Finance Bill

Debate between Chris Vince and Damian Hinds

2nd reading
Wednesday 27th November 2024 Commons Chamber

[Damian Hinds]

On three counts, I am afraid that is incorrect. First, it does not cover everybody with special needs at a private school. Secondly, the IFS has not said that there is ample space in state schools, nor could it possibly know that. Thirdly, and most importantly, the point on which I was heckled, and on which I invited somebody to intervene, was a completely different one. My point was that unlike in quite a large number of countries, here there is no tax break for those using independent education providers. Everybody contributes towards state education through general taxation; if we take up a private school place, that contribution does not reduce.

In the modelling that goes with the Finance Bill, the Government say that they expect a little over £1.5 billion to be raised from the measure in maturity. We do not know the detail of the modelling and how robust the analysis is. However, I agree, intuitively, with the Treasury that a small part of the effect will be felt immediately in January, but that the effect will really start from September 2025. It will be felt gradually, through some children leaving the independent sector; the bigger effect will probably be from those who do not start in the independent sector in the first place, or who do not start their next phase of education in the sector.

I am not totally clear from what the Treasury has published whether it factors in all the effects of the change. It obviously factors in families who are directly priced out of the independent sector, but what about those who are indirectly displaced, because they were at a school where a number of other families were priced out and the school had to close? Does it factor in the higher number of education, health and care plan applications that will be made, and the much higher than average per-place cost that the state will have to meet for those displaced?

I am also unclear whether the Treasury’s analysis looks at all the effects on independent education cumulatively. Yes, there is the VAT, which is in the Finance Bill, but there are also a number of other measures being taken this year that materially affect the cost base of independent schools, and that is likely to be reflected in fees. They include the increased contribution to the teacher pension scheme; business rates changes, which affect about half of independent schools; and the massive hike in employer national insurance contributions, which will affect so many sectors.

All those are transfers from the independent state sector to the Exchequer, so the real increase in the cost base for that sector will be considerably more than 20% over the course of the year. In the Minister’s summing up, I would love her to tell us what assumption was made about the total average price increase. Whatever it was, the Government calculate that, in the policy’s maturity, 37,000 children will be displaced from the independent sector, and of those, 35,000 will go to the state sector. Ministers say, “Don’t worry; there are loads of places available in the state sector.” In fact, the hon. Member for Barking (Nesil Caliskan) suggested that a third party had said that as well, and the Exchequer Secretary said it again in his remarks. He said that we are talking about 0.5% of the total population in state schools. It is useless to have places available in primary schools in inner London if that is not the age group of people leaving the independent sector. The effect will be uneven across the country, and need is concentrated largely in secondary schools and sixth forms.

There are plenty of places where even a small number of children being displaced from one sector to the other could have a big effect on the state school system. What discussions have Ministers had with colleagues, and with councils in Salford, Stockport, Sale, Bury, Bedford, Bristol and so on? I could name considerably more. What contingency plans are in place?

[Chris Vince]

indicated dissent.

[Damian Hinds]

The hon. Gentleman shakes his head. I take it that means that he has not had those conversations. [Interruption.] I am happy to take an intervention from him. What contingency plans are in place for September if the displacement is greater than anticipated? We know that the money will follow the pupil if more pupils turn up in the state sector, but we have not heard whether that money is coming out of general Exchequer receipts—in other words, that the Department for Education will not be expected to find that money from elsewhere in its budget. Similarly, what are the contingency plans, and what capital has been set aside in case extra capital funding is needed? As well as the displacement of pupils, there is also potential displacement of teachers, as we have heard from the unions.

[Chris Vince]

As the right hon. Gentleman encouraged me to intervene, I will agree that there will be a movement of teachers from the private sector back to the state sector. As a former teacher, I know a number of former colleagues who left the state sector because of the failings of the last Conservative Government, and they are considering going back into state education only because of the hope that the new Labour Government have given them.

[Damian Hinds]

Well, we shall see. As a teacher, he will know that teachers move between the state and independent sectors all the time. They move in both directions, but that is not what the Association of School and College Leaders was talking about. It was talking about the fact that the change is being made mid-year, and said that it carried a risk of redundancies, and of the permanent loss of teachers to the profession.

Labour Members—the hon. Member for Harlow (Chris Vince) is one of them—frequently like to say to Opposition Members that we have to choose. They say: “Are you on the side of the many or the few? Are you with 94% or the 6%?”. Well, we refuse to choose. It is not a question of whether we care about the 94% or the 6%. We care about the 100%—all the children. It is definitely true and right that at the Department for Education—this was true when I was a Minister there—Ministers spend way more than 94% of their time and effort on the state sector. In our time in government, between 2010 and 2024, that paid off with huge results. When we supported our brilliant teachers in their great work, our results went up. We went from 27th in the world to 11th for maths, and from 25th in the world to 13th for reading. We had the best primary school readers in the western world. Free school meal eligible children were 50% more likely to go on to university, and the number of schools rated less than good was down from one in three to fewer than one in 10. That was through supporting teachers, academy trusts, a broad knowledge-rich curriculum and the propagation and spread—from school to school and teacher to teacher—of proven methods, such as maths mastery and synthetic phonics.

Yes, the system does also need money. Per-pupil funding under the last Government was higher than it was under previous Labour Governments. Among the G7 nations, it was middle of the range in cash per child, and the highest as a proportion of national income. Of course, we have to keep increasing the resourcing that we put into key services, none more so than education, but the Conservatives did that as a priority from general taxation, not by taking from another part of the wider education system. I repeat: the Government do not have to choose. These are all children.

Education and Opportunity

Debate between Chris Vince and Damian Hinds

Wednesday 24th July 2024 Commons Chamber

[Damian Hinds]

I admire the hon. Gentleman’s ability to turn everything into a discussion about Europe, but I have to tell him there are other things at play. If I were an SNP politician, I would not come to the Floor of this House boasting about the record of the SNP Government given their woeful performance on behalf of underprivileged children in Scotland. Nor, by the way, would I be complaining about the finances, when the Scottish Government are well financed for the things that they should and must do. Until recently it was us sitting on the Government Benches making these points, but now it will be Labour Members.

This is a debate about opportunity, and the point of greatest leverage in spreading opportunity is what happens in the very earliest years, as the Secretary of State said. Since 2010, we have had five major extensions in early years and childcare entitlements, and a sixth is now on its way. I think I heard the Secretary of State say that she was committing fully to our plan in each of its phases. Unless she corrects me now, that is certainly how I will interpret it. She then went on to say there were some difficulties and so on—[Interruption.] I can assure the Secretary of State, who speaks from a sedentary position, that there was indeed such a plan, and we look now to the Government to see that plan through. I would also like to hear from her colleague the Minister of State, Department for Education, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), when she sums up, about the 3,000 nurseries to be established in primary schools. It is important for us to know what proportion of those she expects to be full-time, year-round nurseries as opposed to term-time only.

We know that however much time young children spend in nursery or in childcare, they will spend more time at home, and the social mobility literature is clear that what happens at home makes a big difference to opportunity later in life. This is a difficult area for Governments and requires great care, but I hope that this new Government will look to build on the home learning environment programme—Hungry Little Minds—that we put in place and then reprised during covid, and do so in a supportive and non-invasive way.

I also hope that the Government will continue with the family hubs, recognising that while they are vital for the 0 to 2 age group, many issues go on right through childhood and adolescence. The supporting families programme is actually a cross-party story because it was brought in during the Cameron Government from 2012 following a pilot under the previous Labour Government. With its key worker approach it has so much potential, and it now covers 300,000 families, not the original 120,000. Bringing it into the Department for Education presents a great opportunity for the Secretary of State, and I hope she will make the most of it.

In schools, the success story we have been discussing, which can be seen in the results in the programme for international student assessment, the progress in international reading literacy study and other studies, has been based on three legs of a stool. The first is school autonomy, with transparency and accountability. The second is a knowledge-rich curriculum and proven learning methods such as phonics and maths mastery, with the Education Endowment Foundation evaluating and accrediting programmes. The third is the spreading of good practice through academy trusts and through schools learning laterally from other schools, with teachers learning from teachers rather than things being imposed top down, through a nationwide network of hubs in key subjects and in key areas such as behaviour. It is not yet clear exactly what the new Government’s plans are in each of those three areas, but if they seek to undo what has worked and what does work, we will argue the counter case robustly.

The Government have, as the Secretary of State said, announced a review of the curriculum, as of course they can, and as we did in the past. But again, I would urge them to reflect on what has worked and what does work, and in particular not to see a conflict between skills and knowledge. Clearly, when children are growing up, developing and being educated, they need both, but it is through having a depth of knowledge that they best develop skills. As to what knowledge, I hope the review will also acknowledge that a strength of our national curriculum is that, unlike what a lot of people think, it is not in fact a detailed specification of everything a pupil will learn in history or literature. Rather, it is a framework. That guards against political interference, and that is a principle that absolutely must be maintained. I hope that Labour did learn the lesson of the literacy hour and the numeracy hour—that seeking to set out to schools in 10 or 15-minute segments exactly what should be taught to children is a Bad Idea, with a capital B and a capital I.

On behaviour, a calm and ordered environment is a basic requirement for learning, and that is what children tell us they want. Of course, no one wants pupils to be suspended, still less expelled, but that option needs to be available as a last resort. Yes, we must think of the child’s wellbeing, but we also need to think of the wellbeing and life chances of the other 27 children in the class.

Having school leaders in the driving seat is essential, but that also brings a need for transparency so we can see whether children in some areas are not getting as strong an education as children in others. Progress 8, which we brought in, measures the progress of all children equally and is far better than the blunt and much-gamed approach of measuring how many children got over the five-plus C-plus at GCSE hurdle. It is also materially better than the old contextual value added measure, which effectively lowered expectations for entire groups of children.

We also need a threshold to trigger intervention, so that underperforming schools can be moved into a strong trust that can better support them. That is standing up for parents and children, who will get only one shot at schooling.

There are challenges to address and, as I said to the hon. Member for Oldham East and Saddleworth (Debbie Abrahams), high on that list post covid is attendance. It is much better than it was, but there is further to go. I hope the Government will keep and build on the measures that we put in place, together with schools and the wider education family.

We always need to strive to do more to support children with special educational needs and disabilities and enable them to maximise opportunity. I was encouraged by what the Secretary of State said. I call on her and the Government to keep and grow our capital programme for more special school places, as well as, as she rightly said, to strive to support inclusion in mainstream education, where that is possible and beneficial.

Today there is a greater prevalence of mental ill health in young people. Crucially, this issue is not specific to this country. We see it in most comparable countries, or at least those where there is data we can look at; we see a similar trend there. The Labour manifesto spoke about having mental health professionals in schools. When we were in government, with the Department of Health and Social Care and the NHS, we were already rolling out mental health support teams to clusters of schools and I urge the Government to look at that.

Of course, we and other countries must also ask why there is this increased prevalence of mental ill health in young people. Because it is international in nature, some of the ready answers that might otherwise be thrown about cannot be correct. We will work constructively with the Government as they work to build on the landmark Online Safety Act 2023, for example, and ensure its most effective implementation.

Schools are all about teachers and we welcome the Government’s plan to recruit 6,500 more. Of course, 6,500 is a large number, but it is not quite so large in the context of the total number of teachers, which is 468,000, and it should be noted that the increase in the number of teachers over the last Parliament was considerably more than 6,500—in fact, it was more like 15,000. However, it is true that it has been tough to recruit for some subjects, such as computer science, physics and modern foreign languages, and I welcome the Secretary of State’s focus on that area.

[Chris Vince (Harlow) (Lab/Co-op)]

Will the right hon. Gentleman give way?

[Damian Hinds]

If the hon. Member will forgive me, I had better press on, as I might be stretching Madam Deputy Speaker’s patience. Early in my time facing her in the Chair, I do not want to get off to a bad start.

We will be looking to see exactly what the 6,500 target covers, by when and, crucially, how it will be achieved.

The one subject in education that got a lot of coverage in the media and elsewhere during the election campaign was the taxation of independent schools. We recognise that that was in the Labour manifesto, but it is still wrong-headed. It will not hit the famous big-name schools, but it will hit small-town schools, families of children with special educational needs and certain religious faiths. Most of all, in the biggest way, it will hit state schools. We do not know how big the displacement effect will be of families who can no longer afford to send their children to their independent school, and we cannot know because there is no precedent, but we know that it will be a material number.

--- Later in debate ---

[Damian Hinds]

We must not get into a long debate on this, but my hon. Friend is absolutely right that export earnings is part it, as is multinationals’ choice of this country to site their headquarters. All these things are considerations, including the Ministry of Defence.

I inadvertently skipped over the hon. Member, so I give way to him now.

[Chris Vince]

I thank the right hon. Member for taking my question. His figures on teacher numbers are very interesting. Does he not recognise that, over the last Parliament, the teacher retention rate was at an all-time low, with a third of teachers leaving within five years of going into the profession?

[Damian Hinds]

Again, I must not get into too lengthy a debate on this—[Interruption.] But I can. In the last couple of years, we actually found that retention was better than had been anticipated. We want teachers to stay longer in the profession, which is one of the reasons why, during my first spell in the Department for Education, we brought in the early career framework specifically to address that issue. The Secretary of State has said that the Government will continue to evolve that, which I welcome too, but the fact of the matter is that we have 468,000 teachers in the profession. Part of that is to do with retention, and part of it is to do with people returning to the profession, which at times has been better than anticipated. It is also to do with the significant programme to get people into teaching in the first place through bursaries and scholarships.

Returning to taxation and independent education, I ask the Minister of State, Department for Education, the hon. Member for Newcastle upon Tyne North (Catherine McKinnell), at the very least today when she sums up, to confirm that the Government will not bring the measure further forward so that we end up with in-year disruption for families, and for state schools trying to cope with a potential influx of large numbers of children. Can she also guarantee that the large number of spending programmes that have been linked to this taxation income stream, including the 6,500 teachers, are protected, regardless of what happens on that VAT income?

I am close to the end. We set about a major upgrade in technical and vocational education. The Secretary of State said something important and, I think, new about what was going to happen. I hope the Government will see through T-levels and the reform of technical and vocational education on the blueprint—we always did this in government: we took a cross-party approach—of Lord Sainsbury. The Secretary of State mentioned that she will update the House tomorrow. Will the Minister of State confirm in summing up that that will be an oral statement, giving hon. and right hon. Members a chance to question the Minister on exactly what is proposed?

We will also scrutinise the Government’s proposed changes to apprenticeships and the levy. I understand that businesses want more flexibility on what they can do with levy money, but the two crucial things about the apprenticeship levy is that, first, it dealt with what economists call the “free rider problem,” under which some businesses historically invested strongly in training their staff, while others did not, but benefited when staff left those businesses to join them after two or three years. Secondly, the levy ensured that human capital investment went into incremental training; it did not just rebadge training that would have happened anyway. In whatever reform the Government undertake, those two things will have to be delivered.

On Skills England, we just need to know what it is. We understand the desire of a Labour Government to say, “In an emergency, break glass, reach for quango” but what will it do that is different from what is done today by the Institute for Apprenticeships and Technical Education, by local skills improvement plans and by the Unit for Future Skills?

I am proud that disadvantaged youngsters are now much more likely to go on to higher education than they were—despite of course predictions of the opposite at the time the student financing system was brought in. I remember very well that, when in opposition, Labour Members of Parliament said repeatedly that fees should never go as high as £9,000, or £9,250, and we will be watching for consistency in their approach in the months and years ahead.

We need to ensure high-quality provision for students. It does no favours to a young person to go to university if it is for a course where we know a high proportion of students do not even complete the course. We spoke during the election campaign of our plan to build on our foundation of the Office for Students to ensure that, in whatever subject it might be, students could be confident that their course was of high quality. The new Government need to set out how they, in their way, will ensure that that quality is guaranteed.

To conclude—[Hon. Members: “Hooray.”] Come on. It is often said—it was said earlier this afternoon—that the first duty of Government is to defend our country and our national security and to keep people safe. It is the most fundamental function of Government to have sound management of the economy and the finances. The noblest drive in government is to strive to spread opportunity as far and as equitably as possible. Ultimately, education is the key to almost everything. We wish the new Government and this team of Ministers well. We will work positively and constructively with them. We will scrutinise what they say, monitor what they do and hold them to account for what they deliver.