Fair Taxation of Schools and Education Standards Committee

Gillian Keegan Excerpts

Wednesday 11th January 2023 Commons Chamber

[The Secretary of State for Education (Gillian Keegan)]

My mission is to make sure that every child in this country gets a fantastic education and every opportunity to make the most of their abilities. My expectation of excellence is the same whatever the type of school and wherever it is in the country. A good education is not a battle of this school versus that school—at its most basic, it means giving every child the means to find their place in the world. My job is to make sure that schools do that, and independent schools have a valuable role in delivering that.

By the Opposition’s own account, applying VAT to independent schools might deliver £1.75 billion more per year for schools. The key word in that sentence is “might”. I gently suggest that “might” could be over-optimistic, or even economically illiterate. The Government recognise that a good education is the closest thing we have to a silver bullet when it comes to making people’s lives better, which is why we are putting an extra £2 billion into our schools next year and the year after. This will be the highest real-terms spending on schools in history, totalling £58.8 billion by 2024-25. [Interruption.] I hear a few mumblings of “2010” from the Opposition Benches, so let me put that into context. When we took office from Labour, the spending was £35 billion per year. For those following the maths, that is a 68% cash increase.

Under this Government, schools will not need tax changes to receive extra money; they will not have to wait. Without that policy, they will be getting it from April this year, and even more—£2 billion, as opposed to an optimistic £1.75 billion.

[Ruth Edwards (Rushcliffe) (Con)]

I thank the Secretary of State for giving way. It is a shame the shadow Secretary of State did not afford me the same courtesy—I thought a debate was an exchange of ideas. What the Labour party is actually proposing is to financially penalise parents for paying to educate their children. I would have thought that would affect the number of families who could afford to keep their children in the independent sector, and lead to an influx of children from the independent into the public sector. What assessment have the Government made of how much that would cost the taxpayer in net terms? My hunch is that it would actually cost more than it would raise, and therefore not only would the policy not deliver for everyone, it would not deliver for anyone.

[Gillian Keegan]

I thank my hon. Friend for her intervention, showing her economic literacy in full. I will get on to explaining some of the figures.

[Clive Efford (Eltham) (Lab)]

Will the Secretary of State give way?

[Gillian Keegan]

I am very happy to give way to the hon. Gentleman.

[Clive Efford]

This issue surely boils down to a moral argument. It is charitable status that gives independent schools their tax benefits, but what kind of charity requires a person to pay an average of £37,000 in order for it to benefit from tax breaks? Is that really a charity?

[Gillian Keegan]

There is the huge education benefit, but I think the hon. Member may have his maths a little wrong—I do not think the average is £37,000.

We are improving state-funded education, not undermining the aspirations or choices that parents have for their children. That is important. We are delivering a world-class curriculum for all schools, not attacking world-class institutions that secure international investment and drive innovation. We are driving school improvement, not driving small schools serving dedicated religious and philosophical communities out of business. We are providing the funding to schools that they need.

I am delighted that Labour decided to include school standards as part of this debate, as our record speaks for itself. In 2010, just 68% of schools were rated by Ofsted as good or outstanding, but we have taken that to 88%—hopefully the Members opposite are still following the maths—which is a vast improvement driven by the Minister of State, Department for Education, my right hon. Friend the Member for Bognor Regis and Littlehampton (Nick Gibb).

Moreover, the hon. Member for Houghton and Sunderland South (Bridget Phillipson) should join me in praising the work of this Government. Since we took office, schools in her local authority of Sunderland have gone from 67% rated good or outstanding to 91%. Meanwhile, 97% of schools in the Leader of the Opposition’s local authority now enjoy a rating of good or outstanding—I am sure he has thanked my right hon. Friend the Member for Bognor Regis and Littlehampton for his role in making that happen. The shadow Schools Minister, the hon. Member for Portsmouth South (Stephen Morgan), should also be grateful; when Labour was last in power, fewer than half of his local schools met that standard, but I am happy to share with the House that we have taken that dismal record and made it good—literally. Today, Portsmouth now boasts 92% of schools rated as good or outstanding. I want to take this opportunity to thank teachers, headteachers and support staff up and down the country for their incredible work over these years, as they have been the key drivers of this success. I can guarantee that we will not stop there.

Underpinning that record are improvements in phonics, where a further 24% of pupils met our expected standard in the year 1 screening. In just eight years from 2010, we brought the UK up the PISA rankings—the programme for international student assessment—from 25th to 14th in reading and from 28th to 18th in maths.

We will continue that trajectory as we build on the ambitions of the schools White Paper, which will help every child fulfil their potential by ensuring they receive the right support in the right place at the right time. This will be achieved by delivering excellent teaching for every child, high standards of curriculum, good attendance and better behaviour. [Interruption.] Somebody opposite mumbles “13 years”—I am sure that schools are delighted with the improvement I have just outlined over the past 13 years. We will also deliver targeted support for every child who needs it, making it a stronger and fairer school system.

Let us focus on the independent school sector. We are very fortunate in this country to be blessed with a variety of different schools. We have faith schools, comprehensive schools and grammar schools, to name but a few, all of which help to support an education that is right for children. The independent school sector itself is incredibly diverse. It includes large, prestigious, household names—in this House, we will all have heard of famous alumni from Eton—but there are 2,350 independent schools, and not many of them are like Eton. Reigate Grammar School, a fee-paying independent school that now charges £20,000 a year, once educated the Leader of the Opposition; like many in this category, it started as a local grammar and became independent. In fact, 14% of Labour MPs elected in 2019 attended private schools—double the UK average. I will be interested to see which of those hon. Members votes to destabilise the sector that provided the opportunities afforded to them.

As someone who did not benefit from such a prestigious educational background, I stand here focused not on the fewer than 7% of children who attend independent schools, but much more on the 93% who attend state-funded schools, as I did. As the Opposition wish to use parliamentary time on this issue, I would point out that the sector provides many benefits to the state and individuals alike. Independent schools attract a huge amount of international investment, with more than 25,000 pupils whose parents live overseas attending independent schools in the UK. As my hon. Friend the Member for Gosport (Dame Caroline Dinenage) pointed out, many could be working in our armed forces.

[Jonathan Gullis]

One of the greatest things I saw while working in the classroom, unlike those on the shadow Front Bench, was a scheme introduced under the Conservative Government by the former Minister for Children and Families, my right hon. Friend the Member for Stratford-on-Avon (Nadhim Zahawi), which provided looked-after children with scholarships and bursaries to some of the leading boarding and private schools across our country. Are schemes like that—giving those most deprived kids the very best opportunities—not under threat because of the Opposition’s dangerous ideological plans?

[Gillian Keegan]

Absolutely. We will always focus on the people we can help. The more people we can help through a diverse school system, the better.

The independent school sector also has an international presence, exporting services through campuses in other countries. The independent sector includes many settings that serve small, dedicated faith communities, some with lower per-pupil funding than state-funded schools.

[Alex Cunningham]

I am grateful to the Secretary of State for giving way. She said that she wanted every child to have an excellent teacher, and so do I, but two thirds of teachers are planning to leave the profession in the next two years because of unmanageable workloads. What is the Government’s answer to that?

[Gillian Keegan]

I am grateful to the hon. Gentleman. We have 460,000 teachers, which is more than we have ever had in our school system—in fact, 24,000 more. I am glad to introduce some facts to his argument.

The sector also includes special schools, where some places are state funded. That provides vital capacity for vulnerable pupils that could not easily be replaced. There are hundreds of independent special schools that provide world-leading specialist support to some of our most vulnerable children, whether that is hydrotherapy provision for children with physical disabilities; sensory experiences for children with autistic spectrum conditions or who are non-verbal; or invaluable one-to-one support for young adults with Down’s syndrome preparing to step out into the adult world.

Many hon. Members across the House will have someone in their family or know someone who benefits from those services, such as my nephew with Down’s syndrome and the son of my hon. Friend the Member for Guildford (Angela Richardson). More than 5% of children with an education, health and care plan rely on the provision offered by an independent school. Are the Opposition suggesting that we put VAT on those fees? Hopefully not—[Interruption.] I am delighted to hear that they would not as the policy evolves.

The Opposition’s proposed tax policy would create a number of different challenges across that diverse sector and the outcome is uncertain. The more affordable schools, many of which are former grammar schools, are likely to be at greater risk from an increased tax burden, and the closure of such schools would increase inequality and reduce choice for families. Many schools, when faced with a sudden hike in costs, are likely to seek to avoid passing on the full cost to hard-pressed families. Indeed, many might choose to reduce the bursaries and scholarships that broaden access to such places instead.

Almost 160,000 pupils at Independent Schools Council schools receive some form of bursary or scholarship. For clarity, Independent Schools Council schools represent only about half of independent schools, so the number of people receiving financial support is likely to be far higher. Any independent school closures or a reduction in bursaries would only increase the pressures on the state-funded sector. At the current average cost per pupil of £6,970, the projected cost of educating in the state-funded sector all the pupils we are aware of who receive some form of scholarship or bursary would be more than £1.1 billion. That does not factor in any additional capital or workforce costs to create places for those pupils.

In fact, research undertaken by Baines Cutler shows that, in the fifth year of the Opposition’s ill-thought-through policy, the annual costs would run an annual deficit of £416 million. Yes, hon. Members heard correctly: the policy could end up costing money. That could have been a contributory factor to the last Labour Government, during their 13 years in office, armed with a calculator and the figures, not implementing such a divisive policy.

[Bridget Phillipson]

The Secretary of State referenced the Baines Cutler report. Can she clarify who were the commissioners of that report and who tends to cite its findings?

[Gillian Keegan]

I would like to clarify that the figures that I used—160,000 pupils times £6,970—are our figures, so £1.1 billion is our calculation. The Baines Cutler report was commissioned by the independent schools sector. Of course, everybody in the sector, as in many other sectors, commissions research, but I hope that the hon. Lady is not suggesting that, because the report was commissioned, it did not have to be validated—of course, it would be. [Interruption.] If she wants to understand, it would cost £1.1 billion at the current average cost per pupil £6,970. I do believe that that is why previous Labour Governments did not implement the policy, because it would greatly undermine the benefit of any additional funding to the state sector, and it could result in Labour’s proposed financial benefit in fact being a net cost to the Exchequer.

I remind right hon. and hon. Members that two thirds of Independent Schools Council members—almost 1,000 of them—are engaged in mutually beneficial cross-sector partnerships with state-funded schools. Those schools share expertise, best practice and facilities to the benefit of children in all the schools involved. I thank my noble friend Baroness Barran, who is in the Gallery, for her work with independent schools to emphasise and grow those partnerships.

To give one example, Warwick School and King’s High School have worked together to support students to prepare for assessments and interviews to highly selective universities. An increasing number of independent schools also provide subsidised places for disadvantaged children through the Royal National Children’s SpringBoard Foundation’s broadening educational partnerships programme.

I am sure that the shadow schools Minister, the hon. Member for Portsmouth South, will be interested in my final example, which benefits teachers in his constituency—he does not appear to be that interested, but I will try. The Hampshire Physics CPD Partnership provides fully funded professional development workshops targeted at specialist and non-specialist physics teachers to support teaching at key stage 3 and 4. The partnership includes many schools and colleges in Hampshire, including UTC Portsmouth.

The proposals do not make financial sense; they do not make sense to parents and they certainly do not make sense to children in the sector. The Labour party’s policy is the politics of envy. In this Government, we do not have to level down to level up; I am not somebody who resents other people’s opportunity. As many hon. Members understand, I went to a comprehensive school in Knowsley that I could not boast about in the same way that the hon. Member for Houghton and Sunderland South does, because it sadly failed generations of children.

[Cat Smith (Lancaster and Fleetwood) (Lab)]

Will the Secretary of State give way?

--- Later in debate ---

[Gillian Keegan]

I will not give way; I think I understand my school better than most.

That is why I am hugely honoured to be in this role to support all children in any education setting to get the excellent education that they deserve. I do not want to level down anybody; I want to level up everybody. Our independent sector is a small but important part of our school system. It brings valuable international investment to the UK; it serves small, dedicated faith communities; it creates special school capacity; it drives innovation; it gives parents a wider choice; and its bursaries are a valuable tool for driving social mobility. We should not undermine that.

[Andrew Lewer (Northampton South) (Con)]

My right hon. Friend is making an excellent defence of the independent sector and its partnership work. Does she believe that Labour’s policy would also undo the fundamental principle that the UK does not tax the supply of education? Furthermore, there have been repeated references to “tax breaks” to mean simply not paying extra tax on top of the income tax that people already pay. That is a misleading description and should not be used to describe this ill-thought-out policy.

[Gillian Keegan]

I agree with my hon. Friend that there is lots that is misleading about the way the policy has been presented, and that the benefit of education is the reason it receives tax breaks.

It is not for the Government to determine the work of parliamentary Select Committees, but the motion proposes the setting up of a new Select Committee that would take up considerable parliamentary time and resources. If I am correct, the House published an estimated cost to the taxpayer of those Committees of £417,000, at the very least, in this calendar year alone. Furthermore, there is already a Select Committee empowered to look at these issues—one which I and my fellow Ministers regularly appear in front of—the Education Committee. I have no doubt that we will hear more from members of that Committee.

Our focus should rightly remain on improving standards at all schools, so we will continue to ensure that all state-funded schools have the funding they need to make sure every child receives the best education and opportunities possible. I remind Opposition Members of the £2 billion extra next year and the year after that was awarded in the autumn statement, as well as the figure for our overall spending on education of £58.8 billion as opposed to £35 billion in 2010. We will continue to ensure all state-funded schools have the funding they need so that all children receive the best education and opportunities possible. This proposal is the politics of envy. It is pulling the rug from under good independent schools in a weakly veiled, politically motivated, economically incoherent policy which will not help our mission to ensure that every child can reach their potential. We as the Conservative party do not level down; we focus on levelling up.

[Several hon. Members rose—]

--- Later in debate ---

[Cat Smith (Lancaster and Fleetwood) (Lab)]

It is a pleasure to be called so early in this debate. Since we are in the business of declaring where we went to school, let me say that I went to a comprehensive school in Barrow-in-Furness. The Secretary of State said that she went to a comprehensive school in Knowsley, but I invite her to explain what her Government are doing for more than half of the children in Knowsley who are failing their maths and English GCSEs. She is very welcome to intervene on me and explain what her Government are doing for those children in Knowsley, if she wishes. Would she like to do so?

[Gillian Keegan]

I am happy to intervene. The hon. Lady may have heard me say that, when I was at school, 92% failed to get the minimum of four or five GCSEs. I look at those schools very regularly and, yes, that has improved massively since then, but it is still nowhere near good enough. We are very much focused on supporting those schools, on maths hubs and on introducing maths, free phonics and lots of things that will help in the early years, as well as the teaching support and the development of teachers. She is absolutely right that many in my family, including my cousins and my cousins’ kids, have been to schools in Knowsley, so like her, it is a very personal issue for me.

[Cat Smith]

I am really glad to hear that the Secretary of State takes such an interest in schools in Knowsley, but in Knowsley, as in many parts of England, we have schools where children are failing to reach their potential, and that is not because of a lack of will from the teachers.

This debate is a good opportunity to pay tribute to our teachers, our teaching assistants and the parents supporting children at home, who make sure that our kids get the best education possible, as well as—if I may stray a little bit beyond the debate—the youth workers. Where we still have them, youth workers also support children’s education in an informal environment. It is an environment post covid in which, frankly, it is truly remarkable the lengths that our teachers and teaching assistants have to go to make sure that our children can access such an education.

I want to put on record my personal thanks to the headteachers cluster in the Lancaster and Morecambe area, who consistently and persistently meet me and my constituency neighbour, the hon. Member for Morecambe and Lunesdale (David Morris)—we are meeting them again in a few weeks’ time—to ensure that, as Members of Parliament, we are aware of the challenges that schools face in the Lancaster and Morecambe area.

However, these teachers cannot continue to shoulder the burden for the Government’s failure. I would say that the education sector is in crisis, but we have now been saying that for many years, with no active response from the Government. The Government cannot continue to pretend that they are serious about investing in schools while the vast majority of schools are facing huge cuts, in spite of growing pupil numbers and costs. In Lancashire, 520 out of 564 schools face cuts this year, with £24.3 million needed to restore real-terms per pupil funding to its level last year. The staff who work in those schools desperately want to improve schools and provide better for their pupils, but they need the Government to meet them halfway and to help them do so.

This debate is not just about one type of school, and I want to talk about rural schools. I have some small rural schools in my constituency, and I recently met Rebecca Scholz, who is the headteacher at Scorton Primary School in my constituency and Calder Vale St John Primary School. She is already struggling to make her small rural school budgets meet the needs of her pupils. Those schools do not have school halls, so they have the additional costs of hiring village halls for PE lessons. They do not have school kitchens, so they have to get school meals taxied in from schools further afield that do have kitchens. All of this puts additional costs on these small rural school budgets, and it is making it very difficult for Rebecca to ensure that these schools are sustainable.