Independent Schools: VAT and Business Rates Exemptions

Neil Hudson Excerpts

Tuesday 8th October 2024 Westminster Hall

[Aphra Brandreth (Chester South and Eddisbury) (Con)]

I am grateful to my hon. Friend the Member for Bromsgrove (Bradley Thomas) for securing this important debate. Just last week, I held a roundtable with headteachers, school governors and bursars from five independent schools in and around my constituency. I am grateful to Abbey Gate college for hosting. The message from everyone at that meeting was clear: the child is not at the centre of this policy. This is not just about the more than 1,600 pupils attending independent schools in my constituency; it is about the education of every single child, because every pupil who leaves the independent sector as a result of this ill-thought-through policy will mean further pressure put on the state system.

As independent schools try to absorb rising costs to minimise the impact of these taxes, they are faced with difficult choices about how to continue the important charitable work they do, including fully-funded bursary places—as many as one in 14 pupils at one senior school in my constituency. Like others here, I am particularly concerned about the impact on children with special educational needs.

[Dr Neil Hudson (Epping Forest) (Con)]

Hard-working families sacrifice huge amounts to put their children into independent schools. There are more than 2,000 pupils in Epping Forest independent schools. Does my hon. Friend agree that the Labour policy of removing VAT and business rates exemption from independent schools will impact pupils right across the country, including SEND pupils, and will also impact our fantastic local state schools, which will be hit with serious capacity issues when pupils are forced to transfer? This policy is about the politics of envy, rather than the politics of evidence.

[Aphra Brandreth]

Absolutely. The policy will impact all children across our country, and needs to be taken seriously. I have spoken previously about the challenges of SEND provision in my constituency, where families wait months for an EHCP. They are already being let down, so I am deeply concerned about the added pressure of this policy.

Finally, the policy is simply unworkable. The Government are asking staff and bursars to rethink how they operate invoicing and fee processing halfway through an academic year. At the very least, I urge the Government to move the start to the beginning of the next academic year. This is not about embossed stationery, swimming pools and astroturf; it is about children and their education. I urge the Government to think very carefully about this decision and to do as the headteachers at my roundtable on Friday suggested: put children at the centre of this policy.

Winter Fuel Payment

Neil Hudson Excerpts

Tuesday 10th September 2024 Commons Chamber

[Dr Neil Hudson (Epping Forest) (Con)]

Two months ago, the Labour party was elected promising change and a Government of public service. Although their announcement to cut winter fuel payments is change, I doubt it is one that millions of pensioners up and down the land thought that they would make. In terms of a Government of service, I struggle to think of a greater disservice to millions of pensioners than taking away the winter fuel payment on which they rely. Pensioners who have worked hard all their lives deserve dignity and respect in their retirement, instead of this harsh and ill-judged policy from Labour.

Many of those pensioners will be forced to make a tough decision this winter about whether to have the heating on, as energy prices rise and temperatures drop. The Government have admitted to me in a response to a parliamentary question that, shockingly, they believe that 15,744 of my constituents in Epping Forest will have their winter fuel allowance withdrawn by the Labour Government this winter, among the more than 8.6 million pensioners right across England who will have this lifeline withdrawn. This could have so many implications for the health of older people, who spend more time inside their homes when facing conditions, some of which need social care.

There is a real concern that being cold at home may have a detrimental effect on people’s health, as we have heard from some of our medical colleagues today, resulting in respiratory disease, rising blood pressure, an increased risk of strokes and heart attacks and even hypothermia. It is recommended by the UK Health Security Agency that the temperature should be 21°C in living areas and 18°C in bedrooms, which pensioners are going to struggle with this winter.

[Sir Gavin Williamson]

In Stone, Great Wyrley and Penkridge, over 19,600 pensioners are going to lose their winter fuel payments. Of course, so many of them are incredibly proud and do not want to apply for additional benefits, and so many will be just outside of being eligible. The decisions of this Government are condemning them to a cold and incredibly hard winter.

[Dr Hudson]

My right hon. Friend is exactly right that many people are too proud to claim these benefits, and that many people are just above the cut-off point. These people have been portrayed by some Labour Members as rich and able to deal with it, but that is not the case.

I am proud that our Conservative Government not only provided winter fuel payments, but extensively supported older people and the country through difficult times during the pandemic and the effects of the war in the Ukraine and, very importantly, that they honoured the Conservative triple lock, meaning that pensioners got the pension increases they deserve.

I am also proud that my party is continuing to defend older people, including through the compassionate Conservative motion that triggered this debate and vote, and that I was proud to sign. The economic decisions we make speak volumes about our values as a society and a country. How the Labour Government respond to this debate on winter fuel payments, and how they respond in the upcoming Budget, is their chance to show where their values truly lie. This Government need to confirm that, now and in the upcoming Budget, their need to save money will not come at the expense of older people and the financial support they need.

This Government really need to think again about their move to cut winter fuel payments, for the sake of the millions of older people who need them and for the implications it will have. If Labour chooses to continue with this heartless policy, my constituents and the constituents of Conservative colleagues can be assured that my party and I will continue to stand up for our pensioners and will maintain our call that the winter fuel payment cut be reversed.

[Several hon. Members rose—]

The Economy

Neil Hudson Excerpts

Wednesday 22nd May 2024 Commons Chamber

[Bim Afolami]

What I will certainly accept is that there are millions of people in this country for whom the cost of living crisis is still real. That is why we are taking the action that we are taking. That is why working people—[Interruption.] As a result of cutting national insurance, a person on an average salary is £900 better off than they would have been a year ago. That is why we are focusing hard on making sure we bring down borrowing, rather than increase borrowing as planned by the Labour party. What I would say to the hon. Lady’s constituents if I were to speak to them at her surgery is that the economy is on the right track, that we are at the point where the economy is starting to turn the corner and that, if they go with Labour’s leadership, things are going to get a lot worse. That is why we need to keep on the plan that we have set out.

[Dr Neil Hudson (Penrith and The Border) (Con)]

I thank the Minister for the encouraging economic update. It is so disappointing when we get good news on the economy and it is talked down by the Opposition. Inflation coming down to 2.3% really shows that the economic plan from this Government is working. With national insurance reductions, pensions increases, boosting jobs and a growing economy, does he agree that it is only the Conservatives that can be trusted to manage the economy soundly?

Independent School Fees: VAT

Neil Hudson Excerpts

Wednesday 21st February 2024 Westminster Hall

[Andrew Lewer (Northampton South) (Con)]

I beg to move,

That this House has considered independent school fees and VAT.

It is a great pleasure to serve under your chairmanship, Mr Henderson—I think for the first time. I put on the record my thanks to the Independent Schools Council and its superb chief executive Julie Robinson, not only for the tireless campaigning that it does for the independent education sector but for its work as the secretariat for the all-party parliamentary group on independent education. I have been the chair of that group since founding it in 2017, after moving from being an MEP to an MP. A number of independent schools serve my constituents, including Quinton House, Bosworth School, Northampton High School for Girls and OneSchool Global.

More than 600,000 children are educated in the independent schools sector in the UK, saving UK taxpayers more than £4 billion each year because those pupils are not educated in the state sector. In addition, the independent sector has a total economic footprint that amounts to £16.5 billion, supporting 328,000 jobs and £5.1 billion in tax revenue. Why is it that the sector often gets bad press, despite its contribution to society both economically and educationally? For many people, when they hear the terms “independent school” or “private school”, they immediately associate them with elitism, isolation and privilege. Nothing could be further from the truth. Independent schools today are modern, diverse and inclusive places that often provide education and specialist provision where the state sector does not go. Furthermore, independent schools are more connected to society now than ever before, working with the state sector in partnerships and widening access through bursaries.

[Dr Neil Hudson (Penrith and The Border) (Con)]

I congratulate my hon. Friend on securing this really important debate. Our independent schools do vital outreach work with access bursaries and access to sports facilities. Many hard-working families up and down the land make huge sacrifices saving to send their children to independent schools. Does my hon. Friend agree that the short-sighted Labour policy on VAT on independent schools will compromise these schools, force some parents to take their children out of them, and ultimately put more pressure on our local state schools?

[Andrew Lewer]

I thank my hon. Friend for that question, which is indeed the major thrust of what I have to say. As chair of the all-party group, I am delighted every year to sponsor the Independent Schools Council’s annual “Celebrating Partnerships” report, which gives parliamentarians and stakeholders from across the sector the opportunity to come together to celebrate the fantastic work that the independent sector does in partnership. Three quarters of independent schools are now in partnerships with state schools. That is not the old swimming pool every other Tuesday afternoon for an hour or two; they are embedded, mutually beneficial partnerships.

Given how influential and impactful the sector is for wider society, it is in disappointment that I stand in opposition to the Labour party’s policy position on independent education—the introduction of a 20% VAT fee on independent school fees. I urge the current Government and my Conservative party colleagues to be robust in their stance of not imposing VAT on school fees. I look forward to the Minister’s analysis of that, but given that the Opposition are currently well ahead in the polls, and it is at least possible that they could form a Government in the next Parliament, it is important that this debate has been granted. It is important that we take the time to scrutinise what I believe is an ill-thought-out policy. Although I welcome the fact that Labour’s plans for independent education under the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) are not as draconian, undemocratic and questionable in law as they were when he served in the shadow Cabinet of the right hon. Member for Islington North (Jeremy Corbyn)—when it looked like the party was trying to abolish the sector entirely—they are still very worrying indeed.

The principle of parental choice is supported by article 2 of the first protocol of the European convention on human rights, which was incorporated into domestic law by the Human Rights Act 1998. It says that

“the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions.”

However, is that right to choose being assisted, if said choice is made increasingly difficult by a huge tax rise? I do not think it is. It is also a fundamental principle that we do not tax the supply of education, and the Value Added Tax Act 1994 exempts education, including nurseries and universities, alongside independent schools. That principle is international in scope and the UK would be an outlier if Labour abandoned that policy. For example, EU nations, Australia and the USA do not apply sales taxes to education.

Beyond the core principles, there are many reasons why the policy could be harmful and doomed to fail. First, parents residing in the UK who make the decision to send their children to independent schools already contribute to the state education sector by paying their fair share of taxes. I have made that very clear in the Main Chamber when debating this subject, and the repeated use of terms such as “tax breaks” and “tax reliefs” should be avoided. Independent schools are taxed in the same way as other education providers and charities, and they provide more than £5 billion in tax annually, which is more than three times what Labour thinks it will raise from VAT. UK parents who pay school fees do so from already taxed income.

Now that the Labour party has put this policy forward, I am sure we will hear today that it has done so because it believes in educational excellence for everyone and not a reserved few. However, by introducing the policy a Labour Government would simply make independent schools even more elite than Labour already perceives them to be by pricing out hard-working parents who can just about afford to pay the fees to invest in their children’s futures. Those who can easily absorb the 20% will do so, and perhaps that is what the Labour party wants: to make private schools more elite so that it is more difficult for politicians like me to make the case for them.

I will use the jacuzzi and private jet analogy to demonstrate my point. Many of us will never have a jacuzzi in our gardens, but could probably afford to install one if we chose to do so. On the other hand, a private jet is, for virtually everyone, an unobtainable fantasy for a distant elite with no connection to our lives. That is what Labour wants independent education to be—the private jet, not the jacuzzi. Of course, that is purely figurative as a parallel and not related to the crucial importance of educational choice.

It has been said that these are not issues we should worry about, and that independent schools can simply absorb the VAT increase so that they do not pass it on to parents. That is a naive view, with many independent schools up and down the country being very small, operating on tight margins and unable to do that. A quarter of all schools in the Independent Schools Council have fewer than 155 pupils. They are not wealthy institutions that are able to absorb VAT.

Future Relationship with the EU

Neil Hudson Excerpts

Thursday 10th December 2020 Commons Chamber

[Penny Mordaunt]

There were certainly elements of the Chancellor of the Duchy of Lancaster’s statement earlier in the week that touched on that, but the hon. Lady is absolutely right to say that we want to be able to secure opportunities to set the conditions for our economy to thrive. Clearly, we have very challenging environmental goals that we wish to reach. Those are the freedoms we are working and fighting for.

[Dr Neil Hudson (Penrith and The Border) (Con) [V]]

The end of the transition period will present both opportunities and significant challenges for those involved in the agriculture and food production sector. Will my right hon. Friend reassure those in that sector in Penrith and The Border, Cumbria and the wider UK that sufficient provisions are in place for veterinary and certification work at borders? Will she reassure farmers in sectors that may face severe challenges in tariffs, such as the sheep and beef sectors, that the Government are prepared to step in and provide support?

[Penny Mordaunt]

My hon. Friend raises two important points. I can assure him that a great deal of thought has gone into ensuring that we have the supplies and enough personnel to meet the requirements on the veterinary side of things. We have always stood by any sector or part of the UK that is facing tough times, and we will continue to do so.

Oral Answers to Questions

Neil Hudson Excerpts

Tuesday 1st December 2020 Commons Chamber

[The Chief Secretary to the Treasury (Steve Barclay)]

As the hon. Lady should know, the income tax on these payments is actually paid to Scotland, not to Westminster. The Scottish Government have the power and the funding to gross up the payment if they wish. The UK Government have provided over £8.2 billion extra funding for the Scottish Government this year to support people, businesses and public services.

[Dr Neil Hudson (Penrith and The Border) (Con) [V]]

The Government’s financial support for people and businesses during the pandemic has been a lifeline, but many people have not been able to access support, such as some self-employed people, business owners, freelancers and company directors, including many in the tourism and hospitality sectors, which are so important in Cumbria and are now struggling to survive. Will the Government work to find a way to support these individuals, perhaps on a loss of income basis similar to the discretionary grants or hardship schemes that were devised for the dairy sector?

[The Financial Secretary to the Treasury (Jesse Norman)]

My hon. Friend is absolutely right to focus on the specific impact that he and we all, as constituency MPs, have in our constituencies. I think he knows—we have discussed this at some length—that we are always happy to look for more schemes and more suggestions, if he would like to write to me with some details of what he has in mind. He will also be aware that, as I said, I am meeting the Federation of Small Businesses, the Association of Chartered Certified Accountants and, in due course, I hope the all-party group to discuss these issues in more detail.