Charles Walker calls for an end to VAT on building work in the further education sector to bring it into line with secondary schools.

Mr. Charles Walker (Broxbourne) (Con): Hertford regional college in my constituency is undertaking a major new build programme to create a campus in Turnford fit for the 21st century. However, it will have to pay a VAT bill of more than £3 million for that building work. When secondary schools do new build work, they are not subject to VAT. Will the Secretary of State make representations to the Chancellor on behalf of the further education sector to see whether we can end that inequality?

Mr. Denham: Bearing in mind that 10 years ago there was no capital budget for further education colleges at all, I am fortunate to be presiding over a budget of £2.3 billion for FE colleges over the next three years. It is a bit of a cheek to complain about the VAT rules that applied under the previous Conservative Government.

Mr. Walker: It is a genuine question that deserves an answer.

Mr. Denham: But it is worth making the point that the difference between schools and colleges is that colleges are incorporated as independent institutions, which gives them a different tax treatment. I have not yet met a principal of an FE college who wished to return to local authority control, even if they would be able to reduce their VAT bill as a result.

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