Government Forced to do a U-Turn on Proposals for 'Tax on Prudence'

4.02.20pm GMT Tue 30th Oct 2007

Last week Tom Brake MP for Carshalton and Wallington, joined his colleague David Laws MP, Liberal Democrat Shadow Secretary of State for Children, Schools and Families, in slamming Government plans to impose a 5% "tax" on school cash balances - a "tax on prudence". Over 20,000 schools would have been hit by the proposed change, which would have even affected money already committed to major building projects.

The Government consultation period on this change ended on Friday, 26th October.

In response to pressure from the Liberal Democrats the Government have been forced to do a U-turn and drop proposals to claw back surpluses, a move welcomed by Tom Brake MP who said,

"Thankfully the Government have seen sense and dropped this poorly thought through proposal"

David Laws MP added;

"This daft idea should never have seen the light of day. Headteachers and governors across the country were outraged about how the claw back was set to have a devastating impact on their school budgets and could even have led to staffing cuts.

Ministers must now come clean and accept that these proposals were wrong, and assure schools that they will not seek to resurrect them in a year's time when the row has died down.

The fact that such absurd proposals were put forward in the first place highlights a wider problem with the way this Government works. Do ministers seriously believe that they know better than 23,000 headteachers and governing bodies how to spend the money given to them?"

Tom Brake will join Mr Laws in an effort to confirm that there will be no resurrection of these plans.