Clause 36 - Health service bodies: exemptions

Finance Bill – in a Public Bill Committee am 2:30 pm ar 4 Mehefin 2013.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Question proposed, That the clause stand part of the Bill.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

The clause is a short, technical one, which ensures that certain health service bodies created by the Health and Social Care Act 2012 will be exempt from corporation tax, as their predecessor bodies were. As I understand it, that would include the new clinical commissioning groups and the three bodies whose status the Act has changed from special health authorities to non-departmental public bodies: the Health and Social Care Information Centre, the NHS Commissioning Board and the National Institute for Health and Care Excellence.

The Minister is well aware of the Opposition’s views on the 2012 Act. I am sure we do not need to repeat debates we had in other places about that Act, although we retain our concerns, particularly those about turning the NHS into a full-blown commercial market and about the danger of putting competition before patient care. The Government’s own estimates have now put the cost of implementing the reforms at some £300 million more than originally planned—the cost will be around  £3.5 billion in total. There has been a wide range of criticism from various groups, including the chief executive of the NHS, the British Medical Association, the Royal College of Nursing, the Royal College of General Practitioners, the Patients Association and a long list of many others. It is clear that there are still many concerns about the reforms.

I have no doubt that we could have debated the rights and wrongs of the Government’s reforms to the NHS all day, once again, had that been the proper thing to do, but, as I said, our views are well known. Despite strong opposition both inside Parliament and across the country, that Act is now part of our legislation. However, for the sake of transparency, will the Minister give us his assessment of the cost to the Exchequer of the measure in the clause? On a technical point, will he also confirm, for the record, that the NHS Commissioning Board referred to in the Bill is actually the newly renamed NHS England? I believe there have already been some exchanges on that issue. Is there any likelihood that there could be any confusion, and if so, should there be more formal clarification?

Photo of David Gauke David Gauke The Exchequer Secretary

As we have heard, the clause makes changes to ensure that certain NHS bodies are exempt from corporation tax. I shall provide hon. Members with some brief background to the clause.

The Health and Social Care Bill announced an extensive reorganisation of the structure of the NHS. Among other things, it created new bodies to take over responsibility for commissioning health care. As separate corporate bodies, they would be liable to pay corporation tax. The Health and Social Care Bill also changed the status of two existing special health authorities, making them non-departmental public bodies. Although those two bodies continue to provide the same services as previously, their change in status now makes them liable to corporation tax. The clause exempts all relevant bodies from corporation tax, ensuring that their treatment is consistent with that of all other health service bodies, as well as with the treatment of their predecessor bodies.

The clause provides an exemption from corporation tax for clinical commissioning groups and for three NHS bodies: the NHS Commissioning Board, the Health and Social Care Information Centre and the National Institute for Health and Care Excellence. Those bodies were established either by the National Health Service Act 2006 or by the Health and Social Care Act 2012. The new bodies are not undertaking any activities that are likely to be chargeable; the exemptions, therefore, provide certainty that, despite being bodies corporate, they will not come within the charge to corporation tax for any period.

To answer one of the questions raised by the hon. Lady, I can confirm that there is no cost as a consequence of this measure; as the tax information impact note makes clear, there is a nil impact on the Exchequer. As for her question on whether the NHS Commissioning Board is essentially NHS England, yes, that is correct, but we do not believe that that causes any particular difficulties with the wording of the clause; for legal purposes, there should be clarity there.

I hope that that provides sufficient clarification to the Committee and that the clause may stand part of the Bill.

Question put and agreed to.

Clause 36 accordingly ordered to stand part of the Bill.