HC Deb 22 June 2000 vol 352 cc439-40
3. Mr. Christopher Chope (Christchurch)

What the annual net cost or benefit to the Exchequer is of the charitable status of independent schools. [125826]

The Chief Secretary to the Treasury (Mr. Andrew Smith)

There are no official statistics, but the Government are working in partnership with the sector, as the hon. Gentleman knows.

Mr. Chope

I thank the Minister for that reply. Can he confirm that independent schools provide excellent value for money to the Exchequer and the taxpayer? They save the Exchequer having to fund some 600,000 school places out of taxation. For every pound received in charitable relief, the sum of £2 is spent on community benefit. Some £180 million is received in foreign earnings each year.

Why are the Government obsessed with making remarks detrimental to the success of independent schools and universities? Why do they not concentrate instead of trying to improve standards in state schools? Why does the Minister think that the number of pupils educated in independent schools has risen during the lifetime of this Government, rather than declined?

Mr. Smith

The Government do recognise the distinctive strengths and contributions of the sector, which is why we are working in partnership with it. We believe that there are clear educational and social benefits from that collaboration. That is why we have set up our partnerships fund scheme, which this year will benefit 6,000 pupils from both state and independent schools on collaborative projects—part of a £400,000 fund that is available this year. So I dispute the hon. Gentleman's assertion, and repeat that we are committed to working in partnership, drawing on the strengths of both sectors.

Mr. David Taylor (North-West Leicestershire)

In the lottery of British life, far too many of the big prizes go to the 7 per cent. of people who are educated privately. Does my right hon. Friend agree that the social costs associated with this far outweigh the small sums referred to by the hon. Member for Christchurch (Mr. Chope)? Does my right hon. Friend agree with the former deputy leader of the party, and myself, in that we can never be a mature and progressive country while the levers of power of our nation are so often exercised by people who have been educated in public schools?

Mr. Smith

The important thing is that this Government and our party stand for opportunity for all, regardless of their background or, for that matter, the school that they go to. However, it cannot be acceptable when, for example, 67 per cent. of those achieving the top grades at A-level come from state schools, but achieve only 52 per cent. of the places at the top universities. That is what our campaign for opportunity for all is about: ensuring that everybody, regardless of background or education, has the opportunity to make the most of his or her potential.

Mr. Howard Flight (Arundel and South Downs)

As the Minister will be aware, all educational institutions, as well as charities, suffer considerable tax costs as a result of irrecoverable VAT as well as the £500 million lost on ACT recovery. What plans have the Government for reforming the arbitrary and unjust VAT imposition on charities as well as for compensating for the ACT cost? Those are the two key issues about which charities, and in particular educational charities, are concerned.

Mr. Smith

I note that during the 18 years they had the chance to do something about that, the Conservatives did nothing at all. When we talk about the independent sector we are not just talking about conventional public schools; we are talking about the state schools, the choir schools and the ballet schools, as well as those educating children with special needs and those serving ethnic and religious groups. Those with charitable status are, of course, benefiting from all the measures that the present Government have taken to promote charitable giving, and that my right hon. Friend the Chancellor has just set out.