(3 weeks, 3 days ago)
Commons ChamberNo, independent schools do pay tax on supplies. No tax is charged on education, whether in an independent school or in other settings, and that is a very long-standing principle.
Let me clear up one very important definitional point, which I ask colleagues to reflect on. There is no tax break involved. It would be a tax break if a person who had a child at an independent school and was not taking a place at a state school were charged less tax as a result. That does not happen in the United Kingdom. Everybody contributes to state sector education, whether or not they take up a place.
The principle of no tax on learning is a fast one, and once we loosen it, we do not know where we will go. Where might the Treasury look next? Private nurseries, perhaps? Music lessons? Private tutoring? What is the philosophical difference between independent school education and private tutoring?
Let me make a point to demonstrate how rushed and ill thought through this policy is. My understanding is that if a child in a nursery has turned five but the other children in the class have not, all the parents in that nursery year will have to pay VAT on their child’s nursery fees. That is how badly this has been thought through.
My hon. Friend is right. That comes from the rushed nature of the legislation. The sloppy drafting means that children who are not of school age get dragged into this tax if they happen to be in the same room as children who are, and there are concerns about what might follow in other borderline cases.
The Government claim that the policy is about revenue, not politics, but having read the Secretary of State’s twitterings, I think hon. Members could be forgiven for mistaking the motivation. It is entirely spurious, for multiple reasons, to link this tax to 6,500 teachers, mental health support or anything else. The money will go into general Exchequer receipts, and anyway, 6,500 teachers is not that many in the scheme of things, given the 468,000 there are now. That is a compound growth rate of 0.3% over five years—and, by the way, a lot fewer teachers than we recruited in the last five years. Mental health support teams are already being rolled out, and they cover primary schools as well as secondary schools. It is not clear what the difference is in the new Government’s policy on mental health support, other than that it will not include primary schools.
To the extent that the VAT revenue could be hypothecated, it looks a lot more like that revenue would reduce cuts to education resourcing, rather than increasing it. If the policy is about revenue, not politics, the Government could easily commit to one simple thing today. They are confident, they tell us, that the policy will raise a large sum of money and not create large costs. Will they commit to measuring and reporting back on that, and if it turns out, against expectations, that they were wrong, will they reverse it?