James Murray MP: speeches

Speeches

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I will.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I will make a bit of progress, because I have been quite generous in giving way so far. I want to address some of the questions that the shadow Secretary of State asked in his speech, particularly about why we are introducing this policy from 1 January 2025. The reason we are doing so is simple: we want to raise the funding we need as soon as possible to deliver our education priorities for state schools across the country. Importantly, a January 2025 start date means that schools and parents will have had five months to prepare for the VAT change, and His Majesty’s Revenue and Customs stands ready to make sure schools are supported in delivering it.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I have made clear the reason why we are proceeding with this policy to a January 2025 date, which is that we want to raise the money as soon as possible to invest in our improvements to state education. There will have been five months for parents and schools to prepare for the change.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  As the hon. Member knows, there are established processes for developing tax information and impact notes. This one will be developed in line with the OBR costing in the normal way and published alongside the Budget, so she will see all the information.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I thank my hon. Friend for her comments. She is absolutely right to say that we need to improve SEND provision for all children in this country in a financially sustainable way, and she speaks with great experience.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  Neither I nor any of my colleagues will make any apology for wanting to improve state education across this country to make sure that the aspiration of every parent in our country to get the best possible education for their children can be fulfilled. That is why we have announced that any fees paid from the date of the July statement, 29 July, relating to the term starting in January 2025 onward will be subject to VAT.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I will make a bit of progress. In our consultation on the technical detail of this policy, we have been engaging widely and in depth, and the views of MPs are an important part of that. As I said earlier, it has been a tough but necessary decision to end tax breaks for private schools. We believe it is the right decision, and one we need to implement as soon as possible to help raise the funding that we need to deliver our priorities for state education in this country. We are determined to make sure that education, which is available for all, is of the highest possible quality, because that is how we ensure that we meet the aspiration of every parent to get the best possible education for their children.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I am not quite sure what happened there, but I will carry on. I was making an important point, which is that the Government will monitor closely the impact of our policy changes on affected diplomatic and military families, with any changes to the scheme being considered as part of the ongoing spending review.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  We will take a community-wide approach that sees improved SEND provision in mainstream state schools, as well as ensuring that state special schools cater for those with the most complex needs.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  This Government were elected to break down barriers to opportunity. We are determined to fulfil the aspiration of every parent in our country to get the best education for their children. We are committed to doing so by improving state schools and making sure that every child has access to a high-quality education. We will start to make this happen by expanding early years childcare for all by opening 3,000 new nurseries across England. We will recruit 6,500 new teachers, alongside improving teacher and headteacher training, and we will roll out further mental health support to schools and colleges in England. Those improvements to the state education system will begin our work to make sure every parent’s aspiration for their children can be fulfilled. We want to get on with these important changes right away, and to do so, they must be paid for. That is why to help fund improvements to our state schools, we have made the tough but necessary decision to end tax breaks for private schools. In the July statement, the Government announced that as of 1 January 2025, all education services and vocational training provided for a charge by a private school in the UK will be subject to VAT at the standard rate of 20%.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I am still responding to the hon. Member for Hinckley and Bosworth (Dr Evans), so please let me come back to that point. HMRC is putting in place bespoke guidance, and it is standing by to make sure that schools are properly registered for the change. All the evidence we have seen from the IFS and so on suggests that the impact on the state sector will be very small, which means that it will not have a material effect on children’s education.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  My hon. Friend makes an important point about the reason why we have taken the tough decision to end tax breaks for private schools. It is to fund our education priorities, because we know that the way to improve opportunities for people right across this country is to make sure that our state schools can provide the best-quality education for all children.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I thank the right hon. Member for her contribution. First, in terms of an impact assessment, while developing these policies, the Government have carefully considered the impact they will have on pupils and their families across the state and private sectors, as well as the impact they will have on state and private schools. In addition to having reviewed analysis published by third parties such as the Institute for Fiscal Studies, the Government have conducted their own analysis of the likely impacts of these policies, which draws on a range of sources.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I have given way quite a lot, so I am going to make a bit of progress. Alongside the announcements about VAT, the Government announced in July that private schools in England with charitable status would lose their eligibility for business rates charitable relief from April 2025, subject to parliamentary passage of the legislation. Those changes were set out in a technical note that was published online alongside draft VAT legislation, which together formed a technical consultation. As part of that consultation, the Government—both at official and ministerial level—have engaged with a broad range of stakeholders, including the devolved Governments. We have listened carefully to the points that people have raised with us. We recognise that while this policy will raise revenue to help support improvements in the state education sector, it may lead to increased costs for some parents and carers whose children are in the private education system. However, let me be clear: while private schools will now be required to charge VAT on the education services and vocational training they provide, we expect that most private schools will be able to absorb a significant portion of this new VAT charge and keep fee increases affordable for most parents. They will be able to make efficiencies and recover the VAT they incur on the things they buy. Those recovered costs can be used to offset increases for fee payers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  Let me make a bit of progress. We want to improve state schools across this country so that when people have children with special educational needs, they never need to send them to a private school because the provision in state schools is better. That is the crucial point behind our approach, which my hon. Friend the Member for Thurrock (Jen Craft) was right to highlight.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I am still replying to the hon. Member’s right hon. Friend. [ Interruption. ] Maybe Conservative Members could sort this out on their side of the House before they come into the Chamber, but I will continue replying to the right hon. Member for Witham. Turning to the legal cases, the Government have considered the policy’s interaction with human rights law and are confident that it is compatible with the UK’s obligations under the Human Rights Act. I hope that addresses the right hon. Member’s concerns.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I am going to make some progress. I am sorry, but I have taken a lot of interventions. I would like to address the issue of special educational needs. It is a point that many hon. Members have raised, and I know that some parents are concerned about the impact of this policy on pupils in private schools with special educational needs. Let me start by saying that we have considered this element of the policy very carefully. Our proposed policy makes sure that pupils will not be impacted where they have acute additional needs and an education, health and care plan in England, or its equivalent in other nations, specifies that these can be met only in a private school.

• 8 Oct 2024 · VAT: Independent Schools · Hansard source

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  I am going to make a bit of progress. To address some other points raised in this debate, we know that a small number of diplomatic officials and service personnel are posted abroad for extended periods. In such circumstances, the Foreign, Commonwealth and Development Office and the Ministry of Defence provide the continuity of education allowance to ensure that this does not interfere with their children’s education. I can give the reassurance today that the Government will monitor closely the impact of these policy changes on affected diplomatic and military families, with any changes to the scheme being considered as— [ Interruption. ]

• 8 Oct 2024 · Independent Schools: VAT and Business Rates Exemptions · Hansard source

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  It is a pleasure to speak in this debate with you in the Chair, Dame Caroline. I start by congratulating the hon. Member for Bromsgrove (Bradley Thomas) on securing this debate, and thanking all hon. Members for their contributions. I have listened carefully and, although I do not have much time, I will attempt to address as many of the points raised as possible. Every member of the Government cares deeply about education, and we are committed to breaking down barriers to opportunity. We are determined to fulfil the aspirations of every parent in our country to get the best education for their children. We are committed to doing so by improving state schools, and by making sure that every child has access to high-quality education. We will start to make that happen by expanding early years childcare for all, by opening 3,000 new nurseries across England. We will recruit 6,500 new teachers, alongside improving teacher and headteacher training. We will roll out breakfast clubs to all primary schools, so that no child starts class too hungry to learn. Those improvements to the state education system will begin our work to make sure that every parent’s aspiration for their child can be fulfilled. We want to get on with those important changes right away, and to do so, they must be paid for.

• 8 Oct 2024 · Independent Schools: VAT and Business Rates Exemptions · Hansard source

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  I have only a few moments left to address a number of points, so I will make some progress. Several hon. Members in their contributions today also raised their concern about the impact of the policy on pupils in private schools with special educational needs. We have carefully considered that element of the policy. Our proposed approach makes sure that pupils will not be impacted where they have acute additional needs and an education, health and care plan—in England, or its equivalent in other nations—specifies that those can be met only in a private school. In such cases, where a pupil’s needs can be met only in a private school, local authorities will fund their places and will be able to reclaim VAT. Similarly, on business rates, the Government are developing an approach to address the potential impact of the changes in cases where private school provision has been specified for pupils through an EHCP. More widely, as a Government, we are committed to transforming the system for supporting children and young people with SEND in all schools. We need to deliver better outcomes in a financially sustainable way. I close by again thanking all hon. Members for taking part in this debate. In our consultation about the technical detail of this policy, we have been engaging widely and in depth, and of course the views of MPs are an important part of that. As I said earlier, it has been a tough but necessary decision to end tax breaks for private schools. We believe it is the right decision and one we need to implement as soon as possible to help raise the funding we need to deliver our priorities for state education in our country. We are determined to improve the education that is available to all, because that is how we will ensure that the aspiration of every parent to get the best possible education for their children can be fulfilled.

• 8 Oct 2024 · Independent Schools: VAT and Business Rates Exemptions · Hansard source

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  I am going to make some progress. Those recovered costs can be used to offset the increases to feepayers. We are already seeing that some schools have committed to absorbing the VAT liability entirely, while others are choosing to cap fee increases at 5% or 10% to keep fees as low as possible for parents. Members have asked today why we will introduce this policy in January 2025. The reason for doing so is simple: we want to raise the funding we need as soon as possible to deliver our education priorities to state schools across the country.

• 8 Oct 2024 · Independent Schools: VAT and Business Rates Exemptions · Hansard source

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  I do not have much time and I need to address the other points that hon. Members have made in this debate. Importantly, a January 2025 start date means that schools and parents will have had five months to prepare for the VAT change. HMRC is ready to ensure that schools are supported in delivering this change. To respond to the shadow Minister’s comment, HMRC will put in place a number of measures to ensure that all private schools can be registered ahead of 1 January 2025, including publishing bespoke guidance on gov.uk ahead of 30 October, updating registration systems and putting additional resource in place to help process applications. Ahead of the policy being implemented, the Government have carefully the considered the impact the changes will have on pupils and their families across both the state and private sectors, as well their impact on state and private schools. The Government’s costings of this policy are currently being scrutinised by the independent Office for Budget Responsibility. The Chancellor will confirm our approach to the measures at Budget, where we will set out our assessment of the expected impacts of the change in the normal way. We recognise, as some hon. Members have raised, the changes may lead to some pupils moving into the state education sector. However, we believe that the number of pupils who may switch schools as a result of the changes will represent a very small proportion of overall pupil numbers in the state sector and such switches will take place over several years. We are confident that the state sector will be able to accommodate any additional pupils.

• 8 Oct 2024 · Independent Schools: VAT and Business Rates Exemptions · Hansard source

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  I will make some progress first. That is why, to help fund those improvements to our state schools, we have made the tough but necessary decision to end tax breaks for private schools. At the July statement, the Government announced that as of 1 January 2025, all education services and vocational training provided by a private school in the UK for a charge will be subject to VAT at the standard rate of 20%. Any fees paid from the date of the 29 July statement, relating to the term starting in January 2025 onwards, will be subject to VAT. As hon. Members know, the Government also announced that private schools in England with charitable status would lose their eligibility for business rates charitable rate relief from April 2025, subject to parliamentary passage of the legislation. Those changes were set out in a technical note published online, alongside draft VAT legislation, which formed a technical consultation. As part of that consultation, the Government, at both official and ministerial level, engaged with a broad range of stakeholders, including the devolved Governments, to make sure that we understand the impact of the policy in each nation of the UK. We have listened carefully to the points people have raised with us. We recognise that, while this policy will raise revenue to help support improvements in the state education sector, it may lead to increased costs for some parents and carers whose children are in the private education system. Let me be clear that while private schools will now be required to charge VAT on the education services and vocational training they provide, we expect most private schools will be able to absorb a significant proportion of this new VAT charge to keep fee increases affordable for most parents. They will be able to make efficiencies and recover the VAT they incur on the things they buy.

• 10 Sept 2024 · Winter Fuel Payment · Hansard source

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  I will make some progress, because it is important to explain why we are choosing to means-test the winter fuel payment. Means testing will allow us to make sure that those in the greatest need still receive the help they need. We will make sure that all pensioners continue to benefit from the triple lock, and we will start to deal with the shocking state of the public finances that we have inherited.

• 10 Sept 2024 · Winter Fuel Payment · Hansard source

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  I think the hon. Lady unintentionally misunderstood my point. I will put the question back to her. Does she feel that pensioners who have wealth of over £1 million or who earn more than £41,600 a year should get the winter fuel payment in the context of the financial circumstances? The argument we are making is that, given the dire economic situation we face and given our dire inheritance, we should means-test the winter fuel payment.