Finance Bill (No. 2) - New Clause 7 - Review of effects of sections 50 and 51 on housing market

Called for adherence to parliamentary procedure and did not make specific arguments about the bill or amendments.

Proposed new clauses 8 and 9 which require statements to Parliament on the impact of charging VAT on private school fees, focusing on pupils with special educational needs, small rural schools, faith schools, and those in the music and dance scheme.

Defended the government's decision to end VAT exemption for private school fees, stating that it would raise £1.5 billion in its first year and £460 million in 2024-25. He mentioned that around 37,000 fewer pupils will be in the private sector due to policy changes.

Questioned the government's terminology of 'tax breaks' and argued that imposing VAT on education is unprecedented in a civilised democracy, implying it is not just about removing exemptions but imposing taxes.

Asked if the impact on children being withdrawn from schools had been greater than expected, suggesting that previous underestimations of policy impacts should be considered.

Questioned why changes were imposed from January rather than at natural transition points, suggesting it is not fair on parents affected and could be considered cruel.

Raised concerns about a lack of spare places in independent schools for certain years, potentially disrupting children's exam training due to policy changes.

Asked why there is no tax exemption on tampons but one for private schools, suggesting this reflects priorities of Conservative members.

Asked for clarity regarding VAT implications on school fees that combine various elements like meals, which could create accounting problems.

Asked about the impact of policy on pupils receiving continuity of education allowance and its implications for armed forces and diplomatic service recruitment.

Independent schools will have to convert their community facilities into revenue-making machines or face significant cuts, negatively impacting local communities and school partnerships.

Independent schools in Hertsmere partner with state schools, providing opportunities for 1,400 pupils weekly. The new tax will harm these partnerships and reduce educational opportunities.

Asked about the tax on aspiration, emphasised that Labour seeks to encourage aspiration for all children in every school setting.

Referred to significant cuts to state schools since 2010 and questioned the consistency of Conservative criticism on education funding.

Warned about the severe impact on children with special educational needs due to unaffordable fees, potentially overwhelming state provision.

Highlighted East Riding of Yorkshire's low funding for special educational needs per pupil compared to other areas, suggesting additional strain on local authority support.

Expressed gratitude for rebuilding Tiverton high school but disassociated from some personalised attacks. Mentioned grandparents saving money to support children’s education at independent schools.

Supports the amendment, emphasising the urgent need to fund state education. Argues that private school spending per pupil is nearly 90% higher than in the state sector and notes a significant rise in real terms since 2003. Mentions opposition from Falkirk council towards reducing learning hours affecting pupils' educational journey.

Intervened to comment on the absence of SNP MPs, expressing surprise at their lack of presence given their record on education in Scotland. Criticises the opposition's stance as disappointing.

Ms Wilson supported new clause 9, arguing against the imposition of VAT on school fees. She pointed out that the tax is counterproductive and unfair to families who choose independent schools for their children's special needs due to inadequate state provision. She highlighted statistics indicating the over-subscription of special education schools and delays in issuing EHCPs, underscoring her concern for the well-being of SEND pupils.

Mr Stuart interjected to remind Ms Wilson that Brexit was supported by the British people, not just the Conservative party. He suggested that her criticism of the government's decision on VAT imposition lacked respect for the democratic choice.

Mr Arthur acknowledged the challenges described by Ms Wilson but argued that the policy aimed to raise income necessary to improve outcomes for all children. He suggested her position defended the existing system at the expense of potential improvements.

Ms Jardine raised concerns about the policy's impact on Scotland, questioning how funds from VAT in the UK would be allocated to improve Scottish state education. She warned that parents might withdraw children from independent schools due to financial constraints, exacerbating pressure on already strained state resources.

Intervened to argue against characterising parents who send their children to private schools as those who can afford it easily. She suggested that taxing these families could harm the children and place additional burdens on the state system, contrary to raising money to help others.

Suggested it makes more sense to encourage people not to use the state for provision, thereby saving state funds that can be used elsewhere. This reflects a broader disagreement with Labour's approach to taxation and public spending.

Questioned the impact of removing the VAT exemption for children with special educational needs in independent schools, citing Milton Friedman’s advice that taxing something leads to less of it. He also interjected about the relevance of debate to VAT on private schools.

Extended congratulations and asked for further elaboration on Dr Sandher's vision, particularly regarding affordable housing needs for young families in medium-sized towns and cities across the country.

Mr Hinds argues against the measures, citing concerns about significant educational disruptions, financial burdens on families, and impacts on faith communities. He emphasises the need for a post-legislative review of the music and dance scheme to assess its long-term impact.

Mr Van Mierlo raises concerns about SEND provision for children returning to state schools, highlighting the additional burden this could place on them.

Mr Morello cites an example from his constituency where a primary school estimates that approximately 20% of their students would have additional SEND requirements if they were in the state system, indicating potential cost increases for local councils.

Mr Brash questions Mr Hinds about the current state of special educational needs provision and whether he regrets aspects of it, implying that some families feel they must pay for private education to meet their children's needs.

Critiques Labour's proposal to impose VAT on independent school fees as a tax on education, stating it punishes ordinary families who have made sacrifices for their children's schooling. Argues that this measure undermines parental choice and disrupts educational stability without improving state education quality.

Opposes the imposition of VAT on independent school fees, arguing that it will harm families and worsen educational inequality. Emphasises the importance of funding state schools through equitable means without restricting parental choice or penalising working-class families.

Supports new clause 8 to ensure accountability for the VAT measure, criticises Labour's framing of the policy as punitive and divisive. Argues that imposing VAT is unjustified and fosters resentment without factual basis.

He argues that the policy is harmful to independent education, causing significant disruption for children studying in independent schools due to the move to state schools. He cites data suggesting his constituency will be heavily impacted with 500-1,000 children needing to switch to state schools, affecting their academic progress and social life.

She supports new clause 9, arguing that it would protect children with special educational needs who do not have an EHCP from being forced into state schools due to increased fees. She warns about the potential strain on local authorities and state schools unable to manage the sudden influx of students with SEND.

Mr. Cocking provided a detailed case study of Haileybury Turnford Academy in his constituency, illustrating how private schools can support state schools financially and academically. He argued that adding VAT would harm these partnerships, leading to reduced financial and resource support for state schools.

Mr. Bell interjected to argue that Mr. Cocking's example actually supports the Government’s policy, suggesting that higher fees paid by private school attendees could fund additional support for state schools.

Mr. Murray responded to criticisms of the Bill, clarifying exemptions for higher education and English language teaching. He emphasised that the Government's policy aims to clarify and simplify taxation rules.

Mr. Hinds questioned whether private tutoring should be exempt from VAT, arguing it is similar to full-time education but taxed differently.

Ms. Olney interjected to point out that the Liberal Democrats had a fully costed programme in their 2024 election manifesto which did not include VAT on school fees.

Ms. Wilson provided no direct contribution but signalled opposition through her intervention.

Mr. Evans questioned whether the Treasury had considered additional accounting burdens for schools under the new regulations.

Mr. Stuart inquired about the tax implications of educational establishments providing modular elements that could be chosen independently by pupils.

Mr. Mullan interjected to argue against the Minister’s framing, stating there is no basis for saying children in the state sector have less due to VAT exemption for private schools.

The amendments will raise £310 million per year by 2029-30, which will be used to support the Government’s first steps and other priorities. They aim to improve the comparative advantage for UK-resident home movers and first-time buyers while ensuring that no additional barriers are faced by those coming to the UK and buying their first or only home.

The change to stamp duty is likely to affect first-time buyers negatively because they are now being brought into paying stamp duty, making it harder for them to realise their aspiration of getting into the housing market.

The decision to raise stamp duty is vital for tackling the plague of second homes that we have seen in communities such as Cornwall, supporting home ownership by ensuring a greater advantage over second home buyers.

The Minister should declare her interest because she is herself a landlord. Casting aspersions on people who own additional properties is unfair and may negatively impact those who have no option but to rent due to inflated property values.

Mr. Wild argues that new clauses would require the Chancellor to publish assessments of the impact of increased stamp duty rates on the private rental sector and overall housing market within six months of the Bill passing into law. He cites expert warnings that the measures could increase rents, reduce supply of rental properties, and negatively affect labour mobility.

Mr. Law interjected to agree with Mr. Wild that reducing the prevalence of second homes is crucial for ensuring people can afford to live and work in their communities.

Mr. Evans interjected, pointing out that the measures could stifle first-time buyers due to higher tax payments when buying houses, thereby causing a conflict with the Government's aim of increasing property availability for purchase.

Mr. Malthouse interjected to highlight the potential for properties in London to be owned by foreign corporations domiciled in tax havens due to penal taxation, thereby avoiding stamp duty.

Mr. Fenton-Glynn interjected, noting the increase in housing waiting lists since 2019 and challenging Mr. Wild to review the impact of previous government actions.

Mr. Snell interjected, asking for data on properties with paddocks that could be claimed to have mixed-use tenure to avoid higher stamp duty rates.

The amendment will help address the issue of second homes in Cornwall, where a significant portion of houses are second homes. The speaker welcomes this measure to tackle disruptive properties.

The Lib Dems argue that raising stamp duty is not the best way to address the root problem of second homes disrupting local communities. They propose giving local authorities more power to regulate short-term lets and impose higher council tax on overseas residents.

The speaker supports the Government's measures, stating that they will support home ownership among first-time buyers. She also emphasises that the information on impacts is publicly available.