Clause 21

Part of Finance (No. 2) Bill – in a Public Bill Committee at 6:45 pm on 26th October 2010.

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Photo of David Hanson David Hanson Shadow Minister (Treasury) 6:45 pm, 26th October 2010

Clause 21 amends group 8 of schedule 8 to the Value Added Tax Act 1994. The amendment changes the criteria for zero-rating supplies of aircraft and associated supplies. We broadly welcome the clause and have no problems with it, so we will not be pushing the Committee to a Division.

None the less, I have some quick questions to ask the Minister to clarify a couple of points. The current definition of a qualifying aircraft also extends to supplies made to state institutions, and that is preserved. What discussions has the Treasury had with suppliers of aircraft and of parts and services for aircraft and aircraft operators as part of the consultation on this piece of legislation? Has the Minister received any representations from individuals on this issue? What assessment has he made of the financial implications of this change for the aviation sector in the United Kingdom as a whole?

Again, we have no great difficulty with the clause. As has been indicated, we are, through EU law, requiring zero-rating on supplies of aircraft used by airlines operating for reward chiefly on international routes. The relief extends to supplies of parts and equipment for such aircraft and for certain services such as repair or maintenance. I wish to know whether the Minister has had any representations and to hear from him about the points I have made in discussing the clause.