Schedule 13 - Tax relief for expenditure on vaccine research etc

Finance Bill – in a Public Bill Committee at 9:45 am on 23rd May 2002.

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Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs 9:45 am, 23rd May 2002

I beg to move amendment No. 5, in page 207, leave out lines 18 to 20 and insert—

'(1) This Schedule applies to expenditure incurred on or after 1st April 2002.'.

Photo of Roger Gale Roger Gale Vice-Chair, Conservative Party

With this it will be convenient to discuss amendment No. 6, in page 209, line 38, leave out from 'after' to end of line 39 and insert '1st April 2002'.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

These are simple amendments. We see no reason, nor has one been advised to us, why the provision should not take effect straight away but should be left in the ether to be implemented at some unspecified time. The amendments would therefore ensure that the start date is the beginning of the present tax year.

Photo of Mr Paul Boateng Mr Paul Boateng Financial Secretary, HM Treasury, The Financial Secretary to the Treasury

I can give the hon. Gentleman the assurance that he seeks. There is no danger whatever of the provisions being left in the ether, as he so picturesquely describes it. I assure the Committee that we intend the measure to be implemented as soon as we have the necessary state aid approvals. It is necessary to get state aid approval, but we have every confidence that the Commission will give it. However, as it may affect competition in trade between European Union member states, it is necessary to obtain such approval. We propose bringing the provisions into effect on a date appointed by the Treasury, which we expect will be soon after receiving approval.

The measure is intended, as we have indicated, as an incentive to industry to commit new resources to discovering vaccines and medicines for the prevention and treatment of those diseases. They know that it is coming. They are doing work in that area and know that we are seeking Commission approval. There is no uncertainty or doubt as to our intentions. I hope, with that assurance, that the hon. Gentleman will not press the amendment to a Division.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

I thank the Minister for that response. May I cheekily ask, in what I trust will be the unlikely event of the proposals being ruled out of order by the European Union on competition grounds, that the Government consider the alternative of specific grants being made to specific companies on the ground that it would be purely humanitarian expenditure?

Photo of Mr Paul Boateng Mr Paul Boateng Financial Secretary, HM Treasury, The Financial Secretary to the Treasury

The measures are as likely to be refused by the Commission as the hon. Gentleman is to disappear into the ether. We can be absolutely sure that both of them will be around for a considerable time. I hope—with my assurance of his fate as well as

the fate of the measures—that the hon. Gentleman will not feel the need for me to give him such an undertaking.

No one can doubt the commitment of the House and the Government to the cause of development aid and global health. I have every confidence that the Commission will give the necessary approvals as the measures are consistent with Community objectives. Therefore, the scenario that the hon. Gentleman paints, in which it is necessary to fill the gap with grants, will not occur.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

I thank the Minister for his reply and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 13 agreed to.

Schedule 14 agreed to.