Asked by
To ask His Majesty's Government what assessment they have made of
the implications of imposing VAT on school fees with effect from
1 January 2025.
(Con)
My Lords, I beg leave to ask the Question standing in my name on
the Order Paper. I declare an interest as chairman of governors
of Brentwood School and as president of the Institute of Boarding
and the Boarding Schools' Association.
The Financial Secretary to the Treasury () (Lab)
My Lords, the implication of imposing VAT on school fees with
effect from 1 January 2025 will be to raise revenue to fund the
Government's objective that every child has access to
high-quality education, including the 94% of children who are
educated in the state sector. It will help to fund 3,000 new
nurseries, the rolling out of breakfast clubs to all primary
schools and the recruitment of 6,500 new teachers.
(Con)
As the noble Lord is a distinguished economist, must he not
acknowledge that the impact on state schools of this vindictive
policy will be meaningless, with 6,500 extra teachers across
20,000 schools in England adding just one-third of one teacher to
each school? Yet the impact on children at independent schools
will be enormous, with the losers being those who have to leave
half way through the year because their parents cannot afford to
pay, the children of service families who rely on boarding
schools so that their parents can defend us, and children with
special needs who are exceptionally vulnerable. Their lives will
be upended for nothing—all pain and no gain. The Prime Minister
accepted £20,000 in free accommodation to ensure that his son's
schooling was not interrupted and talks about party before
country. Why will he not extend that courtesy to other children
and put them before party, and either scrap or delay this
shambolic, shameful policy?
(Lab)
I do not accept in any way the noble Lord's characterisation of
this policy. This is a necessary decision that will generate
additional funding to help improve public services, including the
Government's commitments relating to education and young people.
As far as the state sector goes, to the extent that pupils move
at all, the number of pupils who may switch schools represents a
very small proportion of overall pupil numbers in the state
sector and is likely to be less than 0.5% of total UK school
pupils, of whom there are more than 9 million.
The Lord
I wonder if I might press the Minister on SEND pupils. The
majority of SEND pupils, who were mentioned by the noble Lord,
Lord Black, do not have an education, health and care plan, and
therefore there is a genuine worry that this policy might mean
that their education is interrupted. What mitigating factors are
His Majesty's Government putting in place to ensure that this
particularly vulnerable group is supported?
(Lab)
I am of course aware that this is an area of specific concern, as
was said. Our proposed policy ensures that children with acute
needs that can be met only in the private sector, as set out in
an EHCP, will continue to be supported through their local
authority and will not be impacted by this policy change. Very
many private schools will take steps to absorb a proportion, or
all, of the new VAT liability, so there may be no increases in
fees under such circumstances.
of Kentish Town (Lab)
Will my noble friend the Minister remind the House of what
happened when we lost office in 2010? The first thing the
Government did was to cut the better schools initiative and the
plans to improve schooling for the 90% who go to state schools.
Will he ask the other side whether they will perhaps speak as
often for the 90% in state schools as they seem to want to for
the 6% in private schools?
(Lab)
I am grateful to my noble friend for making those points, and I
agree with what she said. The Government are committed to
breaking down barriers to opportunity. We are determined to drive
up standards in schools serving the overwhelming majority of
children in this country, so that they may receive the
opportunities that too often have been the preserve of the rich
and the lucky.
(CB)
My Lords, can the Minister reassure the House that the new VAT
measures will not damage the UK's ability to produce
world-leading performers in music and dance? He may not know that
for exceptional talent to succeed on the global stage it needs to
enter professional training at a very young age and at a level of
intensity that the state sector cannot provide. These schools are
far from the independent schools stereotype. They do not have
large endowments or wealthy parent bodies, and they recruit
entirely on talent, regardless of ability to pay. Can the
Government ensure that the new measures do not create a scenario
in which only the most advantaged children can have the
opportunities that their talent deserves?
(Lab)
I am very grateful for the noble Baroness's insight and expertise
on this matter. In answer to her question, that is absolutely
what we will seek. As she knows, where parents are paying fees
for their child to attend a private music or dance school they
will pay VAT on those fees following this change. The music and
dance scheme funds talented pupils from low-income families to
attend such specialist schools, and we will monitor closely any
impact of these policy changes and consider any changes to this
scheme at the forthcoming spending review.
(LD)
My Lords, this is a deeply damaging and mean measure, as the
noble Lord, Lord Black, said. It is unlikely to hurt wealthy
parents but it will hit those with limited means trying to do
their best for their children with special needs or, as the noble
Baroness, Lady Bull, said, with specialist skills. Please will
the Government at least defer to September to avoid the trauma of
mid-term changes, which I am quite sure no educationalist would
ever have agreed—I do not know who came up with this policy for a
January date? Can the Minister say whether the allowances for
children of military personnel will be increased to cover the
extra cost for them?
(Lab)
The answer to the noble Baroness's first question is no and the
answer to her second question is that that is a matter for the
spending review. I disagree fundamentally with her
characterisation of this policy. I want to see excellence in
education for children in places like where I grew up, whose
parents will never be able to afford to pay for their education.
They are every bit as ambitious for their children as any other
parent.
(Con)
Will the Minister confirm that any gains from this policy will
accrue to the education budget and that any shortfall will be met
by the education budget? Will he commit to sharing with this
House the OBR's impact assessment of the number of pupils moving
from the private sector to the state sector and the number where
the overall policy would be at a fiscal cost to the
Exchequer?
(Lab)
There were several questions there. Yes, this money will go to
the state sector; I do not accept that there will be any loss
from this policy; and yes, the OBR will publish the impact
assessment alongside the Budget.
(Lab)
Can my noble friend the Minister confirm that, over the years of
the Tory Government, education was treated shamefully? We have
lost huge amounts of money. I recognise that 6,500 teachers is
not the number we need, but it is certainly a first step in the
right direction. Will the Minister confirm that, far from being
an unacceptable policy, we need this policy to make sure that the
94% of children who are in our state schools have a fair crack of
the whip?
(Lab)
I am grateful to my noble friend for those points; I
fundamentally agree with her. As I said, this is a necessary
decision that will generate additional funding to help improve
public services, including the Government's commitments relating
to education and young people, helping the overwhelming majority
of children in state schools.
of Craigmaddie (Con)
My Lords, there are key differences between the education systems
in Scotland and England. We have a different curriculum and exam
structure; different term dates, starting dates and starting
ages; and different arrangements for teachers' pay and pensions.
Most importantly, CSPs are not the same as EHPs. A CSP is not
required for a child to go to a special school or receive extra
support. Given these fundamental differences, can the Minister
share the impact of this policy on the education system in
Scotland, given that, because of devolution, the Government
cannot guarantee that any consequential funding given to Scotland
would actually be spent on the education sector there?
(Lab)
I am grateful to the noble Baroness for her insight on those
points. I can confirm that the final policy design of this
measure will be announced at the time of the Budget, alongside a
tax information and impact note, which will include details of
the Government's assessment of the expected impacts.
(LD)
My Lords, do the Government agree that it is universally accepted
that you can get access to an education, health and care plan
only if you have money to afford lawyers to get through the
process, or at least to get through it fast? If so, are the
Government not saying to people that they can get the money only
if they have resources in the first place? Does this not
contradict a lot of what has been said?
(Lab)
I do not accept that in any way, shape or form. The whole point
is that you should have access to high-quality education whether
or not you have the money in the first place.
(CB)
My Lords, further to the question from my noble friend Lady Bull,
the Government's dance and drama award scheme enables a small
number of specialist providers to offer higher-level
qualifications, at levels 5 and 6, to some of the country's most
talented performing arts students, many of whom might otherwise
be unable to access such training. What reassurance can the
Minister give that these providers will not be affected by the
proposed VAT imposition, which might force some of them to
swithdraw completely from the scheme? What progress has been made
in the discussions on this issue, including with the Treasury,
mentioned by the noble Baroness, Lady of Malvern, in the debate on 5
September?
(Lab)
As I said earlier, we will monitor closely any impact of these
policies on the scheme mentioned by the noble Lord. The right
time to consider changes to the scheme is at the forthcoming
spending review.
