Independent Schools: VAT and Business Rates Relief

Rachel Gilmour Excerpts

Monday 3rd March 2025 Westminster Hall

[Dr Huq]

It is interesting to learn that—

[Rachel Gilmour (Tiverton and Minehead) (LD)]

Will the hon. Member give way on Eton?

[Dr Huq]

I am not finished addressing the first point. Can we do this sequentially? I will respond to the hon. Member for Windsor (Jack Rankin) first and then I will take the hon. Lady’s intervention.

It is interesting to learn that, but my point is that such schools are still going to be quids in after this.

--- Later in debate ---

[Rachel Gilmour]

Will the hon. Member give up on all this stuff about Eton? I speak as a mother of two Old Etonians. I was a single parent; I worked three jobs. The right hon. Member for East Hampshire (Damian Hinds) said there is more money from Old Etonian parents, but there certainly is not—not from this one. Eton hands out completely free fees to 100-plus boys a year; they do not even have to pay for their pencils. When it comes to things like Dorney Lake and the sports centre, it hands that back a thousand times to local communities across the country. Give it up!

[Dr Huq]

I do not know how parliamentary that language is. I am not going to join in the praise of Eton, particularly because I think the hon. Lady may have been an atypical parent. I imagine that some parents there would be able to bear a 20% increase, and for a school that is clever with its accounts, these things may just be a rounding error. I am talking about smaller schools for which that does not apply.

It is interesting to see the hon. Member for Boston and Skegness (Richard Tice) here. I have a massively remain constituency, with 72% of my electorate voting remain, but, perversely for Reform, it is leaving the EU that has made this policy possible—it is a Brexit benefit. If only we had never left the EU, this would not be happening.

Usually education is not a taxable luxury good, and there is a fear that if this increase happens, what could be next—nurseries or universities? I used to work in that sector. There is a slight worry that there is a loophole, because the policy contradicts the EU’s VAT directive that specifies there should be no VAT on any form of education. In Greece in 2015, the left-wing Syriza Government wanted to introduce VAT at 23%. They had to abandon that for a slew of different reasons, including because it was contrary to the EU’s VAT directive.

University tuition is zero rated, and there is a worry among my friends in the sector there, who say, “You’re lucky to have got out when you did, because they’re closing so many university departments in the UK.” What could be next? I hope that my hon. Friend the Minister can assure me that nurseries and universities are off limits.

We have heard all these things—that schools are going to close—and we have heard a lot of catastrophising, but it remains to be seen whether those things will come to pass. One of my schools went in 2023. My worry is that this policy will make an elitist system more elitist. The Government say in their response:

“Ending tax breaks for private schools was a tough but necessary decision”,

but when growth comes, is there a way of undoing it? It was a very clear policy in many manifestos, so I understand that it will not all be undone, but let us think a bit creatively.

--- Later in debate ---

[Rachel Gilmour (Tiverton and Minehead) (LD)]

It is a joy to speak under your chairmanship, Ms Lewell-Buck. I will be brief.

I grew up the eldest of four children, and the only girl. My brothers and I were all grateful recipients of scholarships and bursaries to public schools. I am, believe it or not, a Cheltenham lady, and my brothers all attended King’s, Canterbury. Two served in His Majesty’s armed forces—Johnny was a half-colonel in the Grenadier Guards, and Ben still serves as a brigadier in what we still call the Black Watch. My other brother, James, worked as a heart surgeon before serving his community in Wales as a GP. In my own small way, I have tried to contribute to my country and my community. I am now serving as an MP, but I have also been a town and district councillor. I worked for international and national non-governmental organisations, and the National Farmers Union and the Environment Agency. That was made possible for all of us in large part by the education that we were fortunate enough to receive.

As Members can imagine, I very often get asked by people who tend to put their cross in the blue team box why I am a Liberal, and my answer is this: I am a Liberal because I was very well educated and I have a conscience. As a Liberal, individual political choice is part of my political DNA, and that is why I resist any attempts to erode choice. Steps taken to remove parental choice over where and how children receive their education are, to my mind, politically indigestible. Ultimately, parental agency must come first in any discussion about children’s future; it is not for the state to disrupt that dynamic.

There are a few misconceptions about private schools in this country. One is that most of those who are fortunate enough to attend independent schools are somehow part of the elites. Many students in such schools up and down the country hail from families that have saved and made many a sacrifice to strive to provide the best possible education for their children. My parents were both teachers—not a particularly highly paid profession. This policy would overturn a long-established VAT exemption on independent schools and would hit hard-working families the most. Those schools would be forced to increase fees to stay afloat, cutting off opportunity for many children and driving the further balkanisation of our education system, with the result that only the most financially fortunate would be able to afford private school fees.

[Clive Jones (Wokingham) (LD)]

The Government’s policy will harm SEND children currently enrolled in independent schools One constituent wrote to me to say that their daughter goes to a local independent school because of her autism, and that it is an environment that is best suited for her needs. Does my hon. Friend agree that the Minister should recognise the potentially detrimental effect on children with SEND if the VAT exemption causes schools to cut scholarships and bursaries?

[Rachel Gilmour]

I thank my hon. Friend for his interesting and adept intervention. I will be coming to that matter in a minute. There are some shocking—shocking—statistics on this from the Conservative party in Devon.

This policy will immeasurably increase the strain on the state school system, which is already bursting at the seams, through a large influx of pupils transferring across to comprehensive schools. This tax will not offset the impact. Moreover, many pupils at private schools are there because bursaries and scholarships have enabled them to be there, as was the case for me. For example, Blundell’s school, the independent school in my constituency of Tiverton and Minehead, has a proud reputation of offering a very high number of bursary places to disadvantaged children from low-income households, who would otherwise not have the opportunity of a first-class education. It also opens its doors to the community, who regularly make use of its wonderful facilities. That is the case for independent schools up and down the country—I think I referred to one earlier.

What about those pupils in need of extra support with their learning? Here comes the shocking statistic about EHCP roll-out across Devon, where Conservative-run Devon county council fails to meet its statutory duty to issue 95% of EHCPs within 20 weeks. I think all of us—even the blue team—would agree that that is shameful. Many parents whose pockets are not bottomless and who have children whose needs are not being met see independent schools as a means of securing the best possible future for their child. Who could possibly decry parents doing such a thing? [Interruption.] Mutter, mutter.

Of course, my desire is to see our state school system rise to such standards that parents would not feel as though independent schools were the only way for their children to receive a first-class education. I sincerely hope that that day comes sooner rather than later, and I have confidence that this Government will make that happen, but I cannot help but come back to choice, which is the central premise of my argument—the choice of parents to decide themselves, and themselves alone, where their children learn.

Public Authorities (Fraud, Error and Recovery) Bill

Rachel Gilmour Excerpts

2nd reading
Monday 3rd February 2025 Commons Chamber

[Liz Kendall]

My hon. Friend is right to raise this issue, which he knows the Chancellor and the Treasury team are looking at seriously. The clear message from this Government is, “If you are getting money to which you are not entitled or owe money to the taxpayer through either unpaid taxes or fraud, that is wrong.” We treat everything the same, large or small. We believe in our public services and our social security system, and we want people to know that every single penny of their money is wisely spent and goes to those in the greatest need.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

As a Member of the party that introduced the state pension, I am behind the Government on this Bill because we all want to cut down on tax fraud and evasion. But I am concerned that pensioners are included under this blanket of Government scrutiny, and it seems that the only thing they have done to deserve it is to get a bit old.

[Liz Kendall]

One of the new measures introduced by the Bill, the eligibility verification measure, explicitly excludes the state pension. I reassure the hon. Lady on that point.

Agricultural Property Relief

Rachel Gilmour Excerpts

Tuesday 28th January 2025 Westminster Hall

[Rachel Gilmour (Tiverton and Minehead) (LD)]

It is a pleasure to serve under your chairmanship, Mr Stringer. First and foremost, I congratulate the hon. Member for Caerfyrddin (Ann Davies) on securing this vital debate. Right hon. and hon. Members will perhaps be sick of hearing me talk on this topic, but I feel compelled to provide a voice for my farmers. My constituency of Tiverton and Minehead has a similar make-up to the hon. Lady’s. It is overwhelmingly rural agricultural land and home to many farming communities. There are some 1,600 holdings according to the CLA and 432 of those farms will be hit by the Government’s APR changes.

We Liberal Democrats applaud our farmers. As a former director of the National Farmers Union, I feel well placed to highlight the damaging consequences that will inevitably be visited upon them as a result of the changes to agricultural property relief. The Government’s claim that 27% of all farms will be affected is, if I am being generous, misinformed. According to in-depth analysis conducted by the National Farmers Union in collaboration with the OBR and Treasury experts, 75% of the nation’s working farms fall above the £1 million threshold and will be struck by the punitive changes. The changes are said to be caveated by different assumptions on rate relief.

There are misapplied exceptions. The first one is that the average family farm would not top the threshold of £3 million in value, which is just not the case. Great Ash farm in my constituency is a typical good-sized family farm consisting of 256 acres and is on the market for £3.5 million. In an inheritance tax valuation, the farm’s livestock and machinery would be added to the value, bringing the total to around £3.68 million. Even when the acreage is not as large, the value of agricultural land alone often pushes farmers close to, if not over, the £3 million threshold and can certainly shatter the individual threshold of £1 million. If we add to the value of the land the livestock, deadstock, properties, machinery and business, the owners of the farm are looking at a hefty valuation—not one that they can capitalise on to keep the farm, but one that will ensure they are caught in the claws of this onerous death duty.

The second misapplied exception is because farm ownership is not in all cases split equally between a husband and wife, and it does not always pass to a direct descendant. Existing capital gains tax rules have discouraged many older farmers from transferring their farms to their children owing to the potential tax burden, which means that ownership is staggered across many generations in some cases. Often, when there are not ownership models that meet the co-owning married couple status that the Chancellor uses for the modelling of those exceptions, it means that the various personal and dependent inheritance tax exemptions that go into the flawed Treasury equation on this policy cannot be used on many occasions.

The third misapplied exception, the residence nil rate band, is unlikely to be applicable. It is reduced by £1 for every £2 when the estate exceeds £2 million. Therefore, if a farm business exceeds £2.65 million, the residence nil rate tax band is no longer valid. That is yet another misapplied Treasury exemption, which will not have a realistic effect on family farms’ ability to keep the taxman from taking everything they have. In conclusion, I will make no apology for standing up for my rural communities—

[Graham Stringer (in the Chair)]

Order. Your four minutes are up. I call Alistair Carmichael.

Women’s Changed State Pension Age: Compensation

Rachel Gilmour Excerpts

Wednesday 15th January 2025 Westminster Hall

[Rachel Gilmour (Tiverton and Minehead) (LD)]

Will the right hon. Gentleman give way? I will be quick and nice.

[Sir John Hayes]

No—forgive me, but my time is very short.

I sincerely hope that we will get a parliamentary vote on this issue and I will use every endeavour to ensure that we do. The WASPI women deserve better than the explanation we heard today, which was essentially somewhere between, “We’re not sure that their case is justified, because we think that most of them did know,” and, “We can’t afford it even if their case is justified.” Frankly, neither of those arguments will wash. The Minister, who is, as I said earlier, a decent man, must know that, just as the Prime Minister certainly feigned to know it before the general election. The question must therefore be asked, did the Prime Minister not know or did he not care? Was he careless about the support that he offered the WASPI women or did he not know what the Minister has just said?

I end with Winston Churchill, because I can do no better. He said:

“There is no worse mistake in public leadership than to hold out false hopes soon to be swept away. The British people can face peril or misfortune with fortitude and buoyancy, but they bitterly resent being deceived”.

This is deceit—nothing less, nothing more.

Question put and agreed to.

Resolved,

That this House has considered compensation for women affected by changes to the State Pension age.

Women’s State Pension Age Communication: PHSO Report

Rachel Gilmour Excerpts

Tuesday 17th December 2024 Commons Chamber

[Liz Kendall]

As I said in my statement, I understand that many women born in the 1950s face a real struggle and, on this specific decision, they may well be disappointed, but our commitment to pensioners and to the pensions triple lock will deliver an extra £30 billion into the basic state pension over this Parliament. Our investment in the NHS, about which many 1950s-born women are desperately worried, of £22 billion this year and next, shows our commitment to the issues that matter to those women. As I say, they may be disappointed and, indeed, angry about the decision, but we believe that it is the fair and right decision. However, I would be more than happy to talk to my hon. Friend in further detail so that he can pass on comments from WASPI women in his constituency.

[Rachel Gilmour (Tiverton and Minehead) (LD)]

I speak on behalf of Helen from my home town of Bampton and the 5,500 WASPI women in my constituency. They are not disappointed; they are devastated, as am I because—mistakenly, as it turned out—I believed that this Labour Government, who were supported by millions of women across this country who rightly turned their backs on the Conservatives, had some probity and decency. Does the Secretary of State agree that it turns out that they have neither?

[Liz Kendall]

No.