Written questions by Cartlidge.

Whether the children of US military families based in the UK are exempt from paying VAT on independent school fees.

Since 1 January 2025, all education services and vocational training provided by private schools in the UK for a charge have been subject to VAT at the standard rate of 20 per cent. Entitled individuals in US Forces have always been able to benefit from the VAT free purchase scheme, providing relief on goods and services in the UK. Private school fees fall into the category of services for these purposes. The Government greatly values the contribution of our serving military personnel. The Ministry of Defence has increased the funding allocated to the Continuity of Education Allowance (CEA) to account for the impact of any private school fee increases on the proportion of fees covered by the CEA in line with how the allowance normally operates.

Whether the children of EU nationals serving in the armed forces in the UK are exempt from VAT on school fees.

Since 1 January 2025, all education services and vocational training provided by private schools in the UK for a charge have been subject to VAT at the standard rate of 20 per cent. There is not an exemption for the children of EU nationals serving in the armed forces in the UK. The Government greatly values the contribution of our serving military personnel. The Ministry of Defence has increased the funding allocated to the Continuity of Education Allowance (CEA) to account for the impact of any private school fee increases on the proportion of fees covered by the CEA in line with how the allowance normally operates.

Pursuant to the Answer of 14 January 2024 to Question 22961 on Defence: Expenditure, whether the future fiscal event will take place before June 2025.

Government set out in Autumn Budget 2024 that it will set a path to spending 2.5% of GDP at a future fiscal event. The government does not comment on speculation about decisions outside of fiscal events.

What assessment she has made of the potential impact of recent trends in borrowing costs on the Government's capacity to increase defence spending to 2.5% of GDP expenditure.

This government is fully committed to economic stability and sound public finances. That is why the Chancellor has made clear that meeting the fiscal rules is non-negotiable. Economic stability is one of the foundations that underpins the Prime Minister's Plan for Change, and the government has restored it with tough decisions, strict spending rules and robust institutions. The Spending Review will rewire government spending, to deliver the Plan for Change priorities, focusing on driving growth and reforming public services, whilst living within the spending envelope that has been set out. The first duty of government is to keep the country safe and protect our citizens. Under this government the Ministry of Defence’s budget is increasing by £2.9 billion from 2024-25 to 2025-26. It means the Defence budget will grow in line with the economy in 2025-26, ensuring the UK comfortably exceeds the NATO target of 2% of GDP. As the Chancellor set out at Budget, we will set a path to spending 2.5% of GDP on defence at a future fiscal event.

With reference to paragraph 5.52 of the Autumn Budget 2024, published on 30 October, what assessment she has made of the potential impact of changes to inheritance tax on Death in Service awards for surviving spouses of military personnel.

Most unused pension funds and death benefits will be included within the value of a person’s estate for inheritance tax purposes from 6 April 2027.Transfers to spouses and civil partners are exempt from inheritance tax. This means death benefits paid to spouses or civil partners are unaffected.

Whether she plans to review Public Works Loan Board rates offered to councils.

The PWLB lending facility exists to provide cost effective loans to local authorities to support investments and service delivery. HMT keeps all PWLB rates under review, including the discounted rate for investment in social housing which we extended in Autumn Budget to the end of 2025-26 to give LAs certainty with their capital plans for the year ahead.

With reference to the Autumn Budget 2024, published on 30 October 2024, HC 295, what estimate her Department has made of the cost of the increase to employer's national insurance contributions on the Ministry of Defence.

The Government will be supporting departments with the cost of additional employer national insurance contributions. This is in line with the Government’s usual approach to supporting the public sector, as was the case with the previous government’s Health and Social Care Levy. The allocation for the Ministry of Defence, along with all other departments, will be set out in due course.

With reference to her Department's policy paper entitled Fixing the foundations: public spending audit 2024-25, updated on 2 August 2024, whether the results of the Spending Review will be announced at a future fiscal event.

The results of ‘Phase 1’ of the Spending Review, announced in July, were laid with the Autumn Budget on 30 October. 'Phase 1’ covers the financial years 2024-25 and 2025-26. The Budget fixed the envelope for ‘Phase 2’ of the Spending Review, which will conclude in late spring 2025.

With reference to the Oral Statement of 22 October 2024 on Ukraine, Official Report, columns 183-4, whether she has had discussions with her Ukrainian counterpart on the proportion of the £2.26 billion loan to Ukraine that will be spent on the UK defence industry.

With regard to the UK’s disbursement of its £2.26bn contribution to the Extraordinary Revenue Acceleration scheme, the loan agreement and full terms remain in discussion and no decision has yet been made on what Ukraine will buy using this money. The UK intends to begin disbursing this money from early next year.

Whether the £2.26bn loan for Ukraine will be included in the GDP figure for defence expenditure.

The UK’s contribution to the ERA will be provided to the Government of Ukraine as a loan from the UK Government, for them to spend on military procurement. Because it is not direct UK defence spending, HMG’s assessment is the £2.26bn ERA loan will therefore not count as NATO qualifying UK defence spending.It will be in addition to current NATO qualifying UK defence spending.

If she will hold discussions with the Financial Conduct Authority on trends in the level of insurance premium increases for people involved in a motor insurance claim.

Treasury Ministers and officials have regular meetings with a wide variety of organisations in the public and private sectors on an ongoing basis. The Government is determined that insurers should treat all customers fairly and insurance companies are required to do so under the Financial Conduct Authority’s (FCA) rules. The FCA is an independent body responsible for regulating and supervising the financial services industry across the United Kingdom and has robust powers to act against firms that fail to comply with its rules. The FCA monitors firms to make sure they provide products that are fair value, and, where necessary, it will take action.

Whether she has had recent discussions with the Financial Conduct Authority on the regulation of the car insurance sector.

Treasury Ministers and officials have regular meetings with a wide variety of organisations in the public and private sectors on an ongoing basis. The Government is determined that insurers should treat all customers fairly and insurance companies are required to do so under the Financial Conduct Authority’s (FCA) rules. The FCA is an independent body responsible for regulating and supervising the financial services industry across the United Kingdom and has robust powers to act against firms that fail to comply with its rules. The FCA monitors firms to make sure they provide products that are fair value, and, where necessary, it will take action.