Independent School Fees: VAT

Robin Walker Excerpts

Wednesday 21st February 2024 Westminster Hall

[Mr Robin Walker (Worcester) (Con)]

I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this important debate. I speak in my capacity as the Chair of the Education Committee.

This is slightly awkward, because we do not, of course, look at policy proposals that are not from the Government. However, we had a debate about a year ago in the Chamber of the House of Commons where the Labour party proposed to bypass my Committee and appoint their own to look at this policy proposal. What was interesting in that debate, as in this one, was how few Labour Back Benchers turned up to support what is supposed to be their flagship policy. This issue has not been raised by any of the Labour members of the Education Committee during my time as Chairman. In the circumstances, I find that very surprising.

I am concerned about this issue primarily because of its impact on our publicly funded schools. I seriously worry that Labour has not done its sums properly and has not brought the impact of the £6,000 a year required for the revenue funding, let alone the capital expense of expanding those schools, into its calculations. My county council is in the process of commissioning a £40 million secondary school to meet the demand for places that we already have. No calculation appears to have been conducted of what the cost would be of the extra places required by this policy.

When it comes to SEND, I expect the Labour Front-Bench spokesman to say that Labour will exempt specialist settings from its VAT proposals. I certainly hope that that is the case, and that is what was indicated in our previous debate. However, I do not think that the revenue calculations carried out by the Treasury some years ago on the basis of imposing 20% VAT on all charges for independent schools have taken that into account. I would love it if the Labour spokesman could update us today on what reduction in income Labour expects if it does exempt specialist settings from this policy and on whether that will apply to all of them, including the alternative provision settings that my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) referred to. I recently visited one at the Gloverspiece Mini Farm in the constituency of my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), which would like the assurance that it will not be clobbered by a 20% increase in VAT and in fees.

When it comes to SEND pupils, we are talking not just about those in specialist settings. Many of my mainstream independent schools in Worcester provide support to pupils who have identified special educational needs but not an EHCP. If those people are driven out of the independent sector by higher fees, they are likely to seek EHCPs, putting pressure on our health system and our local authorities, which are already overloaded—I will campaign, along with colleagues, to try to increase the resources for them.

As Chairman of the Education Committee, I want our state education system to be one of the best in the world—it already is, but we can make it even better. We should focus on doing that, rather than on creating the misleading impression that clobbering the independent sector by imposing VAT, which no Labour Government in the last century have ever proposed to introduce, and which none of our European or English-speaking peers apply to independent education, is somehow the solution.

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[Helen Hayes]

I will not give way again. It would provide a loophole that schools could use to evade the policy.

The share of pupils being educated in private schools has consistently remained around 6% to 7%, despite fees increasing above inflation year on year for many years. Indeed, independent school fees are 55% higher in real terms now than 20 years ago. Although we do not believe the scaremongering that there will be an exodus of pupils into the state sector, our state schools would be able to cope with an increase in their numbers. Across England, overall pupil numbers are due to decline by at least 100,000 per year until 2030; the total drop is higher than the number of children currently attending private schools.

[Mr Robin Walker]

Will the hon. Member give way on that point?

[Helen Hayes]

I give way to the Chair of the Select Committee.

[Mr Walker]

That is very kind; I am grateful to the hon. Member for giving way. I just want to make the point that, yes, the overall numbers are declining, but that is primarily in primary. The demographic bulge, as she well knows, is coming through into secondary schools, and secondary schools in many areas of the country are full. How does the Labour party plan to deal with that?

[Helen Hayes]

As the hon. Member rightly points out, what happens in primary flows into secondary, so secondary schools across the country, including secondary schools in my constituency, are absolutely aware of the drop in numbers that is coming down the track, and we are seeing secondary schools in London closing—two of them this year—because that flow is starting to affect them.

The Labour party believes in parental choice, but the conversation today has to take place with fairness in mind. In 2022-23, average independent school fees were £15,200, but average state school spending per pupil was £8,000. The gap in funding between independent and state school spending has more than doubled since 2010. With the £1.3 billion of funding that would be raised each year from our measure, we could significantly increase school spending, allowing the Government to drive high standards across our state schools too. The Government are consistently missing their targets for teacher recruitment and face teachers leaving the profession in droves. We would use that money to recruit and retain more than 6,500 additional teachers.

There is considerable evidence of the need to improve and the benefit from improving teacher training, so Labour will work with schools to deliver a teacher training entitlement, throughout every stage of a teacher’s career, to deliver evidence-based, high-quality professional development.

We need to look again at school inspection and improvement—

Autumn Statement

Robin Walker Excerpts

Wednesday 22nd November 2023 Commons Chamber

[Jeremy Hunt]

I know that the hon. Lady would not ask me to comment on an individual case, but I say to her that what we are introducing is not workfare; it is support to help people into work. We are spending £2.5 billion over the next five years to help more than 1 million people. We think that that is the route out of poverty and away from dependency.

[Mr Robin Walker (Worcester) (Con)]

I welcome the Chancellor’s comment that a world-class education is essential for economic growth, and there are many measures to welcome, including the extra funding for the Holocaust Educational Trust, the £50 million for apprenticeships and the tax cuts of more than £600 for teachers. Of course, many people working in education will also welcome the nearly 10% increase in the national living wage, but it will put great pressure on schools employing teaching assistants and on our nurseries, which we are so keen to expand and support. Can I urge the Chancellor to engage closely with the sector and with the Department for Education to make sure that we can meet those pressures when it comes to funding high needs in our schools and to growing the early years sector?

Mortgage Charter

Robin Walker Excerpts

Monday 26th June 2023 Commons Chamber

[Jeremy Hunt]

We will do everything we possibly can to help people in difficulties, except measures that are themselves inflationary.

[Mr Robin Walker (Worcester) (Con)]

I welcome the fact that my right hon. Friend, in tackling this huge challenge, is determined not to increase inflation. Does he recognise, however, that with so many people owning their properties outright and not having a mortgage on them today, increasing the payment for people who save is a very important element in tackling inflation? I wish him every success in his further conversations to encourage the banks to pass on interest rates to savers.

[Jeremy Hunt]

My hon. Friend is absolutely right. If more people are encouraged to save, that is technically counter-inflationary and something to be encouraged.

Oral Answers to Questions

Robin Walker Excerpts

Tuesday 21st March 2023 Commons Chamber

[Andrew Griffith]

I welcome the universal credit reforms we have made, and also the fact that under this Government, by raising the basic income tax threshold, we have taken up to 3 million workers out of income tax altogether.

[Mr Robin Walker (Worcester) (Con)]

T8.   I warmly welcome the Chancellor’s big decision to invest in childcare and the early years in this Budget. One witness to the Education Committee—a long-standing campaigner on these issues—said they were elated to see the commitment the Chancellor made. Going forward, may I encourage him to continue to listen to the concerns of the independent and voluntary sector, which is crucial to the success of reforms in this space? I know he is a fan of workforce plans, so may I encourage him to consider the case for an early years workforce plan?

[Jeremy Hunt]

I thank my hon. Friend for his campaigning on this issue. He has long been a voice for reforms to childcare. He is absolutely right that this is one of the biggest sets of childcare reforms we have ever seen. That is why we are taking two and a half years to scale it up. We want to make sure that parents who want to take advantage of the new free hours offer can get the supply of childcare they need, and we will listen very carefully to what the Select Committee says.

Autumn Statement

Robin Walker Excerpts

Thursday 17th November 2022 Commons Chamber

[Jeremy Hunt]

I have to say that I think local councils are welcoming today’s announcement because the biggest item of expenditure that worries them the most is their social care budgets, and this is the biggest-ever increase in the social care budget. I am pleased that the hon. Gentleman has read the report into social care that the Health and Social Care Committee produced when I was the Chair—I sometimes worry whether people actually read the reports—and he is right to point to that £7-billion figure. That was made up of about £5 billion in core funding and £2 billion for the Dilnot reforms. Today, we are delivering nearly that £5 billion of funding and the Dilnot reforms will happen at a later stage, so it is not everything at once, but it is broadly consistent with what I recommended.

[Mr Robin Walker (Worcester) (Con)]

I welcome my right hon. Friend’s correct focus on putting education and skills at the heart of his statement. I was one of many Conservative Members who wrote to ask him to protect the schools budget, and he has gone further than that with the additional £2 billion over each of the next two years. That is welcome, but can he confirm that it is his assessment and that of the Department for Education that that will allow schools to fund the increase in teaching pay that has been recommended and the increase in non-teaching pay that they will face as a result of a rising living wage?

[Jeremy Hunt]

Those are details—within the structures we have, we give schools a lot of autonomy as to how they spend their budgets—but I am happy to write to my hon. Friend on those specific issues. Campaign organisations said that schools needed £2 billion a year, and this is £2.3 billion a year, so I think we have met people’s concerns.

Economic Update

Robin Walker Excerpts

Monday 17th October 2022 Commons Chamber

[Jeremy Hunt]

Until the hon. Gentleman got to the end bit, I was going to say that that sounded like the question I should have been asking the previous Chancellor as Chair of the Health and Social Care Committee. I am very aware that the NHS does not just cost us money but can contribute to our growth. There is an enormous opportunity for this country to become one of the life science giants of the world.

[Mr Robin Walker (Worcester) (Con)]

I welcome my right hon. Friend to his place and I welcome his focus on both fiscal responsibility and compassionate conservatism. Further to his welcome answer to my right hon. Friend the Member for Harlow (Robert Halfon), does he agree that money invested in the skills and education of the most disadvantaged is money well spent and will benefit the future fiscal growth and stability of our country?

[Jeremy Hunt]

I absolutely do, and I think that there are many economists, such as Paul Johnson, who would say that if we really want the productivity, levels of wealth and prosperity of places such as Germany and Singapore, the skills gap is the biggest gap that we have. It is scandalous that for decades Governments from all parts of the House have not been able to deal with the fact that about 100,000 people leave school every year unable to read. These are important issues, but I want to be honest: this is not something that the Government or I can address in the next two weeks, but it is absolutely something that we will have to come back to.

Oral Answers to Questions

Robin Walker Excerpts

Thursday 9th June 2016 Commons Chamber

[The Minister for Culture and the Digital Economy (Mr Edward Vaizey)]

That is a very good question. Britain was at the forefront of negotiating the reduction in roaming charges, working with our European partners, and it is yet another example of the benefit to consumers and citizens of being a member of the European Union.

[Mr Robin Walker (Worcester) (Con)]

After the huge success of the London Paralympics, we all saw how Paralympic sport can inspire. Will the Secretary of State join me in congratulating my six Worcester constituents, who have been selected to represent ParalympicsGB in the wheelchair basketball at the Rio Paralympics?

[The Parliamentary Under-Secretary of State for Culture, Media and Sport (Mr David Evennett)]

I should be absolutely delighted to do so. I think it is very important that we wish all our athletes great success in Rio. The Paralympics are just as important as the Olympics and we wish them all success in their ventures.

UK Economy: Post-Referendum Assessment

Robin Walker Excerpts

Monday 23rd May 2016 Commons Chamber

[Mr Gauke]

The hon. Gentleman is right that under the more severe shock scenario, unemployment would increase by 800,000 and GDP would be 6% lower than it would otherwise have been. These are significant numbers. They are not equivalent to the great depression, but they are still significant numbers that would have a significant effect on his and my constituents. The hon. Gentleman raises an important point, and I hope we will get greater clarity about exactly what leaving the EU would involve. It seems to me that there is a clear trade-off: the closer a country is to membership of the EU, as for example with the European economic area model, the more it will continue to have the attributes of EU membership; the further away it is, it may have that greater freedom and flexibility, but it will clearly face a much bigger economic shock.

[Mr Robin Walker (Worcester) (Con)]

Inward investment is crucial to this analysis, and my constituency attracts it from China, Australia and the United States as well as from Japan. One crucial factor that has led me to believe that we are stronger in is the fact that all those countries and their businesses want to see us as part of Europe. Indeed, some of those inward investments are European headquarters. What estimate has the Treasury made of the potential relief rally in investment in this country, as and when we choose to stay in?

[Mr Gauke]

That is an important point. Anyone who has met international investors who are considering where to locate their European headquarters, for example, will be aware that they value and support membership of the European Union. Without that, it would clearly be harder to attract some of that inward investment. My hon. Friend also raises an important point about whether we would see a recovery. Evidence suggests that there has been a slowing down of investment due to the uncertainty about our relationship with the EU, but that—the Bank of England has supported this view, if not the IMF—there is likely to be a reasonably quick recovery if we vote to remain on 23 June, and we would see the investment coming back without a long-term detrimental impact.

Tax Avoidance and Evasion

Robin Walker Excerpts

Wednesday 13th April 2016 Commons Chamber

[James Cartlidge]

It is a sign that the rich are paying more tax. How does that make society more unequal?

Let me talk about the measures that we should be pursuing. Yes, we should be cracking down on aggressive tax avoidance, but if we are to help people across society to have a share, we need measures such as the national living wage, which was introduced on 1 April by a Conservative one nation Government. There are those who say that the national living wage is not generous enough. They have obviously not been reading The Guardian, which recently used The Economist’s Big Mac index to prove that the national living wage is more generous than the minimum wage in any other European country except Luxembourg. Only in Luxembourg can someone buy more burgers with the minimum wage than they can with the national living wage in this country. [Interruption.] The hon. Member for Glasgow South (Stewart Malcolm McDonald) asked what this had to do with tax avoidance. The underlying issue is fairness. It is about how we achieve an economy in which there is a widespread sense that everyone has opportunity and the chance to earn a decent wage.

We are delivering that in circumstances far more adverse than those that faced the Government before 2010. We have had a small majority and the first coalition since the second world war. We have had the biggest deficit since the second world war—11.5% of GDP—which we have cut by two thirds. In that context, it is difficult to grow our way out of such a problem and deliver fairness. [Interruption.] The hon. Member for Glasgow South keeps chuntering, but he is not adding a great deal to the debate.

[Mr Robin Walker (Worcester) (Con)]

My hon. Friend is talking about fairness and about some of the challenges that we faced with the deficit that we inherited. Is he not proud that in those circumstances, not only have we shifted income tax from the lowest paid to the highest paid, but we have helped small businesses? Through the reforms to business rates, we will take many smaller businesses out of business rates altogether while making multinationals pay more.

[James Cartlidge]

My hon. Friend is absolutely right to mention small businesses. I used to say to people that I ran a small business, but measured by the amount of corporation tax we paid, we were bigger than Google. The fact is that those who run small businesses feel as though they have to comply. They cannot afford expensive lawyers. I agree with the hon. Member for Newcastle upon Tyne North about the sense that there is an elite who live by different rules. We have to deal with that, but we must not run away from the key point—my concluding point—with which my hon. Friend the Financial Secretary also concluded, namely that when we talk about transparency, the transparency that really matters to the public is about our ideals and our beliefs.

What do we really believe? I fundamentally believe in the free market. I believe in capitalism. I believe in individuals getting out there and using their creativity to earn their way in the world. We cannot go back to paying our way through debt and unsustainable public finances. In the circumstances, we need to maximise the tax that we get, but we also need to maximise the investment into the country from companies that we have heard the Labour Front Benchers criticise. Those big professional firms in London are massive employers in this country. We need to expand our exports from the services sector. Basically, we need a positive, free enterprise agenda with a fair sense that companies and individuals are paying their fair share, which does not denigrate the free market but creates sustainable growth to deliver prosperity for all.

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[Robert Jenrick (Newark) (Con)]

Like the hon. Member for Newport West (Paul Flynn) I thought that the most important thing to come out of the Panama papers was the revelation of criminality and corruption here and abroad. I hope that HMRC and authorities around the world will take note and bring prosecutions, and that that will lead to further crackdowns on corruption, including in places such as China, where I would not like to be one of the individuals named in the Panama papers. It is right that the authorities should take action.

Like my hon. Friend the Member for Bracknell (Dr Lee), I believe that this issue cuts to a question of trust, but the antidote to mistrust is not moralising or phoney outrage; it is credible, practical action that makes a difference and which the public can believe in. That is what the Government have been doing. Just because some Members of the House or the media have not followed this issue; just because the right hon. Member for Islington North (Jeremy Corbyn) did not say anything about this matter during 13 years of the Labour Government; just because he sat on the British Overseas Territories Bill Committee and did not raise any issues of tax evasion; and just because he referred to the Labour Government taking control of the Turks and Caicos Islands as “medieval” and “extremely undemocratic”; and just because others have taken their eye off the ball, it does not mean that the Prime Minister or Government have done the same.

Let me say a few words about the key things that the Government have done, many of which have already been mentioned. Raising the issue of tax evasion at the G8 summit and creating the world’s first public beneficial register of ownership was a major historic development. Many campaigned against it, actually for perfectly legitimate reasons, such as that it is a massive invasion of the privacy of law-abiding people. However, it is a huge step forward in the campaign against tax avoidance and evasion. It is happening in this country first, and we should be proud of that and not make it seem as if it is something that we take for granted. This Government were the first to do that, and other major economies around the world, like the United States, have not done that.

In one month the all-party group on corporate governance, which I help to run, will bring Chief Justice Leo Strine, who runs the Delaware Supreme Court, to Parliament. If Members care about this issue, and if this is not just phoney outrage, they should come to that event and question him about why Delaware—the state in which 90% of the major corporations of the United States are registered—has not yet followed the lead of this Prime Minister. We should encourage him to do the same.

The general anti-avoidance law was another major and controversial measure taken by the previous coalition Government. It was opposed by the Labour party. At the time, the Labour party spokesman said it was inadvisable to take this action until after the conclusion of the base erosion and profit shifting process, so it would not have happened under a Labour Government. It happened under a Conservative and Liberal Democrat Government.

[Mr Robin Walker]

My hon. Friend is making a very interesting point. May I add another initiative which, to be fair, was an initiative of the previous Labour Government? The extractive industries transparency initiative was brought in by Labour, but it did not sign the UK up to it. This initiative is very important for raising tax revenue not just in the UK but around the world, and for making sure there is proper transparency as to where the extractive industries pay their money. Many of us, cross-party, campaigned for that. The Business, Innovation and Skills Committee said it was a mistake for the previous Government not to have signed up to it. This Government have, quite rightly, taken us into it.

[Robert Jenrick]

The point my hon. Friend makes is that practical and credible policies are the way to tackle this issue. We have seen results, contrary to some of the accusations we have heard today. According to the latest HMRC figures, the tax gap was higher in 2009-10 than it is today. The tax gap for corporations, large and small, was 40% to 50% higher. The tax gap for stamp duty was 40% higher under the previous Labour Government than it is today. Loopholes have been closed and practical measures are being brought in. By no means is this the end of the story—of course there is more to do—but I am pleased to say that the UK Government are genuinely leading the world on this issue. I want to see them do a lot more.

Lowering taxes is another important element in encouraging good behaviour, both by individuals and corporations. Corporation tax at 17%, versus 30% in the United States, will be a major step forward. Only the other day, President Obama was forced to take action against Pfizer because of its motivation to move to lower tax jurisdictions because of the 30% corporation tax in the United States.

There is more to do. I do not stand here for one minute claiming that this is mission accomplished, but we have to be clear that a lot of good steps have been taken. It is bad for business to have tax havens operating as they do today. Let me give Members a brief example from a previous career I had working as a managing director of an art business. Many valuable works of art are held in Panama and other such places. One dispute, over the ownership of a painting that had probably been seized by the Nazis, lasted for four years. The likely owners claimed that they did not know anything about the painting or who owned it. That has been revealed, thanks to the Panama papers, to be an outright lie. The Nahmad brothers, global collectors of art, were revealed to be the owners. I suspect that that painting will finally be going back to its legitimate owner in the near future. Tax havens operating as they do today is bad for individuals and bad for business, particularly in such disputes.

I want to close by commenting on tax privacy, an issue raised both in the press, by Polly Toynbee and others, and by my hon. Friend the Member for Bracknell. I think this would be a seriously detrimental step for the privacy of individuals in this country and all over the world. The last major occasion I can think of when this occurred in a large developed economy was during the civil war in the United States. To try to encourage compliance when income tax was introduced, tax returns were posted on the walls of courthouses across the United States. It was one of the most unpopular policies in the history of the United States and it did not increase compliance. The Secretary of the Treasury, Andrew Mellon, said:

“It was utterly useless from a Treasury perspective, just the gratification of idle curiosity and filling of newspaper space.”

Setting aside Prime Ministers and politicians, let us defend the right of individuals in this country to have privacy in their business and financial affairs. The legitimate, law-abiding citizens of this country should not be the losers from some individuals taking part in criminal acts.

Budget Changes

Robin Walker Excerpts

Monday 21st March 2016 Commons Chamber

[Mr Gauke]

That was not even the allegation. The reality is that, if we look at spending on disability living allowance and personal independence payments, it has gone up since 2010 by £3 billion—that is not a Government who are cutting at the expense of disabled people.

[Mr Robin Walker (Worcester) (Con)]

Will the Minister confirm that, as well as continuing to take thousands of my constituents out of paying income tax, and as well as shifting the burden of taxation from small businesses, through business rates, to multinationals, the Government remain committed to a progressive target of halving the disability employment gap?

[Mr Gauke]

Indeed. My hon. Friend makes a good point, and he is absolutely right to raise that. As I pointed out earlier, my right hon. Friend the Secretary of State for Work and Pensions will address that point, I am sure, later this afternoon.