Finance Bill

Debate between Ben Spencer and James Murray

Committee of the whole House
Wednesday 11th December 2024 Commons Chamber

[Dr Ben Spencer (Runnymede and Weybridge) (Con)]

I must declare that I, like many parents in Surrey, have chosen independent education for my children. A freedom of information request earlier this week regarding empty school places in Surrey showed that in the ’25-26 academic year, there are zero spare places in year 9, zero in year 10 and zero in year 11. The Minister will know that in independent schools, many children in those years take international GCSEs and baccalaureates. What is his message to those children, who have no place and will have their exam training disrupted because of his spiteful policy?

[James Murray]

Local authorities and schools already have processes in place to support pupils who move between schools at any point in the academic year. Analysis carried out by the Department for Education under the previous Government suggests that each year, almost 60,000 secondary school moves take place not at normal transition points or over the school holidays. We fully expect the majority of moves to take place at natural transition points or in the school holidays, rather than within the school year.

I have been clear that ending these tax breaks for private schools has been a difficult decision, but it is necessary to secure additional funding that will help us to fulfil the commitments we made to improving education for all.

VAT: Independent Schools

Debate between Ben Spencer and James Murray

Tuesday 8th October 2024 Commons Chamber

[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?

Independent Schools: VAT and Business Rates Exemptions

Debate between Ben Spencer and James Murray

Tuesday 8th October 2024 Westminster Hall

[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.

[Dr Ben Spencer]

Will the Minister give way on that point?

[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.