VAT: Independent Schools

Stephen Morgan Excerpts

Tuesday 8th October 2024 Commons Chamber

[The Parliamentary Under-Secretary of State for Education (Stephen Morgan)]

I thank the Opposition for bringing forward the debate. While the focus has been on private schools and the implications of the planned tax changes, it has allowed us to consider what is important in education. It is important to support the aspirations of all young people and their parents, and it is essential that all young people receive a good education in a safe and supportive environment.

It is certainly true that many parents choose to seek that provision in the private sector. The Government will always support their right to choose where to educate their children, but most parents do not have that choice, and all parents have high aspirations for their children. We therefore need to prioritise our efforts and consider how we can better serve the 94% of children in our state-funded schools.

Ending the tax breaks on VAT and business rates for private schools is a necessary decision to drive high and rising standards across our state schools and give every young person the best start in life. It will generate additional funding to help improve public services, including the Government’s commitments relating to children and young people.

This money will allow the Government to expand early years childcare for all by opening 3,000 new nurseries, thus helping parents back to work. The Government will recruit 6,500 new teachers and improve teacher and headteacher training as part of restoring teaching to the career of choice for the very best graduates. The Treasury is of course responsible for tax policy and has led on the publication of the draft legislation and technical consultation since July. As the Exchequer Secretary set out, VAT will apply to tuition and boarding fees charged by private schools for terms starting on or after 1 January 2025. It is right that we end tax breaks as soon as possible to raise the funding needed to deliver those educational priorities. The Treasury is assessing the impact of these changes in advance of the Budget. The independent Office for Budget Responsibility will certify the Government’s costings for these measures at the Budget and that will also include the interaction with other VAT receipts.

[Kit Malthouse]

Will the Minister give way?

[Stephen Morgan]

I am going to make some progress. The right hon. Gentleman spoke earlier. I know that many Members are concerned about children with SEND. [Interruption.] Members can shout as much as they like, but I have some really important points to make about SEND. I know I speak for the country—the right hon. Gentleman certainly does not. I assure Members that the Treasury has sought to ensure that these changes do not disadvantage pupils who need provision that is unavailable in the state sector.

Let me be clear: pupils who need a local authority-funded place in a private school, including those with a local authority-funded EHCP, will not be affected by the changes. That is because local authorities are able to reclaim VAT when they are charged. For other pupils, this change should not mean that they will automatically face 20% higher fees. The Government expect private schools to take steps to minimise fee increases, including through reclaiming VAT incurred in supplying education and boarding. I also note that IFS analysis shows that the number of children in private schools has remained steady despite a 20% real-terms increase in average private school fees since 2020 and a 55% rise since 2003.

Members from both sides of the House mentioned transfers to the state-funded sector. There are always some pupils moving between the private and state-funded school sectors. Approximately 50 maintained private schools close every year, for a range of reasons. Where schools do close, pupils may transfer to another private school or move into the state sector. We simply do not accept, in the case of recent closures, that this has had any connection to our policy on VAT. Quite simply, the evidence does not bear that out. The number of pupils who might switch following these changes represents a very small proportion of overall pupil numbers in the state sector. Any displacement is likely to take place over several years, and will mostly come from parents choosing not to place their children in the private sector to begin with, rather than children leaving the private sector. All children of compulsory school age are entitled to a state-funded school place if they need one. I understand that moving schools can be a challenging experience, and local authorities and schools already have processes to support pupils moving between schools.

A number of Members also raised concerns about capacity. There are always a range of pressures on state-funded school places, and the Department for Education works to support local authorities to ensure that every local area has sufficient places for children who need them. That is business as usual and local authorities and schools already have a range of options to increase capacity where it is needed. We are confident that the state sector will be able to accommodate any additional pupils and that there will not be a significant impact on state education as a whole.

I congratulate my hon. Friend the Member for North East Derbyshire (Louise Jones) on her maiden speech. I know she will be a real champion for children and young people in her community. I also welcome my hon. Friend the Member for Bury North (Mr Frith) back to this place and congratulate my hon. Friend the Member for Glasgow East (John Grady) on his maiden speech—he spoke eloquently and with passion about his constituency and the needs of his constituents. It was also a real pleasure to hear the maiden speech from the hon. Member for Isle of Wight East (Joe Robertson), who described so well his beautiful constituency, a place I enjoyed holidaying in as a child. I look forward to working with him on issues affecting the Solent region. My hon. Friend the Member for Tipton and Wednesbury (Antonia Bance) gave an excellent maiden speech. It was evident that she will be a strong voice in this place, nationally and for her community. I congratulate the hon. Member for Horsham (John Milne) on his maiden speech, and I wish him well on his unexpected new role in this place and on delivering opportunity for all.

The hon. Member for South Shropshire (Stuart Anderson) and others mentioned military families; I know that colleagues in the Ministry of Defence and the Foreign, Commonwealth and Development Office will closely monitor the impact on affected military families, considering support via the continuity of education allowance scheme. Small faith schools were raised by a few Members; those schools meet the needs of dedicated faith communities, often at low cost. I know that Treasury colleagues have met representatives from those schools to ensure fairness. A number of right hon. and hon. Members spoke about the impact assessment. As my hon. Friend the Exchequer Secretary to the Treasury set out, we are considering the impact of the policies and will publish a tax information and impact note at the Budget in the usual way.

In conclusion, this Government were elected to deliver change across our country, not least in our schools. Our mission to break down the barriers to opportunity is exactly what our country needs. This party is showing that education is once again at the forefront of national life. I urge Members across the House to demonstrate that by voting against the motion.

Question put.

The House proceeded to a Division.

[Madam Deputy Speaker (Caroline Nokes)]

Will the Serjeant at Arms investigate the delay in the No Lobby?

Economic Growth

Stephen Morgan Excerpts

Tuesday 14th November 2023 Commons Chamber

[Stephen Morgan (Portsmouth South) (Lab)]

It is a pleasure to speak in this debate on His Majesty’s first King’s Speech.

The Prime Minister was right to say in his response last week that the country needs change, but if the people of Portsmouth needed any more evidence that this change will not come through a fifth Tory term, this King’s Speech provided it. It contained more words than any since 2005, yet had the fewest Bills since 2014, and is a perfect symbol for the latest incarnation of Conservative Government that our country is having to endure. It is a party that governs with slogans rather than actions, and that promises to level up, to provide strong and stable Government, to grow our economy, and to cut NHS waiting lists, but the reality is that for more than a decade now the only thing that this Government have provided is an impeccable record of over-promising and under-delivering.

People in Portsmouth are facing serious challenges after a decade of Conservative Government and decline, with skyrocketing mortgages, rising rents, soaring bills, and taxes at their highest level for 70 years. It was sad but not surprising to see this week that the number of food bank parcels issued in Portsmouth by the Trussell Trust has risen by nearly 70% over the past year.

People are really struggling. This King’s Speech could have focused on tackling these huge problems, but instead there was nothing to help people with the cost of living crisis; nothing to tackle rising levels of shoplifting, which are now topping 1,000 incidents per day; nothing to finally stop the sewage pollution; nothing to ensure that every child succeeds and thrives; nothing to secure the investment that our community deserves; and nothing to address the fact that there is only one dentist and GP for every 2,300 people in Portsmouth. Those are the priorities of the people of Portsmouth, those are my priorities and those will be the priorities of the next Labour Government. Sadly, though, at the moment we have to live with a Prime Minister who has given up on governing, who is content to carry on with the failures of the past decade, and whose idea of change is bringing back a failed Prime Minister from a decade ago.

With so few Bills included in the King’s Speech, there is absolutely no excuse for some of its omissions. Much-needed Bills on mental health, for renters and to support victims have been dropped. The failure to ban so-called conversion therapy represents a complete betrayal of all LGBT+ people at risk of this abhorrent treatment. We should be clear: conversion practices are abuse and it is nothing short of disgraceful that they have not been outlawed yet.

Where this Government seek to sow division, Labour will unite the country, offering people hope around a mission to get Britain’s future back: by getting Britain building again to deliver transformational infrastructure and homes for millions; by switching on green energy to create jobs, cut bills and boost energy security; by getting the NHS back on its feet so that everyone can access a dentist and GP when they need it; by ending the Tory sewage scandal so that our waters can be clean again; by taking back our streets, with 13,000 more police officers tackling crime; and by breaking down barriers to opportunity so that young people’s futures are not defined by the circumstances they are born into.

The people of Portsmouth want new ideas and a plan to get our country’s future back and to bring about the change in my city and our country that is so desperately needed. This damp squib of a King’s Speech shows that that change will not come with the Tories. It is becoming ever clearer that the Tory party is out of energy, out of ideas and—hopefully, for all our sakes—soon to be out of Government.

Oral Answers to Questions

Stephen Morgan Excerpts

Tuesday 21st March 2023 Commons Chamber

[Jeff Smith (Manchester, Withington) (Lab)]

20. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions.

[Stephen Morgan (Portsmouth South) (Lab)]

22. What fiscal steps he is taking with Cabinet colleagues to support the economy in reaching net-zero carbon emissions.

[The Exchequer Secretary to the Treasury (James Cartlidge)]

At the spending review 2021, we confirmed that since March 2021 the Government will have committed a total £30 billion of public investment for the green industrial revolution. Since then, the Government have made new announcements to provide long-term certainty on our investment plans, including £6 billion for energy efficiency from 2025 and up to £20 billion for carbon capture, usage and storage. The Government will set out further action shortly to support green industries in the UK and meet our net zero 2050 commitment.

--- Later in debate ---

[James Cartlidge]

I am grateful to the hon. Gentleman for raising the Inflation Reduction Act; I hope we all welcome what the United States is doing, because the climate is a global phenomenon and, if we are to make progress, we need the United States and other countries to do their bit. Let me be clear: we should be proud of our record to date and confident in our future, because we have huge competitive advantages on green industry. We have a brilliant record to date, we have the shallow North sea, where we have developed the biggest coastal array of offshore wind in the whole of Europe, we have a brilliant scientific base and, with the City of London and our financial institutions, we should be confident about our green future.

[Stephen Morgan]

The Institute of Directors has warned that

“the UK will find itself left behind in the accelerating race to lead the green economy.”

After a lacklustre Budget, does the Minister agree?

[James Cartlidge]

To give just one example of why we should be confident, last year 40% of our electricity came from renewables. The figure in the United States was 20%. We have a very strong record, but we are going to keep building on it. That is why we announced the £20 billion for carbon capture and storage and why we announced Great British Nuclear, because we need that baseload power to go alongside renewables and give us energy security.

Oral Answers to Questions

Stephen Morgan Excerpts

Tuesday 7th December 2021 Commons Chamber

[Rishi Sunak]

My hon. Friend is absolutely right. This Government are committed to making sure that work always pays, and that is why universal credit is such an improvement on the previous system—an improvement that the Opposition did not support at all.

[Stephen Morgan (Portsmouth South) (Lab)]

The Minister will be aware that Viktor Fedotov, the secret co-owner of Aquind, has been implicated in a £72 million fraud scheme linked to Putin’s Russia. Can the Minister say what due diligence has been done on the project company and its owners, and if he and ministerial colleagues will protect our national infrastructure from these alleged fraudsters by stopping the disastrous project once and for all?

[John Glen]

The Government remain absolutely committed to protecting this country from illicit finance. We have been a leader in the global community, making this place the safest place to do business, and we will continue in that vein.

Covid-19 Support Schemes: Ineligible People

Stephen Morgan Excerpts

Wednesday 9th December 2020 Westminster Hall

[Stephen Morgan (Portsmouth South) (Lab)]

It is pleasure to see you in the Chair, Ms Rees, and I am grateful to the hon. Member for Twickenham (Munira Wilson) for securing this debate.

I have repeatedly called on the Government to listen to the concerns of people who were not covered by the self-employment income support and job retention schemes. There has still been nothing beyond social security for those who have been excluded from support from the start, and many self-employed people remain cut out from social security support for measly reasons.

My postbag has been full of real-world examples caused by the Government’s callous neglect in recent months—from photographers to driving instructors, events organisers and wedding planners. My constituent Simone is a prime example of those who have been repeatedly allowed to fall through the net. She started out as a self-employed driving instructor very recently, so she does not qualify for the support scheme. She also cannot receive universal credit, as her partner is employed. Although she was able to start working again between the first and second lockdown, the latest restrictions mean that she finds herself unable to earn and without the ability to access support.

The Chancellor said he would do “whatever it takes” to support people and businesses through the economic impact of the pandemic, but millions across the country, including many in my constituency, know that he has not delivered on that promise. That has left those affected in Portsmouth feeling like “collateral damage”, as my constituent described it, abandoned by the Government in the face of unprecedented uncertainty. That is also economic illiteracy.

We are all asking the same question: when will the Government finally support my constituents and those across the country who have been allowed to slip through the safety net for far too long?

Oral Answers to Questions

Stephen Morgan Excerpts

Tuesday 5th March 2019 Commons Chamber

[Stephen Morgan (Portsmouth South) (Lab)]

22. HMRC has 2,000 fewer staff today than it did on the day of the referendum. Will the Minister explain the impact of HMRC cuts on the delayed timetable for the implementation of the UK’s future customs regime?

[Mel Stride]

I am confident that HMRC will be ready for the outcome of the EU negotiations, whatever that outcome is. We have taken on over 4,000 additional staff to ensure that we are ready, and we have of course invested £2 billion in additional funding since 2010 to ensure that HMRC can operate effectively.

Oral Answers to Questions

Stephen Morgan Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mr Hammond]

Earlier in this session, I said that, if we want to have well-funded public services and a well-funded welfare support system, we must ensure that we have a sound economy. Part of having a sound economy is to get our deficit under control and our debt falling so that we are less vulnerable to shocks in the future. Our current levels of debt mean that this country is vulnerable in the event of an economic downturn. Such downturns come along from time to time, and we need to be able to manage them in order, precisely, to protect the poorest in our society.

[Stephen Morgan (Portsmouth South) (Lab)]

Does the Minister agree that the Government’s idea of turning high streets into residential streets or office spaces is not a solution to solving our high street crisis?

[Mr Hammond]

That is not what the Government propose or have proposed, but we must recognise that retail is changing and that the nature of our high streets has to change. The future high street will probably be smaller than the high streets of today. It makes sense to use the land that is released around our high streets to develop residential accommodation, addressing the housing challenges that we face, but also bringing footfall back into our high streets and town centre areas to give them vibrancy and a decent chance for the future.

HMRC Estate Transformation

Stephen Morgan Excerpts

Tuesday 29th January 2019 Commons Chamber

[Mel Stride]

There has already been an equality impact assessment. It is in the public domain, but I would be very happy to share it with the hon. Member.

[Stephen Morgan (Portsmouth South) (Lab)]

Seventy-nine per cent. of staff surveyed said that the plans undermine their ability to provide tax collection. Are HMRC staff wrong?

[Mel Stride]

What is wrong is the suggestion that we are not good at collecting tax. We are world class at collecting tax. We have a tax gap of just 5.7%. If we had the same tax gap that we had under the Labour party, the missing revenue would be enough to employ every policeman and woman in England and Wales. The Conservative way works; the Labour way squanders resources.

Oral Answers to Questions

Stephen Morgan Excerpts

Tuesday 6th November 2018 Commons Chamber

[Mr Philip Hammond]

I am sure that both BEIS and the Department for Work and Pensions are already aware of that very large job loss, and I will ensure that my colleagues are looking at it.

[Stephen Morgan (Portsmouth South) (Lab)]

What role, if any, have the readiness for Brexit and resource levels of Her Majesty’s Revenue and Customs played in influencing the Prime Minister to consider extending the customs transition period?

[Mel Stride]

HMRC has a central role in ensuring that we are ready for Brexit, specifically in the unlikely event of a no-deal day one scenario. That has included the recruitment of 2,300 additional staff, and we will have an additional 5,000 staff by the end of the year. We are ready, and we will be ready, for wherever this deal lands.

Public Sector Pay

Stephen Morgan Excerpts

Tuesday 24th July 2018 Commons Chamber

[Stephen Morgan (Portsmouth South) (Lab)]

The Chief Secretary says that our armed forces will receive a 0.9% one-off payment, but there is no clear timeframe. Will she tell us exactly when armed forces personnel will receive that payment?

[Elizabeth Truss]

Personnel will receive that payment alongside their 2% pay rise this year. Many armed forces personnel will also receive pay increments—we saw an average of 1.3% last year—on top of the bonus and the pay rise.