Further Education Colleges: Recovery of VAT

Lord Deben Excerpts

Tuesday 9th June 2026 Lords Chamber

[Lord Livermore (Lab)]

I am grateful to my noble friend for his question. As I have said, the Government are continuing to look into the VAT position of these colleges. Of course, admitting further education colleges to a VAT refund scheme would be a change in tax policy. As my noble friend knows, the Chancellor makes decisions on tax policy at fiscal events in the context of the overall public finances. I agree with my noble friend about the importance of FE colleges. That is why we are investing in FE colleges: £1.7 billion to support them to maintain their estates; £375 million to expand capacity for post-16 education; £590 million to support priorities such as recruitment and retention; and £295 million into 29 technical excellence colleges to support key sectors for growth including construction, engineering and manufacturing.

[Lord Deben (Con)]

Does the Minister accept that there are some areas where the law has already told the HMRC that it ought not to be demanding VAT—for example, agricultural shows—and that it refuses to accept the law and keeps on standing in the way of spreading what it has had to do for the Great Yorkshire Show to other shows? It is also true that the HMRC has lost its case about plug-in electric cars and is supposed to reduce the VAT to the same level as you pay at home. At the moment, it is penalising people who do not have a drive, and therefore people who do have a drive get their VAT very much lower. Why does he not intervene and make the HMRC accept the law?

[Lord Livermore (Lab)]

There is a lot there. I am confident that HMRC accepts the law and is following the law, but I am more than happy to look into the points that the noble Lord raises.