One only has to look at some key
statistics for obesity on the Department of Health website to start to
understand the magnitude of the problem and its implications.
The latest
statistics, which I think are from 2006, show that 24 per cent. of the
adult population in England is already classified as obese. Although
that is weighted equally between male and female populations, women are
more likely to be morbidly obese than men. My understanding is that if
current obesity levels continue to rise as they have done, about 60 per
cent. of men and 50 per cent. of women will be clinically obese by
2050.
We know the
impact of obesity on people and on public finances. For the individual,
obesity unfortunately comes with a whole bundle of negative health
impacts. Conditions such as type 2 diabetes, heart disease and even, it
would seem, some types of cancerendometrial, breast and
coloncan to some extent be attributed to excess body fat.
According to the Department of Health, 9,000 premature deaths each year
in England are semi-related to obesity. There are broader effects such
as the impact of ill health on peoples ability to work
productively and the fact that they also have higher sickness
rates.
More
worrying is the picture of obesity in children. Almost one fifth of all
children under the age of 16 are classed as obese, and the figure is
expected to rise to 25 per cent. by 2050 if these sorts of
trends continue. It is deeply worrying.
The problem
is not just the lack of healthy eating. There is also a problem
regarding lack of exercise. The extent to which people are taking
regular exercise is declining, or at best static. Many of us who live
in London are hoping that the 2012 Olympics will be used as a positive
spur to encourage people to take exercise. Looking at the NHS
statistics, just 40 per cent. of men and 28 per cent. of women met the
minimum recommendations for physical activity in adultsat least
30 minutes of activity on at least five days a
week.
5
pm Patrick
Hall (Bedford) (Lab): I know that the hon. Lady is being
serious and I take the subject that she is talking about seriously, but
could she assist us all by coming to an early conclusion on the matter
so that we can all go to the gym?
|