Fiscal Policy: Defence Spending

Baroness Smith of Newnham Excerpts

Monday 3rd February 2025 Lords Chamber

[Baroness Smith of Newnham (LD)]

My Lords, the Question referred to fiscal policy, and although there may not have been a change in the relationship with the United States, there has been an impact on His Majesty’s Armed Forces. Such children are being sent to private school not through the parental choice that might be made in the civilian sector, but to ensure they can have a secure education while their parents are serving. The cost of education has just gone up through VAT. Is that not a problem? Could the MoD not talk to the Treasury about it?

[Lord Coaker (Lab)]

On VAT on school fees and the impact on military families, as the noble Baroness, Lady Goldie, just pointed out, the Government have increased the continuity of education allowance, which now meets some 90% of the increase in fees that military families will face as a consequence of the VAT rise. That allowance is there to support military families in the way she said, and the VAT increase has been met in a way that is consistent with that policy, through the uplift in the allowance to 90%.