VAT: Independent Schools
Ben Spencer Excerpts(1 month, 2 weeks ago)
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James Murray
I have given way quite a lot, so I am going to make a bit of progress.
Alongside the announcements about VAT, the Government announced in July that private schools in England with charitable status would lose their eligibility for business rates charitable relief from April 2025, subject to parliamentary passage of the legislation. Those changes were set out in a technical note that was published online alongside draft VAT legislation, which together formed a technical consultation. As part of that consultation, the Government—both at official and ministerial level—have engaged with a broad range of stakeholders, including the devolved Governments.
We have listened carefully to the points that people have raised with us. We recognise that while this policy will raise revenue to help support improvements in the state education sector, it may lead to increased costs for some parents and carers whose children are in the private education system. However, let me be clear: while private schools will now be required to charge VAT on the education services and vocational training they provide, we expect that most private schools will be able to absorb a significant portion of this new VAT charge and keep fee increases affordable for most parents. They will be able to make efficiencies and recover the VAT they incur on the things they buy. Those recovered costs can be used to offset increases for fee payers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
I had a pop at getting the Minister to give way during the debate this morning, and I appreciate his doing so now. I love the irony of what he is saying, which is, “We need to do this to raise all this money, yet it isn’t actually going to raise all that much money because it can be reclaimed.” On the impact assessment, it is really interesting that one line in the consultation document that went out this summer says:
“The government understands that moving schools can be challenging.”
How many of his own constituents have contacted him to say they will have to move schools as a result of this policy, and how do we measure the damage that moving schools is going to cause for so many children in our constituencies?
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Families and schools in my constituency are deeply concerned about this policy. They have contacted me to underline the pressure that it will put on them. Many have already started applying for state school places. Our independent schools reckon that about 5% to 10% of their students will move into the state sector. As we have heard, the measure will have a disproportionate impact on kids with SEND.
In my constituency, roughly 8,000 children are educated in the independent sector. That means a lot of pressure on local state schools. A lot of kids who have their special educational needs met by independent schools are now applying for EHCPs, which means extra pressure on assessments and provision. I support all my schools; I am aspirational for all the children in my constituency. This policy, if enacted—as I expect it will be—will cause great harm.
I would like the Minister to be able to quote back data, analyses and stats to me, and to say, “Ben, you’re wrong. Don’t worry your silly little head—it’s all going to be fine, and here is the data to back it up.” But he cannot; the data is not there because the Government have not done the analysis. This debate has, sadly, been driven by ideology. About one in five children are educated at independent schools in my patch. I must declare that I have chosen independent education for my children.
We will really suffer from this policy. The Under-Secretary of State for Education, the hon. Member for Portsmouth South (Stephen Morgan), is a good man. I know that Members across the House, especially new Members who are finding their feet in this place, are starting to think about policies and decisions going forward. I say to them, as I said to the Minister: “If you cannot see the data and analysis for this policy, please ask why.” Please ask for it.
Mr Richard Quigley (Isle of Wight West) (Lab)
Listening to the Conservatives and the amount of fearmongering they do, one might think that a previous Government had totally trashed the state sector; I think that is quite obvious.
Dr Spencer
As I said, schools in both the independent and state sectors are concerned about the policy and the sudden movement of children, in the middle of the year, into the state sector, which will struggle to find them places. Those children may be studying for exams and have already experienced covid disruption, and the state schools that they move to might not have the right courses. I plead with the Minister to look at the data and do the analysis to see if the policy will make money or lose it, and to consider the impact on children.
I go back to the brutal, bitter words of the consultation document that went out this summer:
“The government understands that moving schools can be challenging.”
If I were a child going through my GCSEs or A-levels, and was forced to move into the state sector because of this policy—the analysis of which I cannot see, because the Government have not done it or will not publish it—and I read those words, I would say, “Please delay this policy. Think again. Look at it, and try to mitigate the impact on children with special educational needs, on armed forces families, and of disruption during the school year. Please, if you are not going to stop it, at least delay it and do the working out.”
Independent Schools: VAT and Business Rates Exemptions
Ben Spencer Excerpts(1 month, 2 weeks ago)
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Ben Coleman (Chelsea and Fulham) (Lab)
I am amazed by the Conservative Opposition’s chutzpah when they talk about special educational needs. No one would have thought that they had been in power for the last 14 years and overseen the running down of the system so that it is almost impossible to get an education, health and care plan—these days, 98% of tribunals award plans against councils. We have a system without special educational needs co-ordinators. We have a special educational needs system that, thanks to the legacy of the Conservative Government—14 years of decline— is failing.
I speak as someone who was for 14 years the governor of two special schools near my constituency. I am proud of what the last Labour Government achieved: £1 billion into services for disabled children and young people and their families, and lots of new rights for those people. Under the Conservatives, we have gone backwards, and the situation in the special educational needs sector is dire. As a result, young people cannot get the EHCPs they need.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
Will the hon. Gentleman give way on that point?
Ben Coleman
Let me make a little bit more progress. Cash-strapped councils are having to send their constituents’ children to private schools because state provision is not available. Parents from my constituency have written to me saying that their only reason for sending a child to a private school to meet their dyslexia, neurodivergence or other needs is not that they are ideologically in favour of doing so, but that they cannot do anything else. The provision is not there locally, and that is because of 14 years of Conservative decline. It is absolutely extraordinary.
Dr Spencer
Bearing in mind that around 15% of children in independent schools have special educational needs and only around 5% have an EHCP, given the move back into the state sector that this policy will cause and given the hon. Gentleman’s experience and personal concern about EHCPs, will he be voting against the policy?
Dr Ben Spencer (Runnymede and Weybridge) (Con)
It is a pleasure, Dame Caroline, to serve under your chairmanship and I thank my hon. Friend the Member for Bromsgrove (Bradley Thomas) for securing this important debate. I am so pleased to speak in it.
I support all our schools and I am proud to have a range of independent schools in the Runnymede and Weybridge constituency. I declare an interest: my children, like one in five children in my constituency, go to an independent school.
I want to take the opportunity that we have today with a Treasury Minister responding to the debate, because Treasury Ministers are all over numbers and impacts. I am pleased to see that it would seem that, following the election, the Treasury has looked at Labour’s manifesto commitments and actually thought about them, to the extent that we are starting to get various leaks and stories that it will abandon them. I hope that the Treasury will do the same thing with this awful policy.
I know that a Treasury Minister will not make a decision without an impact assessment and I am sure that the Exchequer Secretary will express his concerns about the absence of an impact assessment for this policy. However, while he is considering what the impact of the change—I hope he comes to the Dispatch Box to tell us the numbers around it—let me share some information from my constituency, where about 7,500 to 8,000 children attend independent schools.
My schools tell me that about 5% to 10% of these pupils will move because of the imposition of a tax on education. That means there will be far more pressure on our local state school system and there will also be disruption for those children. It also means that the 10% to 15% of children with special educational needs who do not have EHCPs will start seeking them, which will mean more cost for the taxpayer and more transfers between schools, which would be a backwards policy. Most egregiously of all, the Government are going to do that halfway through the educational year, with no consideration for our constituents’ GCSE, A-level and baccalaureate exam results. Will the Minister think again and persuade the Secretary of State for Education to abandon this ridiculous policy?
James Murray
I am going to make some progress. Those recovered costs can be used to offset the increases to feepayers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents. Members have asked today why we will introduce this policy in January 2025. The reason for doing so is simple: we want to raise the funding we need as soon as possible to deliver our education priorities to state schools across the country.
James Murray
I do not have much time and I need to address the other points that hon. Members have made in this debate. Importantly, a January 2025 start date means that schools and parents will have had five months to prepare for the VAT change. HMRC is ready to ensure that schools are supported in delivering this change. To respond to the shadow Minister’s comment, HMRC will put in place a number of measures to ensure that all private schools can be registered ahead of 1 January 2025, including publishing bespoke guidance on gov.uk ahead of 30 October, updating registration systems and putting additional resource in place to help process applications.
Ahead of the policy being implemented, the Government have carefully the considered the impact the changes will have on pupils and their families across both the state and private sectors, as well their impact on state and private schools. The Government’s costings of this policy are currently being scrutinised by the independent Office for Budget Responsibility. The Chancellor will confirm our approach to the measures at Budget, where we will set out our assessment of the expected impacts of the change in the normal way.
We recognise, as some hon. Members have raised, the changes may lead to some pupils moving into the state education sector. However, we believe that the number of pupils who may switch schools as a result of the changes will represent a very small proportion of overall pupil numbers in the state sector and such switches will take place over several years. We are confident that the state sector will be able to accommodate any additional pupils.
Winter Fuel Payment
Ben Spencer Excerpts(2 months, 1 week ago)
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Peter Swallow
Three million food parcels were distributed last year. That is the legacy of the Conservative Government. And the triple lock that the Conservatives purport to defend? They broke it in 2022.
I also support the extension of the household support fund to help the families most in need this winter, as well as the Government’s commitment to introducing tougher regulation to the energy market, which has let customers down for too long. I am working hard with Bracknell Forest council to ensure that pensioners in the Bracknell constituency who are in need but not claiming the support to which they are entitled are identified and encouraged to get help. I urge any pensioner who is concerned about their finances to go to Age UK’s benefits calculator to see what support they may be entitled to.
Dr Ben Spencer (Runnymede and Weybridge) (Con)
What did the hon. Gentleman say to pensioners during the election campaign?
Peter Swallow
I said that the Labour party would restore the broken economy inherited from the Conservative party.
In the long term, there is only one permanent solution to ending fuel poverty: we must end our dependence on volatile foreign energy markets and deliver lasting energy security. The Conservative party failed to do that in Government, leaving energy bills higher for every household, including those most in need. That is why this Government’s plan to create GB Energy, a new national energy company, is vital. It will bring energy supply back into the hands of the British public and help to get prices back under control. That is the long-term solution to fuel poverty: home-grown, British-controlled power.