Independent Schools: VAT and Business Rates Relief

Neil O'Brien Excerpts

Monday 3rd March 2025 Westminster Hall

[Dr Arthur]

I find it really interesting that Conservative and Liberal Democrat Members are talking about how wrong it is to place VAT on school fees, even though they thought nothing about introducing university fees, which place a huge cost on education, particularly for people from poorer backgrounds.

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

That was 1998!

[Dr Arthur]

The massive rise in tuition fees came later. Hon. Members know exactly what I am talking about. [Interruption.] Can I speak, please? Nobody here is questioning the motives of parents—every single parent who sends their children to an independent school wants the best for their children—but what we are questioning is, if we were to scrap this policy, what would we cut instead? I am just not hearing an answer. This policy will generate additional income for the constituency of the hon. Member for Edinburgh West (Christine Jardine). Where does she want that to be cut from instead? What does she say to the majority of people in Edinburgh who voted for parties that supported this policy?

--- Later in debate ---

[Neil O’Brien (Harborough, Oadby and Wigston) (Con)]

It is a pleasure to serve under your chairmanship, Mrs Lewell-Buck. We have had some superb speeches on all sides of the House today, starting with my hon. Friend the Member for Berwickshire, Roxburgh and Selkirk (John Lamont) who led us brilliantly. I thank the nearly 115,000 people who triggered this debate by signing a petition against the education tax, and particularly those who are here today.

There is a good reason why all previous Governments of all colours have avoided taxing education. It is hard to imagine a Tony Blair Government doing what this one are now doing. In fact, we know that he slapped the idea down hard when it was suggested. Likewise, Clement Attlee did not do it, and nor did Harold Wilson or Jim Callaghan. The rest of Europe does not do it. But under this Government, schools are being hit by a triple whammy of VAT, business rates and higher national insurance. Even some Government Ministers have their doubts about this. The Chief Secretary to the Treasury, no less, told the girls at Redmaids’ high school in 2022 that he opposed his party’s policy on taxing independent schools and said that it would not bring in what his own party was claiming. What an extraordinary thing for the Chief Secretary to have said.

As the Labour hon. Member for Ealing Central and Acton (Dr Huq) said, the Government are doing exactly what they promised they would not do by raising tax on working people. The Government’s claim is that they need to find some money. I note that they are able to find billions and billions to fund their bizarre payment to Mauritius to take our own territory off of us, but even if I could not think of anywhere that the Government could save some money—and I can—my advice would be that, if they want to tax people who have more money, they should tax people who have more money, rather than taxing education. The problem with taxing education is that it catches people who are not rich; it catches people who are sacrificing so much to invest in education. That is unselfish and has wider social benefits. If the Government wanted to tax fancy cars or holidays, or meals out or something like that, I would at least understand, but taxing investment in education is a mistake—and starting it halfway through a school year makes it worse and is vindictive.

In my constituency on the edge Leicester, we benefit from lots of different types of people, but particularly from second-generation communities who really value education. I see whole extended families in my constituency coming together to spend what money they have not on fancy cars or luxuries, but on school. In the biggest independent school in my constituency, Leicester grammar, probably the most common occupation among parents is to be a doctor working in the NHS, and being a doctor is still a very common dream for the pupils there, too. Education has these wider social benefits, and I am struck that the Government praise these people one minute and then wallop them the next; one minute they love them, and the next they hate them.

The other common reason that my constituents end up paying twice over for education is that their child has some sort of special needs. They first pay the tax, then they do not use the service that they paid for and then they pay again themselves to get what they think is the right thing for their child. Parents know what the EHCP system is like and they can see the ever-rising demand, so instead of adding to that demand they pay up themselves out of their own pocket. They are content to make sacrifices to get the care they need for their child and their special needs.

Independent schools educate more than 130,000 pupils with SEND, of which around 100,000 do not have EHCPs. This is one of the big challenges created by the education tax: if a significant chunk—maybe not even a big chunk—of that 100,000 or so children with special needs but no EHCP are taxed into the state system, that will be a huge new load on a special needs system that has already seen demand explode over recent years. Councils are already struggling, and will have to do more assessments and find even greater resources.

We know that 100,000 figure from both the Government’s own data and the ISC’s census, but behind every statistic is a real child. There was an example recently of how this is playing out just over the border from us into Lincolnshire: a girl was forced to move school because her parents could not afford the new tax, and the council has now gone from paying nothing to spending £8,200 a year of taxpayers’ money to transport her a long way to the nearest school that can take her.

Some of these cases are profoundly sad. There was a report in The Independent recently about a girl who was hospitalised for eight months last year with a rare brain condition, which left her needing a very high level of support and unable to cope with the change of school placement. The daughter had attended a private school, which her dad says they had just about afforded, but the 20% charge on top made it unaffordable. She had been living in intensive care, and once she came out, she had only eight months left at her old school because she was in year 11. Her father raised her plight with the DFE, and he says of the letter back from Ministers:

“I could have smashed my head against a wall when I got that letter, I was so angry and upset. It’s so heartless.”

The Government claim that this is a great and vital revenue raiser, but in reality, that has always been highly uncertain. The rate at which it will shift pupils into state education is hard to predict, and the effects of this large group of children with SEN moving makes it even more uncertain. Pupil movement out of independent schools is already three times higher than predicted, as has been noted in the debate. Some 10,000 fewer pupils are in independent schools already, according to the September 2024 ISC pupil numbers survey. The drop was largest in the transition years, with a drop of just over 4.5% in year 7 entrance.

The Government want to present all the parents who end up sending their children to independent schools as incredibly wealthy, but according to analysis by Diarmid Mackenzie, around 90,000 families who use independent schools are on below average incomes. They will be the ones who are most affected, and independent schools will become more exclusive.

The hon. Member for Paisley and Renfrewshire North (Alison Taylor) talked about the ability of schools because of this change to reclaim historical VAT on capital spending. That is worth about £5 million for Eton, but nothing at all for lots of smaller schools that are less well resourced—and some of them are not well resourced.

I think of a small Christian school in Leicester, which got in touch with me because it was so concerned about this. Its income per pupil is probably below those of the neighbouring state schools, its fees are low, the teachers could get paid a lot more elsewhere and the parents are definitely not rich. Why do those people do it? They do it because it is a labour of love, and it is a labour of love for others, too. There are all kinds of reasons that children end up in the independent sector. Maybe it is their special needs; maybe it is faith; maybe it is to do with language; or maybe it is a particular educational approach that works for their child. In a word, this is pluralism.

On the other side of the ledger, what do we have to show for it? The Government occasionally try to claim that the money is ringfenced for some purpose or other, but of course the truth is, as the Minister knows, that there are no ringfences at the Treasury. In the troubled schools Bill, we see measures that will unwind the educational reforms to state schools that propelled England up the international league tables. The Institute for Fiscal Studies says that, over the last Parliament, per pupil spending in mainstream schools rose by about 11% between 2019 and 2024 when adjusted for inflation. That is an 11% per pupil real-terms increase, but for this coming year, the IFS has pointed out that state schools’ costs are going up faster than their income, with costs up 3.6% and funding up only 2.8%. It is therefore not the case that the education tax is unlocking some great funding bonanza for those of us who have got our kids in state schools. In fact, I see that the National Education Union has recently relaunched its “Stop School Cuts” campaign.

There are 43 schools that have closed or announced closure since Labour came to power, and many of them have explicitly pointed to the education tax as the thing that tipped them over the edge. Schools that have closed include Hemdean House school, Abercorn school, Portland Place school, River House Montessori school, Alton school, Conifers school, Kilgraston school, the Study school, Ursuline preparatory school, the Hampshire school, St Joseph’s preparatory school in Stoke-on-Trent, Wings school, Argyll House, Chartfield school, Gracefield preparatory school, Lawrence House, North London Rudolf Steiner school, Redbourn Park secondary school, Sheiling school, the Copper academy, the GFC school, the Prepatoria school, Ashcroft school, Downham preparatory school, LIFE Wirral Sports school, Iona school, Brighton Waldorf school, Progress Schools, Summit school, Advance Education, Tashbar boys nursery, Maidwell Hall school near me in Northamptonshire, Loughborough Amherst school, Godolphin prep in Salisbury, the Village school for girls in Camden, Highfield prep in Maidenhead, Oxford House school in Colchester, Carrdus school in Oxfordshire, Bedstone college in Bucknell and Fairfield PNEU school in Backwell. Schools that have merged and reduced in numbers include Headington and Rye St Antony; Orchard House and Chiswick and Bedford Park; and Westbury House and the Study schools.

I read those out because, as well as the number of children who will move into the state sector and have their education disrupted in that way—which seems to be much higher than the Government predicted—a huge number will have their education disrupted even if they end up in another independent school. That is precisely what is happening to a lot of parents in my constituency because of local closures. The Government will say that those children are privileged; I say they are children. Being forced to change schools and perhaps being separated from friends is disruptive and bad, whoever they are.

The Government have often countered that not many pupils will be affected. We hear about the small percentage of pupils who will move, and how easy it will be for the state sector to accommodate them. We hear much less about how much extra that will cost, and we have heard nothing from the Government about the 10,000 fewer children in independent schools I already mentioned. The official impact predictions for VAT estimated that 3,000 pupils would leave this academic year; now we have seen 10,000 in the first term. There are still five months until August, so it may get worse before the year is out.

If the number of pupils leaving the sector continues to run at three times the predicted levels, we would face not just—“just”—35,000 pupils displaced, but more than 100,000. In many cases, they will struggle to get a state school place. In at least 27 authorities, schools are full in certain age cohorts and, since Labour announced this policy, pupil number projections in the state sector have been revised up nationally—significantly so in many local authorities. That means fewer people in the state system will get their first choice of school.

Although there is uncertainty about the fiscal impact of this policy, there is no uncertainty about it not being the best way to raise revenue. The other day, the Chancellor announced the introduction of a special new business rates relief for the film industry, even as the Government take away business rates relief for schools. The argument is, “The film industry is good. This is an investment in our future”—but schools are an investment in our future. The argument is, “This is good culturally. This is part of our culture”—but education is good for our culture as well.

I will come to an end. There is uncertainty about the fiscal impact of this measure, but there is no uncertainty about it causing a lot of misery for parents with special needs kids and for parents who do not want to have their kids’ education disrupted. The Government are doing this for political reasons. There is no doubt that this is not the best way to raise revenue; this is a purely political decision and it is having significant, real-world, bad effects on our constituents right across this country.

Social Security

Neil O'Brien Excerpts

Tuesday 10th September 2024 Commons Chamber

[Esther McVey (Tatton) (Con)]

Who would have thought that a Prime Minister not even in office for 10 weeks would be so out of touch with the public? Yet here we are, and yes this Prime Minister is so out of touch, along with the Chancellor and the whole of the Cabinet who are going along with and supporting this cruel policy. The Chancellor should be under no illusion: the public know that this decision to rob millions of pensioners of their winter fuel allowance, for which the Government have no mandate, has nothing to do with economics and everything to do with cynical political calculation.

The haste with which the change is being made is breathtaking. All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee. That is generally done in advance of the legislation being laid. In this case, however, the Labour Government has opted for the urgency provision, which allows SSAC consideration to be retrospective. Some say that is bypassing SSAC scrutiny. As well as evading that scrutiny, where is the Government’s impact assessment on removing winter fuel payment from these pensioners, particularly in the light of the latest information that bills will be rising by £150 this year?

[Neil O'Brien (Harborough, Oadby and Wigston) (Con)]

There are 18,900 people losing winter fuel payments in my constituency, and many of them are among the 800,000 people who are not eligible for pension credit, but are below the Government’s own poverty line. What are they supposed to do?

[Esther McVey]

Well said. What is worse, that this Labour Government are so out of touch so early on in their government, the unnecessary haste that this change is being brought in with, the lack scrutiny of this policy, or Labour’s breathtaking hypocrisy? Back in 2017, when the Conservative manifesto stated that we would means-test benefits, the Labour party’s reaction was one of horror, saying that this could not be done and publishing research showing that up to 4,000 pensioners’ lives would be at risk and that pensioners would struggle to heat their homes. The Conservatives did not do it.

What are we seeing here? We are seeing that a Labour party in office ditches its beliefs and its research. This Government have been telling pensioners that they did not want to do this, but that tough financial decisions must be made. We all know, however, that that is poppycock, as it was not the Government’s message to the already highly paid train drivers. When they met them, money was no object. They said, “Have as much as you want.”

The public are not as stupid as this Government think they are. This is good old-fashioned pork barrel politics, taking money away from the people who the Chancellor thinks do not vote Labour, such as pensioners, to hand to people who she thinks do vote Labour, such as train drivers and public sector workers. Millions of pensioners, many struggling to make ends meet, are being sacrificed in this political strategic game.

By announcing the scrapping of the forthcoming and long-awaited cap on care costs, as well as laying the ground to remove the council tax allowance for single people, Labour has basically declared war on pensioners, which will be neither forgotten nor forgiven. Our pensioners deserve better than this. It is time that Labour reversed this decision and restored the winter fuel allowance to all pensioners.

Oral Answers to Questions

Neil O'Brien Excerpts

Monday 18th March 2024 Commons Chamber

[Mel Stride]

Among the major drivers of the increase to which the hon. Gentleman refers are mental health issues and musculoskeletal issues. I am not entirely sure that he is accurate when he says that the upward trajectory in the number occurred just as vaccination occurred—I think it predated that moment—and I certainly do not subscribe to the view that vaccination is in any way unsafe.

[Neil O’Brien (Harborough) (Con)]

T7. For many years, the Department published statistics giving a breakdown of welfare claims by nationality. Although the Department still has the data, it no longer publishes the statistics. Will the Minister look again at that, and start publishing those important statistics once again?

[Jo Churchill]

I thank my hon. Friend, but I would like to inform him that at the moment there are no plans to recommence the publication of those statistics.

Oral Answers to Questions

Neil O'Brien Excerpts

Monday 29th June 2020 Commons Chamber

[The Secretary of State for Work and Pensions (Dr Thérèse Coffey)]

The benefit cap does play an important part, but the hon. Gentleman may not aware of the exemptions to it. New and existing claimants can benefit from a nine-month grace period when their benefit will not be capped if they have a sustained work history. Since 2013, nearly 220,000 households which were subject to the benefit cap are now no longer capped.

[Neil O’Brien (Harborough) (Con)]

What recent assessment she has made of the adequacy of benefits for people with severe disabilities.

[The Minister for Disabled People, Health and Work (Justin Tomlinson)]

As a Government, we are currently spending £55 billion supporting disabled people and those with long-term health conditions. The level of financial support will reflect the level of disability or condition of the claimant.

[Neil O’Brien [V]]

I thank the Minister for his advice the other day regarding my disabled constituent Tom Hipgrave. Although the support provided by PIP is vital, what more is my hon. Friend doing to help those with severe disabilities, like Tom?

[Justin Tomlinson]

My hon. Friend is a very diligent representative of his constituents, as I saw with the casework he raised. Our forthcoming Green Paper is key, as is our national strategy for disabled people, where we will explore other ways to offer greater support, such as advocacy, signposting and removing barriers across Government and in wider society.

Universal Credit: Managed Migration

Neil O'Brien Excerpts

Tuesday 8th January 2019 Commons Chamber

[Alok Sharma]

I visited Liverpool last year and talked to colleagues in jobcentres who told me that universal credit was working well, that they supported it and that it enabled them to offer help. The hon. Lady talks about providing support for individuals. The best support we can provide is helping them to get into work, and that is what is happening under universal credit.

[Neil O'Brien (Harborough) (Con)]

Universal credit is solving some serious problems in the benefits system. It is helping people to move into work more quickly and, together with the national living wage, is helping to drive down unemployment. The Minister is right to take a cautious approach to rolling out universal credit but, further to the question from the hon. Member for Stretford and Urmston (Kate Green), can he assure me that he will move as quickly as possible to introduce regulations that solve the problem for people on severe disability premium? I have a constituent whose disabled son has lost money because he has moved local authority. It is obviously an indefensible situation. He will want to fix it. Can he assure me that we will move quickly to solve this problem?

[Alok Sharma]

My hon. Friend is right to highlight the issue of the recipients of severe disability premium. We recognise that issue, which is why we have committed to putting in place a hard gateway so that people are not naturally migrated across.

Universal Credit

Neil O'Brien Excerpts

Wednesday 17th October 2018 Commons Chamber

[Neil O’Brien (Harborough) (Con)]

The case for UC long predates this Government. Opposition Members will recall that Labour welfare Secretary James Purnell proposed something very similar in 2008, and the Institute for Fiscal Studies called for the same thing. Why was there that consensus? Why is this the right thing to do? It is because we had a system that had grown up in a piecemeal way over time, and that had led to perverse consequences. In particular, large numbers of people on housing benefit and tax credits were losing 90p in every extra pound that they earned. There were mad situations, such as the one trapping people on 16 hours a week because there was no incentive to earn more. I know some of those people and it is good that we are fixing that problem through UC.

One SNP Member disputed the idea that UC was improving work incentives, so let me tell him what the IFS says. It says:

“UC will still strengthen work incentives overall. Importantly, UC will have the welcome effect of strengthening work incentives for groups who face the weakest incentives now: the number of people who keep less than 30% of what they earn when they move into work will fall from 2.1 million to 0.7 million.”

So we are talking about a huge improvement; UC is breaking that welfare trap. The hon. Member for Garston and Halewood (Maria Eagle) said we should scrap UC, but, with respect, I do not think even the more sensible Members opposite believe that.

UC is one reason why we are seeing more people moving into work and we have record employment. It is why youth unemployment has been halved under this Government and 3.3 million more people have been helped into work.

[Stephen Kerr (Stirling) (Con)]

Let me add a significant statistic: there are more than 800,000 vacancies in this country, so the opportunities to go even further in terms of employment are there before us—it is a great prize.

[Neil O’Brien]

High employment helps lots of different groups in our society, and so we have record rates of employment for ethnic minority people and for lone parents, we have 600,000 more disabled people working and employment for women is at a record high. As a constituency MP, it is wonderful for me to have 3,000 extra people in Harborough working than there were when we came into office.

[Rachel Maclean (Redditch) (Con)]

I am sure my hon. Friend was about to mention that we also have record employment levels among another group—young people. We have record levels of youth employment now.

[Neil O’Brien]

My hon. Friend has taken the words out of my mouth; she has spiked my guns.

Of course we need to make sure we get this reform right, so I particularly welcome the move to restore the severe disability element within UC. As Ministers know, I have been in touch with them about that, and I hope we will pass the regulations to do it as soon as possible. I am glad the Department is spending an extra £1.5 billion ensuring that people can get the full amount paid up front, in order to make the system smoother. I am also glad it is solving some of the problems relating to the administration of the scheme, for example, by making it easier to get housing benefit paid directly to the landlord.

In some parts of this House, there seems to be a view that it is a measure of machismo to spend ever more on benefits, but we should reflect on what we inherited from Labour: nine out of 10 families, including Members of this House, were eligible for tax credits; people were getting more than £100,000 a year in housing benefit alone. That is why the welfare bill had increased by more than £3,000 per household. That is not a sensible way to run a country and it was not a good economic policy. It ended in not only national bankruptcy, but with a million extra people thrown on the dole under Labour. Labour Members should be ashamed of that record.

I am happy that we are now bringing in one of the highest minimum wages in the world. I am glad we are taking the lowest paid out of tax. That is the right approach, in order to lift people out of poverty. I am glad that members of our welfare team are listening to the important points made by colleagues such as my hon. Friends the Members for Amber Valley (Nigel Mills) and for South Cambridgeshire (Heidi Allen), who have continued to make the case for sensible reforms, in order to get right, rather than scrap for political reasons, an important reform that has powerful potential to improve the lives of people in our society.

Universal Credit

Neil O'Brien Excerpts

Tuesday 13th March 2018 Commons Chamber

[Angela Rayner]

The hon. Gentleman makes an important point. Universal credit has had add-ons and add-ons ever since the Government proposed it. That has made it very complex and, as I have outlined, work will not pay for some in receipt of it if these proposals go forward.

I would like to make a little more progress and address the issue of free childcare. Once again, the Government have a policy in transition—one that they are seeking to restrict. About 200,000 two-year-olds are currently eligible for 15 hours of free childcare, but there will be more than 400,000 two-year-olds in families receiving universal credit. Ministers have refused to say how many children will be eligible under their policy, so will they finally do so now? I ask that because hundreds of thousands of children may lose out under their plans. Once again, some of the most vulnerable children are first in line for Government cuts.

[Neil O'Brien (Harborough) (Con)]

In this House, we all believe in an honest and balanced debate, so may we just hear from the hon. Lady that it is clear that 50,000 more children will be entitled to free school meals under universal credit than under the previous system, and that 7,000 more children will be entitled to the two-year-old free offer—it is more, not fewer?

[Angela Rayner]

The Government have plucked the 50,000 figure from their own consultation document, but it had no accompanying methodology, so I am not convinced. Indeed, that makes up less than 5% of those who are in poverty. The regulations would mean that those who would currently be eligible for support under the transitional protections this Government laid out for universal credit would have that rug pulled from under them—[Interruption.] Conservative Members can keep making faces, but those are the facts.

Once again, this creates a cliff edge for families in receipt of childcare, and the policy will squeeze the income of working families who are already struggling to get by. Under universal credit, they have to pay their childcare costs up front and then claim the money back. With childcare costs rising faster than wages, meeting these costs up front will make it impossible for many working families to make ends meet, so yet another barrier is put in their way. Only months ago, several Conservative Members asked the Chancellor to look again at the taper rate because it meant that work would not pay for low-income families. Today’s vote is on exactly this issue. When the Government have already made those families bear the brunt of their cuts, adding yet another burden is just wrong.

--- Later in debate ---

[Neil O’Brien (Harborough) (Con)]

It is a pleasure to speak in this important debate, particularly after my hon. Friend the Member for South Cambridgeshire (Heidi Allen), whose speech was really powerful. It showed how badly Opposition Front Benchers have misjudged this debate. For weeks, outside this House, they have sought to pretend that we are taking free school meals off 1 million children, but that has come to this House and has bombed, because it is not true. The reality is that not a single child currently eligible for free school meals will lose them and that, under UC, 50,000 more children will be eligible for free school meals. This shows the limits of an approach that is all about the viral video and getting something that goes around on social media quickly; it goes too quickly for the fact-checkers to catch up with, but when it comes to this House and we learn the facts, it absolutely bombs.

If people are serious about being in government, they have to make choices, and this Government have made choices. The Opposition say they would like simply to give free school meals out universally, as part of a wider strategy in which we can just spend more money on everything and no one will have to pay any more tax—of course, it is all nonsense. It is the kind of dangerous nonsense that led to the Government borrowing a quarter of all the money they were spending in 2010, a disastrous situation in which we also had half a million men and women thrown on the dole in the worst economic meltdown for a generation.

If we choose priorities that enable us to do important things for working families with children, that allows us to extend eligibility for the new tax-free childcare from 600,000 people to 1.5 million people, to have important things such as the 30 hours’ free childcare offer, to have the important two-year-old childcare offer, which under UC is being expanded by another 7,000, and to have the more generous childcare element of UC, which is going up from 75% to 85%.

Prioritisation also helps with important interventions such as the pupil premium, with another £2.5 billion for the most disadvantaged children, and the new fair funding formula for schools, which is backed up by another £1.3 billion. The year 7s I met the other day at Beauchamp College in my constituency, of whom 60% will be eligible for the pupil premium, will get to go to Cambridge, do a science project and see their lives and opportunities absolutely transformed, because we are prepared to take the difficult decisions, to invest in those children’s futures and to give them a better chance in life.

It is incredibly important that we do not simply drift back to the mistakes of the past. Compared with what it was like when I was at school, the help for children who are less advantaged is so much better now. We have done brilliant things such as destigmatising free school meals: pupils no longer go in with their money, so it cannot be seen who is on free school meals and who is not. When I think back to what it was like when I was at school, I can see the big improvement we have made since my generation.

We have seen big improvements for working families with children because even as we have brought down the worst Government Budget deficit in this country’s entire peacetime history, we have prioritised, and we have done so in ways that help the most vulnerable and that help to improve life chances for those who do not have them.

Financial Guidance and Claims Bill [Lords]

Neil O'Brien Excerpts

2nd reading: House of Commons
Monday 22nd January 2018 Commons Chamber

[Ms McVey]

That is our intention and that is what we will do, but those finer points will be worked out by the body as it works responsibly on behalf of UK citizens.

I want now to address issues that I know will be of interest to hon. Members. The Government have been clear that we will not stand for unlawful, persistent cold calling made by companies in the claims management sector. Cold calling is already illegal under certain circumstances. Under the privacy and electronic communication regulations, we have forced companies to display their numbers when they call, made it easier to take action against those involved in making the calls, and strengthened the powers of the Information Commissioner’s Office to impose fines.

That being said, a number of companies continue to act disreputably, so it is only right that the Government continue to take steps to further regulate the sector. That is why the Government committed in the other place to introduce measures to tackle those issues. The Department for Digital, Culture, Media and Sport is currently working through the details of an amendment to prohibit CMCs from making live, unsolicited calls unless the receiver has given prior consent. That step, combined with the Government’s previous actions in this area, should act as a warning to those acting unlawfully that we will not rest until the problem has truly been eradicated.

[Neil O'Brien (Harborough) (Con)]

rose—

[Ms McVey]

If I can continue for a little longer, I will take some more interventions.

The Government welcome the findings of the report of the Select Committee on Work and Pensions exploring how to protect pensions from scammers. We remain committed to protecting savers from pension scams. We have already announced that we are banning pensions cold calling, tightening HMRC’s rule to stop pension scammers and fraudulent schemes, and preventing the transfer of money from occupational pension schemes into fraudulent ones.

The Government are currently reviewing the alternative proposals for banning cold calling under the Bill. We have also listened to concerns about the risks of not receiving sufficient guidance or advice prior to taking advantage of the pensions freedoms, and we are currently considering the amendments recommended to ensure that members of the public are aware of the importance of receiving guidance.

Hon. Members will also be interested in the addition of the provision for a debt respite scheme, which includes a breathing space period and a statutory debt repayment plan. We understand the valuable additional support that the scheme could provide for thousands of vulnerable individuals and want to implement a breathing space scheme as quickly as possible.

The Government are pressing on with policy development. We have already set out a firm timetable for consultation and are continuing to work closely with a wide range of stakeholders. The call for evidence on breathing space was published in October last year and has now closed. After responding to that call for evidence, we will consult on a single policy proposal. The Bill gives us an enabling power to lay regulation to establish the scheme after receiving advice from the single financial guidance body on the design and certain aspects of the scheme. It is important that we take time to get this right. The scheme will achieve its intended benefits for indebted individuals only if it is properly designed. I look forward to the Government working constructively with hon. Members so that we can enable a scheme to benefit vulnerable families as quickly as possible.

[Neil O'Brien]

One of the important things that the Bill does is to regulate nuisance cold calling. It is sometimes tempting to dismiss it as merely a nuisance, but it is more than that for some vulnerable people. A constituent has emailed me to say:

“All my friends and family have signed up to the TPS, but are still bombarded by these parasites. Our friend who suffers from dementia seems to get several a day, as I check his phone calls each time we visit. These vulnerable people…say yes to anything”,

even if they have not had an accident. My constituent adds that

“TPS does not work…The only way to stop this abhorrent practice is for the regulator to hand out punitive fines”.

Will my right hon. Friend both maximise the scope of the Bill and encourage the regulator to clamp down hard on that kind of behaviour?

[Ms McVey]

I thank my hon. Friend for raising that important point. I bet that many constituents could bring forward similar cases. The maximum penalty for breaches will remain the same; that is up to half a million pounds. We must make sure that people do not abuse the system, which is why, particularly in this Bill, we are looking at ways to ban pension cold calling.