Non-Domestic Rating (Multipliers and Private Schools) Bill)
Baroness Barran ExcerptsWednesday 26th March 2025
(2 days, 16 hours ago)
Lords ChamberRead Full debate Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 View all Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 86-I Marshalled list for Consideration of Commons Reasons - (26 Mar 2025)
Baroness Barran
At end insert “, and do propose the following amendments to the words so restored to the Bill—
“(2C) A statutory instrument containing regulations under sub-paragraph (2A) may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.””
Baroness Barran (Con)
My Lords, my Amendments 15B to 15E would allow the Secretary of State to reverse this policy in future.
The Bill introduces two things with which we fundamentally disagree: a tax on education and a two-tier charity system. Both are political choices made by this Government and both are, we believe, mistakes. I cannot see why the power for the Secretary of State to reverse this decision would be rejected. It does not require the Secretary of State to do anything but offers the flexibility and ability to change, if this policy—coupled with the introduction of VAT on independent school fees and the increase in employer national insurance—has wide-reaching and damaging impacts, not just on independent schools but on their neighbouring state-funded schools. That is particularly the case in areas of tight capacity, where there are not spare places for children to go if their independent school closes as a result.
The Government talk about wanting to remove barriers to opportunity. I hope that every single Government always want to remove barriers to opportunity, but there is a risk that this policy does the reverse and that there will be a lag before we see its impact, as parents strain every sinew to try to continue to send their child to the school of their choice.
Lord Khan of Burnley (Lab)
Noble Lords will not be surprised to hear that I disagree with the noble Lord. We are putting the Bill through because we, as the Government, want to deliver on our commitments and break down barriers to opportunity for all. Ninety-three per cent of students are in the state sector. The measures are necessary, tough decisions. We know they are tough choices, but they are necessary to make sure that we can support the state sector, where 93% of students attend.
Baroness Barran (Con)
My Lords, I listened carefully to the Minister and I think he did not satisfactorily address the points made by my noble friends Lord Caine and Lord Moynihan, and the noble Baroness, Lady Grey-Thompson, which addressed, in different ways, how independent schools form part of the fabric of our society. Nor did he really address the points of principle raised by my noble friends Lord Mackinlay and Lord Lexden, the noble Baroness, Lady Pinnock, and the noble Lord, Lord Thurlow. He understandably repeats the point about tough decisions and tough choices, but these amendments do not force the Government to do anything: all they do is allow the Government to change their mind gracefully if they find that their policy actions do not raise the funding that they had hoped. With that, I would like to test the opinion of the House.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Baroness Barran ExcerptsMonday 24th March 2025
(4 days, 16 hours ago)
Lords ChamberRead Full debate Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 View all Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 83-I Marshalled list for Third Reading - (21 Mar 2025)
Baroness Barran
Baroness Barran (Con)
My Lords, I rise to speak to my three amendments for this Third Reading. My amendments are simple and seek to remove any reference to private schools following the removal of Clause 5. I hope very much that the Government will accept these amendments to ensure that we send a clean copy of the Bill to the other place.
I am pleased that the two important principles we debated during the passage of the Bill were upheld by the House on Report: first, that the tax on education should be removed from the Bill; and, secondly, that we should not introduce a two-tier system for charities. I was glad to have the support of noble Lords across the House to remove Clause 5, and give particular thanks to the noble Lord, Lord Storey, who co-signed that amendment.
This clause on its own will raise only £70 million for the Exchequer, but its impact cannot be ignored. It comes at a time when the Government have already hit independent schools with additional costs through their decision to introduce VAT on school fees in the middle of a school year and the increase in employer national insurance contributions. This suggested change would exclude independent schools from charitable business rates relief. Although it would raise minimal amounts for the Treasury, it would damage schools disproportionately.
As previously discussed, the Bill would create a two-tier charity system, allowing the Government to treat charities differently and bringing politics into charity law. Our charities and charitable schools should not be subject to this, and I am very glad that noble Lords from across the House agreed. I beg to move.
Baroness Barran
Baroness Barran
Lord Khan of Burnley (Lab)
Through this Bill, the Government are delivering on the pledges set out in their manifesto. I thank all noble Lords who have dedicated so much of their time to scrutinising the Bill and have been diligently working with the Government to ensure that their desired outcomes align with the Government’s intentions. This has kick-started a long-overdue transformation of the business rate system, so that it can be fairer, protect the high street and support investment, and that it is a system fit for the 21st century.
On top of this, the Government seek to secure additional funding to help deliver on commitments to education and young people by concentrating on the broader picture of the state sector, where most children are educated. While there have been amendments made to the Bill for the Commons to consider, the Government do not accept them. The Bill, as it entered the House, would deliver on the Government’s missions to rebuild Britain. The amended state of the Bill does not go far enough in the ambition to kick-start economic growth and eliminate barriers to opportunity.
I extend particular thanks to the noble Baronesses, Lady Scott of Bybrook, Lady Barran and Lady Pinnock, the noble Lords, Lord Jamieson, Lord Thurlow, Lord Fox, Lord Moynihan, Lord Lexden, Lord Storey and Lord Shipley, and the noble Earl, Lord Lytton, for their considered approach to the Bill. I am grateful for the conversations we have had throughout the Bill’s time in this House. Their passion and expertise have been invaluable. Our discussions about the issues have been reflective of the strong feelings shared by many across the country. I thank noble Lords for their advocacy and participation. I also extend my gratitude to the Bill team—Zoe Hawthorne, Nick Cooper and Chloe Horn—for their technical expertise and handling of the Bill. In particular, I am grateful to my private office and my private secretary, Daisy Brittle. I beg to move.
Baroness Barran (Con)
My Lords, in concluding this Bill, I first thank my noble friends who have supported me, in particular, my noble friends Lady Scott of Bybrook and Lord Jamieson, in our work to protect high streets and independent schools. I also thank noble Lords from across the House, who have spoken in support of the many sectors that risk being negatively impacted by the Bill. In particular, I thank the noble Lord, Lord Fox, and the noble Baroness, Lady Pinnock, for their work on helping businesses up and down the high street. I thank the noble Lord, Lord Storey, for his support in protecting independent schools, and the noble Lord, Lord Thurlow, for his amendment that calls for the reform to the business rate system that the Government have failed to deliver through the Bill. I thank the Minister for the very constructive and positive way that he has engaged throughout the passage of the Bill.
On these Benches, we are pleased that a number of issues, on which the House has been united, have allowed us to encourage the Government to make changes to the Bill. Anchor stores, manufacturing businesses and healthcare hereditaments will likely face increased business rates through these proposed changes, especially with regard to the higher multiplier. I hope the other place will consider the sensible amendments that retain the current standard multiplier for these crucial sectors.
The amendment in the name of my noble friend Lord Jamieson is key in exploring the impact of the threshold of the higher multiplier. Its cliff-edge nature is particularly concerning, and despite the Government’s insistence that they want to focus on growth, this threshold will impact the decisions many businesses will take, and not in the direction that the Government seek.
The noble Lord, Lord Thurlow, is right to call on the Government to consider when they will pursue a reform of the business rate system, in line with their manifesto commitment, to ensure that online giants pay their fair share of business rates. As the Government have not delivered such reform, they should indeed commit to publishing a review of when they will do so.
As I said in relation to my amendments, I was pleased to see Clause 5 removed, given that it addresses directly the principle of taxing education and having a two-tier charity system. We on these Benches look forward very much to seeing the response in the other place to these very reasonable issues.
Baroness Pinnock (LD)
My Lords, I start by thanking the Minister and his civil servants in the Bill team for the very helpful discussions to aid detailed understanding of the Bill. The one issue that still irks me is that it was debated without an impact assessment. The convention now seems to be that this is the case, but I find it unacceptable that we have debated and agreed a Bill of this nature and with the implications that it has on many businesses. I believe it is unacceptable to do so without an impact assessment.
However, we on these Benches are delighted that the 290 hospitals which were destined to have the higher-rate multiplier applied will be excluded from that penalty. We hope that the other place will agree with the sanity of this proposal. The Minister said that the aim of the Bill was to protect the high street. It is not clear that that will be achieved by the Bill, and only time will tell, but I am sure the Minister will be pleased to know that I will be keeping a watchful brief on this issue and questioning him at regular intervals if the high street is not benefiting from these elements of the Bill.
Given that, I thank my noble friend Lord Fox, who did much of the work on the implications for business, and the ever knowledgeable and wise Elizabeth Plummer in our Whips’ Office, who was able to give me sound advice on the course of the Bill. With that, I thank the Minister and look forward to the consequences of the Bill.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Baroness Barran ExcerptsTuesday 18th March 2025
(1 week, 3 days ago)
Lords ChamberRead Full debate Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 View all Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts Amendment Paper: HL Bill 61-R-I Marshalled list for Report - (14 Mar 2025)
Lord Weir of Ballyholme (DUP)
My Lords, I shall speak briefly on these amendments. The best way forward is probably Amendment 30 in the next group, which is a cleaner way of dealing with this. I would sit a little uncomfortably with the idea of placing additional financial burdens on schools, although I understand the rationale that the Government have put forward for these changes.
The concern is that any analysis that has been done, particularly from the financial point of view, might suggest that this is perhaps a more minor element of the changes that are proposed as regards independent schools. However, there is a grave concern that the cumulative effect of this change, along with the national insurance and particularly the VAT contributions, is likely to lead to the closure of a number of schools. This is not unprecedented; I have seen it happen through various changes in other parts of the United Kingdom. As such, while this is perhaps the smallest element of those three changes, it could potentially become the tipping point for a range of schools.
Let us deal specifically with the two main amendments in this group: Amendment 25, from the noble Lord, Lord Lexden, and the amendment on sport in the name of the noble Lord, Lord Moynihan. There has been an explosion in the number of young people diagnosed with special educational needs throughout the United Kingdom, and there is much greater pressure, sometimes for very virtuous reasons. For example, we see that some children with particular physical disabilities, who many years ago would, sadly, have had a very low life expectancy, are now able to live into adulthood and, indeed, live a full life. That is something for us all to celebrate. However, there has been a massive increase in the number of children with special educational needs.
For many years, my part of the United Kingdom, Northern Ireland, has tended to have much higher levels of special educational needs, and there may be an argument that other parts of the country are almost playing catch-up with Northern Ireland. But I can give your Lordships an indication that we should not be naive and believe that we will reach a plateau as regards those with needs that have to be catered for. Even in Northern Ireland over the last five, 10 or 15 years, those numbers have gone up and up, and there is no doubt that that situation will be replicated in the different parts of the United Kingdom.
With this comes increasing pressure to find appropriate educational settings for those many children. Again, judging from my experience, within the state sector that creates increasing pressures, where schools that perhaps have not been doing so before are having to provide specialist classes. The local authorities—in Northern Ireland’s case, the Education Authority—are having to scramble around to try to find where they can provide additional facilities.
In the Northern Ireland context, there is not a sizeable independent sector, but particularly in England the independent sector plays an important role in providing a level of specialist support for many of those children with special educational needs. It provides a certain level of safety valve in reducing the pressure within the system. I doubt this is the Government’s intention, but if we inadvertently create a situation where a number of these schools are forced to close, that will ratchet up further pressure within the state system at a time when we are already facing a tsunami of pressures, as has been identified by a number of noble Lords. The VAT exemption put forward by the noble Lord, Lord Lexdenm seems to be a sensible way forward, because the placing of that additional burden, which will almost inevitably lead to further closures, will be counterproductive to our young people as regards special educational needs.
Similarly, although the case is perhaps a little less acute as regards sport, accusations can be made of Governments of different political persuasions, over many years and decades, who have not been able to provide the level of sporting facilities in this country that our young people merit. We all glory in the great sporting triumphs of this nation, but, quite often, such triumphs have occurred in spite of the facilities in place rather than because of them.
Going back many years to Prime Minister John Major, he spoke of the need to open up fields and sporting facilities, but there was not the level of success that we should perhaps have seen. It strikes me that, if we do not have some level of exemption for our sports fields when it comes to rating purposes, we are simply accelerating the process by which many of those facilities will become no longer viable.
When schools find themselves in financial difficulty, it is about seeing what assets they have and what they can get rid of. Sport, unfortunately, is quite often seen as an extra and as an easy thing to cut, but that has a detrimental impact. What particularly persuades me towards the amendment from the noble Lord, Lord Moynihan, is that it ties this in with community use. These facilities should not be castles shining on the hill, to which no one can gain admission. The partnership that should always be there between schools and the community must be at the heart of what we seek to do, no more so than in the issue of sport.
As such, whatever the Government’s intentions in relation to these changes, without some level of amendment, either through this group or the group beginning with Amendment 30, we will be taking a retrograde step, for both sports and special educational needs.
Baroness Barran (Con)
My Lords, I will speak to my Amendments 26 and 28 in this group. I also support Amendment 25. in the names of my noble friends Lord Lexden and Lord Black of Brentwood, and Amendments 27 and 29, in the name of my noble friend Lord Moynihan.
Amendment 26, in my name and that of my noble friend Lord Black, raises again the issue of schools that are wholly or mainly concerned with providing full-time education for gifted arts students, such as those who are part of the Government’s Music and Dance Scheme. My noble friend rightly pointed out the importance of this group of students for our economic growth. They are students who attend an independent school based solely on their natural talents, and whose parents, where they are on a lower income, are means tested.
This was debated at length in relation to the imposition of VAT on these schools. The Government need to show, first, that they understand the issues that face such schools and their pupils, and, secondly, that they want to preserve these globally respected and admired institutions, without which our country would be much the poorer.
In his letter to me, for which I thank him, the Minister pointed out that there will be no impact from the increase of VAT on the fees paid by parents. To be clear, my understanding is that that is just for this academic year; if I have misunderstood, perhaps the Minister could clarify when he comes to speak.
I believe that my point still stands: the parents of gifted children whose income is means tested will pay more in future for their children’s education because of the VAT changes beyond this academic year and because of the changes proposed in the Bill. That risks excluding some of our most gifted children from the education that they need to realise their potential.
Baroness Barran
Baroness Barran (Con)
My Lords, I rise to speak to Amendment 30 in my name and that of the noble Lord, Lord Storey; I also support Amendment 31 in the names of my noble friends Lord Black of Brentwood and Lord Lexden, which seeks to include a review on the effect that this Bill will have across the education sector.
I think it is safe to say that both the noble Lord, Lord Storey, and I do not believe that the long-standing tradition that education should be free from taxation should be broken. Clearly, the Government do not agree with us, and we have seen this with the egregious introduction of VAT on independent school fees and now with the proposed change in this Bill to the exemption from business rates relief for independent schools with charitable status, not to mention the impact of the proposed employer national insurance contribution increases.
As the Minister knows, the majority of independent schools are small and run on tight margins. As he will remember from my speech in Committee, I believe it is a poor precedent for the Government to set to create a two-tier charity system and there has been no answer from the Government about this principle that all charities should be treated equally. This feels like a rather political move and charities, of all organisations, should be free from such moves.
I assume that the noble Lord is going to argue that there has been no sign that pupil numbers are dropping significantly following the introduction of VAT in January and that this Bill will similarly have a limited impact. But I say to the Minister that, first, the point that the principle that education should never be taxed still stands and, secondly, I do not think anyone really expected the impact on independent schools from the imposition of VAT would happen so quickly.
I am sure the noble Lord has received letters from parents, just as I have. They will go to great lengths to avoid disrupting their children’s education and I would be surprised if we see much change before the start of the new school year, and then from a reduced uptake in year 7. Indeed, the latest data from the Independent Schools Council shows a drop of 4.6% in applicants in year 7 and 3.9% in reception—and that was before the imposition of VAT.
I look forward to hearing the insights from other noble Lords and to hearing the Minister’s response, but at this point I am minded to test the opinion of the House.
Lord Black of Brentwood (Con)
My Lords, I will speak to Amendment 31 in my name. I am grateful, as always, to my noble friend Lord Lexden for his support. I also strongly support Amendment 30 from my noble friend Lady Barran. I refer noble Lords to my previous declaration of interests.
Let me explain why this amendment is important. Throughout all the debates on independent education that we have had in this House, as indeed they have had in the other place, the Government have shown themselves seemingly impervious to rational argument. Frankly, they have buried their head in the sand, wilfully refused properly to engage with the independent sector and ignored the strength of feeling in this House and the opinion of experts in the field.
The unpalatable truth that they will not acknowledge is that their policies, of which the measures in this Bill are one central strand, simply will not end up benefiting the state sector in any meaningful or visible way. The 6,500 teachers promised are likely to be a fantasy and will end up being just another broken promise. But the policies will end up profoundly impacting the independent sector and the lives of tens of thousands of pupils and their hard-working parents, and that will have far-reaching consequences not just for the schools themselves but in countless other areas.
Heartbreakingly, as we heard in the debate on the previous group, it will impact on the way in which our society cares for vulnerable children, those with special needs and disabilities, and their carers and families. It will impact on local communities that currently benefit from thriving and imaginative partnerships with state schools, on faith communities and on military families. It will impact on gifted children who benefit from bursaries, something that many independent schools are cruelly being forced now to review, and of course it will impact on jobs at independent schools, especially when closures of schools inevitably and tragically happen.
It is crucial that all this is rigorously scrutinised and that Parliament has an opportunity to examine the consequences of the policies contained in the Bill, taken alongside the other tax changes being made on VAT and on national insurance—a combination of measures that the Government’s impact assessment failed to do, as it related only to business rates. That is what we, particularly in this House, are here for: to scrutinise, examine and challenge. But we need a comprehensive assessment of the facts, undertaken by the Government themselves, to be able to do that, and that is what this amendment would deliver. The Independent Schools Council, which does such an exceptional job in championing the sector, and the other associations that form part of it will conduct their own analysis. Ultimately, however, it is the Government who are responsible for the delivery of public policy in these areas and who must be held accountable by Parliament and the electorate.
The Government say that their measures, including those in Clause 5, will raise a certain amount of money to be invested in state education. I doubt it will raise anything like that, but let us see. They say they will be able to recruit additional teachers. I very much doubt it, but let us see. They say there will be no consequences for children with special needs and those in faith schools—let us see. If they are really confident that their policies can deliver what they say without damaging consequences elsewhere, why would they not want to have a review of them to prove the point? What are they fearful of?
Perhaps it is just possible that they might be wrong and will end up undermining and weakening the independent sector, which is the envy of the world, without delivering for the state sector—which means, of course, that they would have to think again. We need answers to that. That is why I believe they must commit to a thorough review of their policies, then Parliament, including our House, can scrutinise it, debate it and make recommendations for change.
The Earl of Lytton (CB)
My Lords, I had not originally intended to intervene on this amendment, but I cannot help but see a wider point of principle that is involved with Clause 5 of the Bill.
I should explain that rating law serves to exempt premises used by charities and occupied for their charitable purposes, with 80% mandatory relief and 20% discretionary relief given by the billing authority. There is also some discretion for billing authorities to give similar treatment to local not for profit or community enterprises. I hope I have got that right.
What disturbs me is that, clearly, the Government think that some charities are more deserving than others. This throws up a wider issue of an arguably discriminatory policy on which a wider debate across the country is warranted. What might be more or less meritorious when considering organisations concerned with human disease, animals, wildlife or conservation, building preservation and so on? But education is the very basis of what we leave and pass on to future generations in knowledge, citizenship and values. I fail to comprehend what this clause in the Bill is, and that is why I feel compelled to support these two amendments. If we do not secure its complete removal, we should certainly have the review advocated by the noble Lord, Lord Black.
I will illustrate some of the consequences of this. I recently visited my old school as part of the Learn with the Lords programme. I ascertained that this Bill, along with other measures introduced by the Government, will cost it an additional £1 million per year and that this is likely to be reflected principally in staff reductions. I happen to know that this school has a very firm commitment to its staff, as it does to its pupils.
So Clause 5 is more than unfortunate; it is retrograde and, I feel, discriminatory. The Government ought to think again about the purpose and formulation of this particular clause of the Bill.
Baroness Barran (Con)
My Lords, the Minister has heard three very strong arguments from across the House. The first is that the principle of not taxing education should be respected and upheld. Secondly, there is the principle that charities should not be subject to any kind of political overreach. Thirdly, the Government should not introduce a two-tier system, punishing charities that do not conform to their views. I think we have heard across the House that this sets a very unfortunate precedent.
Finally, there is the point that this policy will not deliver but rather will impact children, particularly vulnerable children, who attend some of the small schools that serve them and their communities all around the country. I would like to test the opinion of the House.
Lord Khan of Burnley (Lab)
My Lords, we have a right of reply.
Amendment 30 would remove Clause 5 from the Bill, and therefore the measure that removes the eligibility for charitable rate relief from private schools that are charities. Amendment 31 would require the Government to undertake an assessment of the expected and observed impact of Clause 5. Furthermore, that amendment seeks to ensure that any assessment has regard to impacts owing to any other tax change that have affected private schools since 1 January 2025, effectively seeking to create an all-encompassing review of the Budget tax changes and their effect on private schools, and the resulting impact on the state sector. I am unable to accept these amendments.
This Government committed in their manifesto to raise school standards for every child, to break down barriers to opportunity and to ensure that every child has the best start in life, no matter where they come from or their financial background. As part of that, the Government committed to removing the VAT and business rates charitable relief tax breaks for private schools, to help to raise revenue to help to deliver on their commitments to education and young people.
The Government carefully considered their approach in designing the policy to remove charitable rate relief from private schools. On 29 July, they published a technical note on removing the VAT and business rates charitable relief tax breaks for private schools. The Government received over 17,000 responses to this note, from a range of tax specialists, private schools, bodies that represent private schools and others. A detailed government response to this was published at the Autumn Budget. Furthermore, at the introduction of this Bill, the Government published a note setting out analysis of the impact of the business rates measure. This is available on the Bill page. A tax information and impact note was published in relation to the VAT change at the Budget and is available on GOV.UK.
The removal of business rates charitable relief from private schools that are charities will apply to all charitable private schools, with the exception of where a private school is wholly or mainly concerned with providing full-time education to persons for whom an education, health and care plan is maintained. As I set out in a debate on an earlier group today, under the carve-out in the Bill, the Government believe that this will ensure that most private special schools will not be affected by the Bill measure.
At the Budget, the Government announced a real-terms increase in per pupil funding, with a £2.3 billion increase to the core schools budget for the financial year 2025-26, including an almost £1 billion uplift in high-needs funding. This funding increase needs to be paid for; to help to do that, the Government are ending tax breaks for private schools, including, as this Bill delivers, ending charitable rate relief for those private schools in England that are charities. Taken together with the policy to remove the VAT exemption, these measures will raise around £1.8 billion a year by 2029-30.
I know that there have been concerns with regards the impact on the state sector caused by this policy. The impact note that I mentioned set out that, in the long run—by 2030—the Government estimate an increase of 2,900 pupils in the state sector. Based on average 2024-25 per pupil spending in England, the Government expect the revenue costs of pupils entering the state sector as a result of the business rates measure in England to steadily increase to a peak of around £20 million per annum, after several years. Overall, the expected revenue from the measure will substantially outweigh the additional cost pressures.
The Government have undertaken analysis of the policy and provided that publicly. Furthermore, they undertake a range of monitoring, data collection and publication of data as part of usual processes, and will continue to do so when the Bill measure comes into effect. For example, the Department for Education monitors place demand and capacity as a matter of course, and works closely with local authorities to meet any demand pressures to ensure that there are sufficient school places for children who need them. All children of compulsory school age are entitled to a state-funded school place.
Pupil numbers in schools fluctuate regularly for a number of reasons, and the school funding system in England is already set up to manage that. For individual schools, the Government therefore expect changes in pupil numbers caused by these changes to be managed in the usual way. Data on the number of school pupils is published every summer, providing information on the number of pupils at different types of schools, so anyone can see how pupil numbers in both state and private schools have changed.
Part of the assessment that the amendment would require seeks to understand any impact on partnership working between private and state schools, as well as the capacity of private schools to provide fee assistance. I understand that there is concern that private schools will reduce these activities. We understand from data published by the Independent Schools Council that a lot of private-state sector partnerships relate to the hosting of joint events or providing access to facilities used by private school pupils. In many of these partnerships, the activity undertaken benefits the pupils that attend private schools, so it would not be in the interest of the private schools to stop this activity either.
Baroness Barran (Con)
My Lords, I apologise to the House, and particularly to the Minister, for jumping the gun with my closing remarks.
It is fair to say that, of the three points that I raised —the principle of taxing education, the differential treatment of charities and the impact of the Bill— I did not hear the first two addressed directly, and on the third I think that the Minister and I have to agree to differ. With that, I am afraid that I have to tell the Minister that I still wish to test the opinion of the House.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Baroness Barran ExcerptsThursday 27th February 2025
(1 month ago)
Grand CommitteeRead Full debate Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 View all Non-Domestic Rating (Multipliers and Private Schools) Bill 2024-26 Debates Read Hansard Text Read Debate Ministerial Extracts Amendment Paper: HL Bill 61-II Second marshalled list for Grand Committee - (25 Feb 2025)
Lord Black of Brentwood (Con)
My Lords, I will speak briefly to Amendment 54A and the consequential amendments in the name of my noble friend Lord Lexden, to which I have added my name. I declare my interests as chairman of governors at Brentwood School and as president of the Boarding Schools’ Association and the Institute of Boarding. I have just two brief points to add to the comprehensive remarks that my noble friend delivered with his customary eloquence, with which I agree entirely.
First, why do we need a definition in the Bill, given that the 1988 Act, as far as I can tell, does not use the term or make any reference to schools, and talks generically only of charities? If the concern is to make a differentiation between independent schools and academies as state-funded and independent schools, it would surely be much simpler to make clear that the Bill does not apply to academies. The only conclusion you can reach is the one that my noble friend reached: the novel insertion of this definition is simply to shoehorn what I am afraid is party-political dogma into this legislation, and that makes for bad law.
That leads me to my second point. At some point this legislation may well end up in the courts, when the legal definition of independent school, which has been long established in law, as my noble friend said, may become very important. Therefore, there needs to be certainty about definition, which there will not be if independent education is dealt with in different ways in different pieces of legislation. What steps have been taken to ensure that this definition is not compromised or contradicted in some way in other legislation, which will at some point down the line cause real legal uncertainty?
Baroness Barran (Con)
My Lords, as the Committee and the Minister know by now, we on these Benches are opposed to the whole of Clause 5, and I will start my remarks by making the case that it should not stand part of the Bill; rather, we urge the Government to think again and remove it.
First, as we debated at Second Reading, there is the point of principle. On what basis should the Government identify a single group of charities, with no concerns about the delivery of their charitable objects, for separate treatment in relation to business rates from their charitable peers? Sadly, the only plausible reason is that it reflects some ideology that does not respect the right of parents to choose the education for their child. I am not suggesting that the Minister sees it in that way, and I accept that the Government’s plan to tax education for the first time ever in this country’s history were in their manifesto, but I cannot find another logical basis for this choice.
Secondly, this picture is confirmed when we look at the amount of money that will be raised from this change. The Government project that only £70 million will be raised. Finally, it leaves the risk that in future legislation in this area, this or a future Government will carve out another group of charities that they believe no longer justify the business rates relief. This feels a wrong-headed choice, and I very much hope that the Minister will encourage his colleagues to review it and remove the clause.
I turn to Amendments 55, 56, 59 and 62. Amendment 55 is consequential and necessary to enable the later amendments. I have tabled it to exempt specific independent schools from this measure. Amendments 56 and 59 are probing amendments to understand what is meant by the term “or other consideration” in the context of fees payable for the provision of full-time education. I would be grateful if the Minister could give the Committee an example of where another consideration has been used in practice wholly or partly to replace fees.
Amendment 62 highlights the position of smaller independent schools, many of which charge significantly less than the independent school average of £27,642, which was the figure the Minister in the other place gave as the mean annual day fee as of January 2024. I appreciate that the Government are unlikely to agree with the fee level in my amendment, but it would be helpful for the Committee to hear whether there is a fee level below which this legislation would not apply. As the Minister knows, some faith schools in particular charge lower fees than the state school equivalent per pupil funding rate. Would the Government consider exempting schools that charge less than the per pupil funding rate from this tax.
As we have heard, Amendments 54A, 55A, 59A, 69C, 69D, 77 and 78 in the names of my noble friends Lord Lexden and Lord Black of Brentwood would replace the use of “private school” with “independent school”. I agree with my noble friends’ analysis of the importance of this and some of the factors that sit behind it. The term “private school” is much more informal, and in legislation it is more commonplace to use “independent school”. We support those amendments fully; I hope the Minister will give careful consideration to them.
Baroness Pinnock (LD)
My Lords, Clause 5 is an interesting add-on to the legislation as a whole, which is focused on non-domestic rates as applied to business premises. Here, we suddenly have one sector of businesses being pulled out for special treatment, which is curious to me. It becomes a very strange Bill with Clause 5 added to it. However, for Liberal Democrats, as I have probably said many times in the course of my public sector career, education is the single most important and best investment that any Government can make in our children, their future and the country’s future. The clause is important to us because it relates to education.
The Government’s policy in this Bill, removing the current exemption for relief of business rates, combined with the introduction of VAT and the impact of employers’ national insurance increases, will undermine two important principles for Lib Dems. The first is that education should not be taxed. All education provided by an eligible body, including universities, music lessons and tutoring, is currently exempt from VAT, and VAT should not be imposed on these things—and, hence, neither should business rates. The exemption should not be removed from these schools. The second principle is that parents have a right to choose the education setting that they believe is the best for their children. We champion choice and believe nothing should get in the way of parents making those choices.
The best outcome of all would be that state-funded education was funded at the same level as that experienced by children in the private, or independent, sector. It is curious to me that the gamut of changes that the Government are making in relation to the costs imposed on the private, or independent, sector will not release sufficient funding to make a significant impact on children’s education in the state sector, so it is hard to understand what the Government are seeking to achieve.
It has been an interesting debate. Lots of points of definition have been raised, and I hope the Minister will be able to respond to the interesting points about the importance of having an accurate definition of the sector. I look forward to his response. But in summation: education is most important, and parents have the right to choose, as long as those choices do not have a negative impact on everybody else, which in this case they clearly do not.
Baroness Barran (Con)
Before he sits down, can the Minister respond to one point that I made? If he does not have an example today, perhaps he could write to me and share the letter with other Members of the Committee. Does he have a real-life example of where “other consideration” has regularly—or even occasionally—been used in practice to replace fees, either wholly or partly? I have visions of, I do not know, farmers arriving with trailers loaded with whatever it might be. If the Minister does not have an example now, perhaps he could let me know.
I also ask the Minister to confirm something. I take his point about the property value not necessarily being linked to the fees, but can he commit to considering, where a school charges less than the per pupil rate of state funding, whether this policy will still apply?
Lord Khan of Burnley (Lab)
My Lords, as the Committee will understand, it is difficult for me to talk about examples at this time, but I take the noble Baroness’s point. I would like to hear more about the examples that she has, in particular to see what examples we can discuss in depth when we meet post Committee. It is difficult to talk about non-domestic rating examples now.
Baroness Barran (Con)
To be honest, I do not have examples, but the Bill suggests that fees might be paid by means of “other consideration”. I would be grateful if the Minister could write to me about whether that has ever been used, either wholly, partly, regularly or occasionally.
Lord Khan of Burnley (Lab)
I am happy to write to the noble Baroness on those two points; I will also pick them up when we next meet.
Baroness Barran
Member's explanatory statement
This amendment seeks to probe whether institutions providing foundation courses would be considered private schools.
Baroness Barran (Con)
My Lords, in moving Amendment 57, I also speak to Amendments 58 and 68. Amendments 57 and 58 are linked and refer to the same part of the Bill. The second definition of an independent school refers to an institution that is
“wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age but under 19”,
which to me seems a definition that could be made clearer. My Amendment 57 is a probing amendment that seeks to understand whether an institution providing foundation courses required before university would be captured under this definition. It would, after all, be providing education suitable for those under the age of 19 but over compulsory schooling age. Indeed, there are further education colleges that provide such foundation courses and, if they were to be captured by this, it would be counterproductive. Of course, foundation courses tend to charge a fee but, despite that, they are not similar institutions to independent schools—or private schools, as I know the Minister would prefer us to refer to them. I would be concerned that, if they were included, it would have the potential to reduce access to universities for those from lower socioeconomic backgrounds. I hope that the Minister will be able to reassure me that this is not the case.
Amendment 58 refers specifically to the use of “wholly or mainly”, which the Minister referred to briefly in his earlier remarks. Can he clarify what this means in a numerical sense? My assumption is that it would be 50%, as it is for pupils with an education, health and care plan—the Minister is nodding encouragingly—but I would like to put the question to the Minister to confirm the criteria that the Government are planning to use. If it is different, what will it be and who would make that judgment? I wonder whether the Minister could give a couple of examples of institutions that might fall either side of the “mainly” line. If there are no examples to give today, perhaps he could write to me.
Amendment 68 seeks to protect private schools with a nursery attached from this change to the legislation. Early years providers are not included in the general definition of a private school, as the noble Lord just said in his remarks on the earlier group, but there exist a substantial number of nurseries attached to existing private schools. I hope that the Minister can see that it feels very illogical to exempt stand-alone independent nurseries from this tax but not those that are part of a wider school. Our amendment suggests exempting schools that have an in-house nursery altogether but, at a minimum, perhaps the Government would consider exempting that part of their property that relates to nursery provision. Have the Government considered this and, if not, will the Minister undertake to do so before the Bill returns on Report? Although the amount raised is small, this opens the door to the concept of taxing early years education specifically, which is a very concerning precedent to set, especially when it is a sector already suffering the potential costs of the employers’ national insurance increase. It feels counterproductive to do this at a time when the Government are clear in their commitment to encouraging early years education and giving children the best start in life. I look forward to the Minister’s response.
Lord Khan of Burnley (Lab)
My Lords, Amendments 57, 58 and 68 from the noble Baronesses, Lady Barran and Lady Scott of Bybrook, concern early years provision and private further education institutions. The definition of a private school in the Bill includes institutions that wholly or mainly provide education suitable to persons over compulsory school age but under 19, where such full-time education is wholly or mainly provided for a fee or consideration. This brings private sixth forms into the scope of the Bill measure but excludes general FE colleges. The Bill also includes a specific carve-out for independent training and learning providers. Due to the mechanisms whereby the Government provide funding to these institutions, it was necessary to provide a carve-out in the legislation to ensure that these institutions did not inadvertently come into the scope of the measure.
The Government’s view is that all schools that offer full-time education to children of compulsory school age and/or to 16 to 19 year-olds for a charge should be within scope of the Bill measure. This is to ensure consistency and fairness in the Government’s treatment of private schools. The Bill measure includes stand-alone private sixth forms as well as those private sixth forms that operate as part of private schools that also cater for children of compulsory school age. Amendment 57 would remove entirely this part of the private school definition, the resulting impact of which would be that all private sixth forms would be out of scope and therefore retain charitable rate relief.
The noble Baroness indicated that through this amendment she is seeking to understand whether institutions providing foundation courses would be considered private schools. Foundation courses are a level 5 qualification and as such are classed as higher education. Foundation courses are in the main provided by higher education institutions such as universities. Institutions that are focused on the delivery of higher education are not within the scope of the Bill, and where they are charities they will continue to receive charitable relief. However, any private sixth forms that provide a few higher education courses, such as foundation courses, will still lose their relief if they are wholly or mainly concerned with providing education suitable to the requirements of persons over compulsory school age but under 19 years old. Given that business rates are a tax on property, the Government believe that this is a sensible line to draw for when the relief is removed.
Amendment 58 would amend the Bill definition of a private school. It would remove the “wholly or mainly” requirement in relation to the concern with providing full-time education suitable to the requirements of persons over compulsory school age but under 19 years old for a fee or consideration in such institutions. In business rates, “wholly or mainly” generally means over 50%. Therefore, under the Bill definition, institutions that are more than 50% concerned with providing education suitable to the requirements of persons over compulsory school age but under 19 years old, and where more than 50% of such full-time education is provided for a fee or consideration, will be within scope of the measure and will no longer qualify for charitable relief.
The inclusion of the “wholly or mainly” test in the further education definition has been drafted in recognition that there may be some state-funded institutions where a small minority of pupils pay a fee for the courses they attend. The Government understand that these circumstances are rare but may include international students undertaking further education courses where they do not qualify for a state-funded place.
The noble Baroness, Lady Barran, asked for examples of institutions that may be around 50%. Regarding these schools, which mainly provide education suitable for those over compulsory school age but under 19 years old, it will be for local authorities to implement this test. I do not think it would be right for us to say whether a particular school passes that test, but we do not expect many of them to be at the margins.
Without including “wholly or mainly” in respect of new sub-paragraph (4)(b)(i), the Bill could inadvertently capture state-funded colleges of further education, which is not the intention of the Government’s policy. Similarly, it could risk capturing fee-paying institutions that predominantly provide higher education courses if one pupil who meets the broader further education definition is present. As set out, it is not the Government’s intention to capture higher education institutions within the Bill’s definition.
I should explain that the impact of this amendment would mean that the presence of one fee-paying pupil within the age bracket as per the current definition may result in the institution being brought into scope of the Bill, resulting in it losing charitable relief. In contradiction to Amendment 57, Amendment 58 would mean that more institutions would be in scope of the Bill and so would lose their rates relief. But I understand the purpose of the amendment, which is to understand better the meaning of the words “wholly or mainly”, and I hope I have been able to clarify that for noble Lords.
Amendment 68 seeks to carve out from the Bill private schools that also provide early years provision. For clarity, private nurseries that are on their own hereditament are not within scope of the Bill definition, and where they are charities they will retain charitable relief. The Government have decided that where private schools that provide for pupils of compulsory school age also have nursery classes within the school, the presence of nursery-age children should not remove the whole school from the business rates measure. This approach best ensures consistency with the underlying policy intent.
It is for individual private schools to decide how they wish to meet additional costs as a result of the business rates measure. The allocation of costs in private schools that also provide early years provision on the same hereditament is a matter for those private schools. It is worth mentioning that government early education and childcare entitlements can be used for childcare in any approved childcare provider; this includes private school nurseries, although the numbers undertaking early years entitlement in private school nurseries are relatively small. Similarly, private school nurseries are also eligible to receive tax-free childcare funding as long as they are registered with Ofsted or an equivalent regulatory body.
Accepting these amendments would remove many private schools from the Bill’s measure. This would reduce the amount of revenue that could be raised and, consequently, may reduce the funding available to the Government to deliver on their commitments to young people and the state-funded education sector, where over 90% of pupils in England are educated. The outcome of the tax changes on private schools will have a significant impact on the Exchequer, enabling the Government to fulfil their commitments on investing in state education and young people. Together with the policy to apply VAT to private school fees, these policies are expected to raise around £1.8 billion a year by 2029-30.
I hope that this provides further clarification on the drafting of the definition, as well as on the Government’s position regarding the inclusion of private further education and private schools that also cater for nursery-age children alongside compulsory school-age children. For the reasons set out, I respectfully ask the noble Baroness, Lady Barran, to withdraw her amendment.
Baroness Barran (Con)
I thank the Minister for his remarks and for addressing the points I made in relation to each of these amendments, in particular Amendment 58. I heard the Minister say that relatively few schools or private providers will be at the margins of “wholly or mainly”. I thank him for the example of the international students who might be fee-paying.
On Amendment 68, I understand the Minister’s push-back in relation to exempting a whole school—I hope I addressed that in my opening remarks—but I am grateful to the noble Baroness, Lady Pinnock, for her explanation of how local authorities can separate out different parts within a hereditament. I would be grateful if the Minister could take back to the department that this measure just feels really illogical. It will not be a significant amount of money that is raised by withdrawing the relief where an independent nursery is part of a school but not withdrawing it where an independent nursery is not part of a school, particularly in the light of the noble Baroness’s expert insights into how that could be achieved.
With that, I beg leave to withdraw my amendment.
Baroness Barran
Member’s explanatory statement
This probing amendment seeks to understand how many students will be required to have an EHC plan in an institution to be exempt from private school status.
Baroness Barran (Con)
My Lords, in moving Amendment 60, I will speak also to Amendment 61. These amendments seek to probe the Government’s willingness to extend the definition for pupils with special educational needs and disabilities, and to test the appropriateness of the 50% threshold.
Amendment 60 probes the use of the “wholly or mainly” criterion and seeks to question why the Government have chosen a 50% threshold. It appears to be a rather arbitrary number, and although in our meeting before Committee, for which I am very grateful to the Minister, he indicated there were no schools close to being just either side of that threshold, we still have concerns. I would be grateful if he could confirm again at the Dispatch Box that the Government believe there are no schools in that bracket of being close to the 50% threshold. It would obviously be helpful if the Government could publish the data that supports that. If I have misunderstood in any way, perhaps the Minister could clarify.
Lord Khan of Burnley (Lab)
My Lords, Amendments 60 and 61 are concerned with the carve-out within the Bill’s measures for private schools that wholly or mainly provide education to pupils with education, health and care plans. Amendment 60 seeks to remove the “wholly or mainly” requirement, the effect of which would be to carve out from the Bill’s measures private schools that provide full-time education to any number of persons for whom an education, health and care plan is maintained.
I understand from the accompanying explanatory statement that this amendment seeks to understand the definition of “wholly or mainly”. As I have said elsewhere on a previous group on business rates, wholly or mainly generally means more than 50%. In practice, the Government believe that this will ensure that most private special schools will not be affected by the measure. We expect any private special schools losing charitable rates relief to be the exception; they will potentially be in single figures. Private schools that benefit from the existing rates exemption for properties that are wholly used for the training or welfare of disabled people will continue to do so. This general exemption means that they pay no rates.
I am aware that some concerns have been raised—the noble Baroness has raised them in clear and categoric terms—in relation to the possibility that some mainstream private schools may be just under or over the 50% threshold for the EHCP carve-out within the Bill. In private schools, including private special schools, just 5.7% of pupils have an EHCP, with the majority of those pupils in private special schools. Therefore, we do not expect there to be many mainstream private schools near the 50% threshold.
To add to that point, if there are any marginal cases, the test in law is whether the institution is wholly or mainly concerned with providing education to ECHP pupils. While it will be for the local authority to decide, this wording should avoid the need for schools at the margin to jump in and out of entitlement for charitable relief following small movements in pupils.
The majority of private special school places are funded by local authorities. The 2024 school census shows that in more than 80% of the sector more than nine in 10 pupils have an EHCP plan that stipulates that the place is funded by the local authority.
Amendment 61 would result in the exemption of fee-paying schools from the measure if that fee-paying school wholly or mainly catered to pupils who have special educational needs as defined under the Children and Families Act 2014, and regardless of whether or not those pupils also have an EHCP. The Government are aware of the concerns raised with respect to pupils with special educational needs in private schools that may lose their charitable relief, because the school is not wholly or mainly concerned with providing full-time education to persons for whom an EHCP is maintained. The Government have carefully considered their approach to ensure that the impact on pupils with the most acute needs is minimised.
The Bill provides that schools that are charities and wholly or mainly concerned with providing full-time education for persons with an EHCP remain eligible for charitable rates relief. The Government recognise that where a private school has only a few pupils with EHCPs, it will lose its eligibility for charity relief. Mainstream schools throughout the private and public sector cater for pupils with special educational needs. Most children with EHCPs already have their needs met within mainstream state-funded schools. If an EHCP assessment concludes that a child can be supported only in a private school, the local authority funds the child’s place.
The noble Baroness, Lady Pinnock, touched upon the issue of the wider problem in terms of delay, which I will address. Local authorities aim to process all education, health and care plans and the respective applications in time for the start of the next school year, so that parents can make an informed decision as to which school they send their child to. In special cases, the local authority is able to pre-pay one term’s fees if the education, health and care plan is not complete but the outcome is foreseeable. Likewise, some private schools will forgo the first term’s fees for pupils who are expected to be granted an EHC plan in the future.
The Government are committed to improving inclusivity and expertise in mainstream state schools, restoring parents’ trust that their child will get the support that they need to flourish. Private schools can provide choice, high-quality education, economic benefit and public benefit through partnerships and means-tested bursaries, but most parents cannot choose private schools. We need to improve provision for the 93% of pupils at state schools, and that is rightly our focus. The Government are also committed to reforming England’s SEN provision to improve outcomes and return the system to financial sustainability. The Government will provide an uplift of around £1 billion in high-needs funding in the 2025-26 financial year.
Mainstream schools throughout the private and public sector, as I said before, cater for pupils with special educational needs. Amending the basis on which fee-paying schools are able to retain their charitable rates relief in the way that this amendment proposes would undermine the Government’s intention to remove tax breaks for private schools in order to raise funds to support the more than 90% of pupils who attend state-funded schools. As the Committee will know, the majority of children in England who have special educational needs—with or without an EHCP—have their needs met in the state-funded sector. The approach chosen in the Bill is targeted to ensure that the impact on pupils with the most acute needs is limited.
It is for the reasons cited that I cannot accept the noble Baroness’s amendments, but I hope that, with this further information, I have provided satisfactory explanation as to the Government’s approach and reassurance that the approach adopted ensures that the impact on those children with the most acute needs is minimised. I request that the noble Baroness withdraws her amendment.
Baroness Barran (Con)
My Lords, I thank again the noble Baroness, Lady Pinnock, for the vivid picture that she painted in her remarks of the desperation of some parents whose children are struggling in a state-funded school, and who make huge sacrifices to send their child to an independent school. I also thank the Minister for his clarification, as I have understood it, in relation to my Amendment 60. I think he is saying that independent special schools are exempt in this legislation but mainstream ones will not be, because they are extremely unlikely to be anywhere near the 50% threshold in terms of EHCPs.
Baroness Barran
“(5A) An institution is not to be considered a private school for the purposes of sub-paragraph (3) if it is wholly or mainly concerned with providing full-time education where at least 7% of gross income is spent on means-tested fee assistance.”Member's explanatory statement
This amendment seeks to exempt schools where they offer bursaries or other means-tested assistance to pupils that amounts to more than 7 per cent of their gross income.
Baroness Barran (Con)
My Lords, in moving Amendment 63, I will speak to all of the other amendments in this group. Amendment 63 would exempt schools that provide bursaries that amount to more than 7% of a school’s income. This is a small cost, but comes at a time when private schools are already facing higher costs from the Government’s decision to impose VAT on them. I am concerned that schools will not have room in their budgets to continue providing the same level of means-tested fee assistance. I hope the Minister agrees that the provision of bursaries is an important factor in enabling children from less affluent homes to access independent education.
Amendment 64 would exempt schools which provide education for gifted arts students, including music and drama. These schools tend to be small independent schools, which will not be able to absorb the costs that the Government are imposing on them. Our worry is that they will be forced to close, and the culture that is so essential to our society will no longer be available in the same way. The Minister will know of the real concerns in this sector and the impact that it risks having on our creative industries, which are such an important engine of growth in this country. These are students who attend a private school based on their exceptional talent. I hope the Minister will reflect on how best to avoid narrowing opportunities for children who access this small group of schools.
Amendment 66 would exempt schools where 10% of pupils have a parent or guardian in the Armed Forces. If I have understood correctly, it seems unfair that while the children of foreign diplomats and international military personnel will be exempted from these additional costs on independent schools, specifically VAT, the same benefits are not being offered to the children of our own Armed Forces personnel. As such, it seems fair to suggest that the children of those personnel, who provide invaluable service to this country, are treated with the same level of respect.
I very much support the spirit of my noble friends Lord Black and Lord Lexden’s Amendments 69A and 69B. Clearly, the spirit of Amendment 69A aligns with my amendments in this group, and Amendment 69B highlights the invaluable work that some independent schools do in relation to children in care. I beg to move.
Lord Black of Brentwood (Con)
My Lords, I will speak to Amendments 69A and 69B in my name and that of my noble friend Lord Lexden as well as to Amendment 64 in the name of my noble friend Lady Barran, to which I have added my name. I refer to my earlier declaration of interests and, for this group, I add that I am the chairman of the Royal College of Music.
On music, let me start with Amendment 64, which is an extremely important amendment. It would have long-term ramifications well beyond the terms of this Bill because specialist music education for gifted students is central to the future of our creative economy, and it therefore needs to be seen in a wider context. As noble Lords will be aware, the UK’s creative industries are vital to our future. With the economy stalling, this is one sector which, for the time being, continues to grow. It employs hundreds of thousands of people, earns huge amounts in exports and provides an essential component of the UK’s soft power, something that is more important now than ever. Right at the centre of the creative economy is music, which powers the rest of the industry.
In turn, the future of music depends absolutely on first-class, specialist music education in schools, conservatoires and universities to provide a pipeline of talent into the sector. Without that education, music dies. However, music education, including that provided by specialist schools in the independent sector, is in trouble and has been for a long time. Music has been squeezed out of the curriculum. The number of pupils taking music at GCSE and A-level has plummeted. Many schools no longer have dedicated music professionals teaching the subject. Indeed, if pupils have access to a dedicated music professional today, it is likely to be because of a partnership with an independent school. From primary schools right the way through to the end of full-time education, music is under threat as never before.
We see the results of that every day, most recently with the appalling decision of Cardiff University to close its school of music, the largest in Wales, something that the world-renowned composer Sir Karl Jenkins has put down to the decline of specialist music education in schools. The closure of the school follows hard on the heels of the closure of the junior department of the Royal Welsh conservatoire, which has enormous repercussions for music in Wales and beyond. At such a time of crisis for music education, which I have to say has not improved in any way since the general election, despite so many promises before it, the last thing we need is for independent specialist music schools, those providing education for gifted students under the music and dance scheme, as well as the leading choir schools to be threatened. It is crucial that they continue to provide music, dance and drama teaching to the most gifted students if we are to protect the pipeline of talent into the music industry.
The future of these schools and their continuing ability to provide world-class teaching will be much more secure if they are protected from full business rates. This is not a niche subject or special interest pleading; it is fundamental to the artistic future of our country and the success of the creative economy. Does the Minister acknowledge the vital importance of the pipeline of musical and dramatic talent into our creative industries? If he does, will he explain why the Government are putting it in jeopardy in this way?
Amendments 69A and 69B deal with boarding schools. Boarding schools play a vital role in our education system, with around 65,000 boarding pupils educated in the independent sector. They contribute just over £3 billion each year to our economy, generating £900 million in revenue for the Exchequer and supporting more than 64,000 jobs. Like the rest of the sector, they are a vital instrument of soft power and one of our strongest exports. Like the rest of the independent sector, they are already under significant strain as a result of not just VAT but the damaging increase in employers’ national insurance contributions. For many, especially the smaller schools, the end of business rates relief will be a huge added burden. Already the signs of the impact are clear: the Government’s figures show that visa applications to study at UK independent schools fell by 23% in the first two quarters of 2024 compared to the same period in 2023. That is a significant straw in the wind.
Recently, one agent told the Boarding Schools Association:
“This tax penalty is making our clients think twice and wonder if the UK is still the holy grail of academia”.
Another commented:
“The reputation of British boarding is already damaged and while it was the destination 10 years ago, it is now one of many”.
With international numbers down and likely to fall further, now is not the time to be adding to the increasingly intolerable burden on so many boarding schools with the withdrawal of business rates relief.
Boarding schools play a crucial role in a number of areas, including the provision of places for military personnel serving our country at home and abroad, as my noble friend said, and for vulnerable pupils with special educational needs and disabilities. My two amendments seek to recognise their importance and, in certain circumstances, exempt them from the withdrawal of relief.
Amendment 69A would discount boarding facilities from a school’s business rates bill if 10% of boarders are on a government continuity of education allowance, or CEA. This reflects the importance of boarding provision for the children of those who serve our country and often risk their lives for it. In the last academic year, 4,000 pupils were supported by CEA for 2,666 service personnel and their families. By easing the commercial pressures on them, this exemption would give a measure of continued support and protection to schools providing places for CEA pupils and reflect the inherent public benefit in ensuring that service families have confidence that they can provide a stable school life for their children.
In the same vein, Amendment 69B would discount boarding facilities from a school’s business rates bill if that school is supporting looked-after pupils supported either directly by local authorities or by charities. It recognises the hugely important role of boarding schools in educating some of the most vulnerable children and the significant pastoral support that they provide. One of the best known charities supporting this work is the Royal National Children’s SpringBoard Foundation. The RNCSF widens access to the opportunities available for young people facing the greatest barriers to their development. Along with local authority and community organisation partners, it works with boarding and independent schools to help them target their fully funded school places on the young people who need them most and help them access them effectively. To date, it has supported more than 1,000 pupils, 98% of whom get two or more A-levels, compared to 16% of disadvantaged children.
Brentwood is one school the RNCSF works with, taking students into boarding places, hosting regional interview days and supporting its excellent campaign to help children in care who are applying to university with their UCAS applications. This is clear public benefit work, supporting not only society’s priorities for vulnerable children but assisting our stretched local authorities support children in their care to achieve their full potential. This is, rightly, an intensive and involved process for any school to engage in to ensure that pupils have the right level of support and guidance around them at school. If anything properly fits the definition of a charitable activity clearly in the public interest, it is this. My question to the Minister is: why on earth do the Government judge that the facilities that care for and support these young people are unworthy of charitable relief?
These are all focused amendments which do not in any way challenge the central tenets of the legislation but recognise the special importance and public policy significance of crucial aspects of independent education. They seek to protect those schools educating gifted students whose careers will power the creative economy, children of military families who serve our country and those who are vulnerable because of special needs. I hope the Minister will accept them. Not to do so would, frankly, be callous and short sighted.
Baroness Barran (Con)
I thank the Minister for his remarks, although some of the points raised, particularly by my noble friends Lord Black of Brentwood and Lord Lexden, perhaps deserve more consideration by the Government. I will come back to those in a moment.
In relation to my Amendment 63 regarding bursaries, I think that I am right in saying that the provision of education is a public benefit in its own right, not the provision of bursaries. The noble Lord may be trying to dial up the public benefit, but education sits firmly within that definition.
My noble friend Lord Black of Brentwood was extremely eloquent in relation to my Amendment 64. I thank him for the examples that he gave of the impact of pressure on these specialist schools more widely, for the economy and for our higher education sector, as in the example of Cardiff University. As he said, these are not niche issues but absolutely central to our thriving creative industries. The Government rightly talk about growth as their primary objective but if their actions will limit growth rather than promote it, that is cause for really serious concern.
The noble Lord talked about adjustments for the music and dance scheme, but he will obviously be aware that the sector is extremely worried about what will happen after 2025-26. There is an adjustment for the current year but no visibility beyond that. Similarly, in relation to Amendment 66 and the recalculated rates for those eligible for the continuity education allowance, the same question mark remains over the longer term.
If there is one thing in this group that the Minister should reflect on very hard, it is Amendment 69B regarding children in local authority care who attend our independent schools. I join my noble friends in absolutely lauding the work of the Royal National Children’s SpringBoard Foundation.
In closing, to quote my noble friends again, whichever way the Government want to look at it, we either have clear public benefit from all the work that is reflected in the amendments in this group or we have drivers of growth, whether through international students—where, as we have heard, numbers are now at risk of falling sharply—or through providing a kind of fuel for our creative industries. Whichever perspective one looks from, threatening these schools is an unwise strategy and I hope very much that the Minister will reflect on these remarks. With that, I beg leave to withdraw my amendment.
Baroness Barran
“(5A) An institution is not to be considered a private school for the purposes of sub-paragraph (3) if it has a religious character or other special character and there is no maintained school or academy of the same character within the specified distance from the school.(5B) In this paragraph— “religious character” has the meaning given under section 69 (duty to secure provision of religious education) of the School Standards and Framework Act 1998;“other special character” has the meaning as defined by the Secretary of State by regulation;“specified distance” is the distance specified under section 444(5) (offence: failure to secure regular attendance at school of registered pupil) of the Education Act 1996.(5C) Regulations under this section are to be made by statutory instrument.(5D) A statutory instrument containing regulations under this section may not be made unless a draft instrument has been laid before and approved by a resolution of each House of Parliament.”Member's explanatory statement
This amendment seeks to exempt schools that are faith schools.
Baroness Barran (Con)
My Lords, Amendment 65 is a probing amendment to understand the Government’s thinking in relation to faith schools. As we have heard on numerous occasions in Committee, our concerns about the financial viability of the sector relate to the combination of VAT, the potential increase in employers’ national insurance contributions and now business rates. This combination is potentially most acute for faith schools, for three main reasons.
First, as the noble Lord knows, they often charge lower fees than other independent schools and have less financial resilience. This is particularly true for some Muslim and Jewish schools. Secondly, for parents where choosing a faith school is really important, there will often be no state-funded alternative at all locally, in the case of smaller faiths, or, for the larger faiths, provision with spaces available for these children at short notice.
Finally, if this is the case, we are concerned that this could contribute to an increase in children who are educated at home, which is something I know the Government plan to contain through the Children’s Wellbeing and Schools Bill. Our concern is that the combination of pressures on these schools will cause them to close with the unintended consequences that I have outlined. I would be grateful if the Minister could explain what assessment the Government have made of each of these three risks, and how they plan to mitigate them. I beg to move.
Lord Khan of Burnley (Lab)
My Lords, Amendment 65 would mean that a private school with a religious or other special character maintained its eligibility for charitable relief where there is no maintained or academy school of the same religious character or other special character within the statutory walking distance as set out in the Education Act 1996. It would create an additional delegated power within the Bill whereby the Government, by secondary legislation, would be able to define what is meant by a special character. While the amendment does not indicate what may constitute a special character, we understand from the contributions made in the other place, as well as from the noble Baroness’s contribution, that this could be used to carve out schools that follow a particular method of education or provide specialist tuition.
Amending the basis on which fee-paying schools are able to retain their charitable rates relief in the manner in which this amendment proposes would undermine the Government’s intention to remove the VAT and business rates tax breaks for all private schools. As we have said, removal of the business rates charitable relief is necessary in order to raise funds to support the more than 90% of pupils who attend state schools. The Government have carefully considered their approach and have decided that private schools that are charities will be carved out from the Bill measure only where they wholly or mainly provide education for pupils with EHCPs.
It would be inconsistent and unfair to exempt any other types of private schools from this Bill measure. However, the Government value parental choice and recognise that some parents want their children to be educated in a school with a particular faith, ethos or other characteristic, such as following a particular education method. Pupils who follow a particular faith, education method or other characteristic can be accommodated in the state sector. All children of compulsory school age are entitled to a state-funded school place if they need one, and all schools must comply with their obligations under the Equality Act 2010. In addition, schools are expected to promote fundamental British values, including the values of mutual respect and tolerance for those with different faiths and beliefs. The Government are not considering further exemptions to this policy, and therefore there is no need, as the amendment attempts, to give the Secretary of State the power to establish and define new designations of schools’ character in order to then exempt them from this measure. For these reasons, I am unable to accept the noble Baroness’s amendment.
Baroness Barran (Con)
The Minister says again that this undermines the Government’s intention, but then in the next breath says that the Government value parental choice. It is one thing to say that a child can be accommodated in a state school—the Minister knows that there are certain parts of the country where even that is not necessarily a given, where state school spaces are very limited indeed and therefore one is putting pressure on parents and children to travel further than is ideal—but there is not the ability to place a child in a school with a specific faith designation, particularly for smaller faiths, in the way that he suggests. I do not think one can say that one values parental choice and then not offer parents something that they have strived to offer to their children.
Again, as in relation to my earlier amendment, these are schools, as I said in my opening remarks, where the fees, particularly in the Muslim and Jewish communities, are often two-thirds or half of a state-funded place. We are very concerned that this will result in children being educated at home, which carries with it certainly limitations in terms of socialisation for those children, at best, and, at worst, potentially wider risks to those children.
Lord Khan of Burnley (Lab)
I am conscious that the noble Baroness made a strong point; it has just come to my knowledge that I did not address it in my response. We estimate the overall impact to be that business rates changes will lead to around 3,100 fewer places in the private sector. Of those 3,100 pupils, the Government expect 2,900 to move to state-funded schools. The remaining 200 pupils will be international students returning to schools in their home nations, or domestic students moving into home-schooling.
The noble Baroness talked about home-schooling and mentioned the Children’s Wellbeing and Schools Bill. The Government will introduce a duty on parents to inform their local authority when they choose to home-educate their child. Measures in the Children’s Wellbeing and Schools Bill will ensure that the most vulnerable children do not slip under the radar of the professionals who are there to protect them. I am grateful to the noble Baroness for allowing me to intervene to say that the overall impact of this transition for private schools is on around 3,100 pupils.
Baroness Barran (Con)
I thank the Minister for that additional clarification, but the reality is that it is one thing if those 3,100 pupils are spread across the country, but quite another if they are in a handful of local authorities that are already full. I beg leave to withdraw my amendment.
Baroness Barran (Con)
My Lords, it will not surprise the Minister to know that I agree entirely with the amendments tabled in the name of my noble friend Lord Moynihan to ensure fairness and clarity in the treatment of private schools in relation to means-tested fee assistance and business rates. My noble friend was so eloquent and knowledgeable about the benefits of sport to all children. I am sure all across the Committee agree that he gave brilliant examples of both the physical and the mental health benefits. As someone who avoided sport at all costs in school and came to it later in life, I agreed with him and felt slightly guilty as I listened.
By preventing these schools being classified as private schools, the amendment highlights the value of their contribution and safeguards them from financial disadvantage. As my noble friend put so clearly, it would allow them to make sure that the sporting opportunities they offer can continue to grow, since they are so vital for our communities.
Amendment 69 addresses the valuation of sports facilities in relation to non-domestic rates and would ensure that the inclusion of sports facilities, which play such a crucial role in the development of young people, does not unfairly increase the business rates burden on schools. I am worried that the Minister will say that this amendment goes against the spirit of the legislation, so I am going to try a different approach to convince him both that this may amendment be one to focus on and to accept my noble friend’s suggestion to meet in order to try to find a way through.
First, as my noble friend said very clearly, whether we are talking about grass-roots local sport for someone as untalented and unable to hit a ball as I was or sport at the highest possible level, these schools provide opportunities in a way that we do not see widely in our communities. Secondly, my noble friend was clear about the importance of dual use for both local pupils in the wider community who do not attend the school and those who do attend the school.
The last thing I would stress is that the Minister has spoken on several occasions about the importance of raising money to invest in our state schools and the 93% of children who attend them. However, if we sat down to do the maths and tried to work out what it would cost to bring our state schools up to anywhere near the standard of what they can access in their local independent schools, I think we would find that, in capital terms, it is many times the amount that will be raised from VAT and the £70 million through this Bill.
I urge the Minister to take up my noble friend’s invitation to explore this issue and see whether we can find a way through. It is entirely reasonable to raise the bar and encourage independent schools to offer that dual use to make sure that their local communities benefit. Whether you take it from that perspective or a purely financial perspective, these amendments deserve great attention from the Minister.
Lord Khan of Burnley (Lab)
My Lords, I will now speak to Amendments 67 and 69 in the name of the noble Lord, Lord Moynihan. I just let him know that I have a great passion for rowing, developed at the time of Redgrave and Pinsent. Unfortunately, I was only two years old when the noble Lord won the silver medal in Munich in 1981, so I cannot classify him as my hero, but I know that he will be a hero to many across the country and the world.
These proposed amendments seek to introduce a carve-out in the Bill for private schools where 10% of students are in receipt of a bursary or scholarship for sporting excellence. I am aware that this type of fee support can be provided to any pupil who meets the requirements set by an individual private school; similarly, it can be provided on a means-tested basis. The other amendment tabled by the noble Lord, Lord Moynihan, seeks to ensure that no part of a private school that is used primarily for sport is included in the valuation of the school for business rates.
Providing means-tested fee assistance is one way in which charitable private schools can demonstrate public benefit—a requirement that accompanies charitable status. As I have stated elsewhere, the Bill does not remove the charitable status of private schools, and the Government expect them to continue to demonstrate public benefit, whether that is through the provision of means-tested bursaries or through other means, such as sharing facilities or working with state sector schools.
Ending the VAT and business rates tax breaks on private schools is a tough but necessary decision to help deliver on the Government’s ambition to eliminate barriers to opportunity by concentrating on the broader picture and towards the state sector, where over 90% of children in England are educated. Barriers to opportunity also appear in the sporting world, as I am sure the noble Lord is aware. The Government are committed to improving access to sports and physical activity for all. Everybody, no matter who they are or where they are in the country, should have access to the best possible provision of sports facilities and opportunities to get active.
These amendments would reduce the scope of the Bill measure by removing private schools from the definition and thus reducing the amount of revenue raised. This would limit the additional funding secured to help deliver the Government’s commitments on education and younger people. Furthermore, it would be operationally unfeasible to implement requiring local authorities to audit the financial operations of charitable private schools to ascertain whether they meet the threshold, as per the amendments, when calculating their business rates bill for the financial year.
I shall now address the other amendment in the name of the noble Lord, Lord Moynihan. I understand that part of the reason for it is a recognition that some private schools share their sporting facilities with neighbouring schools or the general public. As I have said, the Government expect private schools that wish to remain charities to continue to demonstrate a public benefit, such as by making their sporting facilities available more generally. That will not change. The amendment seeks to remove sports grounds from rating valuations. Exemptions of this nature, where part or all of a hereditament is removed entirely from rating valuations, are the most general and exceptional forms of support in business rates. They are reserved for cases such as agricultural land, places of public religious worship and, as we have already heard during the passage of this Bill, certain property used for disabled persons.
Despite the clear value of shared sports facilities at private schools, I do not think that it would be right to confer upon them such a level of benefit, especially when exemptions of this nature are not available to other sports facilities or even to charities more generally. Although these facilities are being used for sports and may be shared with the community, they remain part of private schools and are clearly used for their purpose; indeed, for many private schools, such sports facilities are a vital part of their offer to parents. It would therefore hardly be consistent with the overall purpose of Clause 5 to exclude them.
This story is very personal to me because I was an aspiring cricketer and did not make it through the system. I know that that was because of a lack of facilities and support at my local clubs and my local school, so I understand entirely the premise of what the noble Lord, Lord Moynihan, is attempting to do. I say to him and the noble Baroness, Lady Barran, that I will take this matter away and reflect on it; I will speak to colleagues, officials and other colleagues in the Treasury.
Let me let noble Lords know that the Government are committed to improving access to sport and physical activity for everybody. Sport and physical activity are central to achieving our health and opportunity manifesto missions, with the biggest gains coming from supporting those who are inactive to move more. Everyone, no matter who they are or where they are in the country, should have access to the best possible sports provision and facilities. The Government’s arm’s-length body, Sport England, is investing £120 million between 2025 and 2029 to increase participation in sport and boost diversity at the grass-roots level in order to give more and better opportunities to all young people to explore and develop their potential. This funding will increase and enhance opportunities for talented young athletes in England to explore and develop their athletic potential, regardless of their background or financial circumstances. Through creating more inclusive talent pathways, the Government want to increase participation in sport and boost diversity at the grass-roots level in order to give all young people more—and better—opportunities to explore and develop their potential. Sport England also wants to drive greater diversity within national teams, which will in turn demonstrate to the next generation of young people that they could have the same potential to reach the Games.
The PE and sport premium is a ring-fenced grant for eligible primary schools and other educational establishments. In March 2023, as noble Lords will recall, the previous Government announced more than £600 million of funding for the 2023-24 and 2024-25 academic years. Schools must use funding to make additional and sustainable improvements to the quality of the PE, sport and physical activity that they provide.
I just want to say that this is a vital debate. I thank the noble Lord, Lord Moynihan, for his contribution. The noble Baroness, Lady Barran, said something interesting: she was not interested in sport early on but got into it in later life. Let me be absolutely clear: I learned to swim only last year. I was taught by my daughter; my 10 year-old daughter taught me to swim. I would have loved to have swum much earlier but I did not have the opportunity, resources or means to do that, so I recognise exactly the sensitive nature of what we are trying to do. The Government are supporting this through their work and funding. In particular, I recognise that the PE and sports premium is a ring-fenced grant. We must make sure that all children are supported. I thank the noble Lord for his contribution but, for the reasons I have set out previously, at this moment in time, I am unable to accept these amendments; however, I hope to go away and reflect on what the noble Lord said. In the meantime, I hope that I have provided the noble Lord with satisfactory information in relation to the difficulties and technicalities in these amendments, and I ask him to withdraw his amendment.
Lord Black of Brentwood (Con)
My Lords, I support all the amendments in this group but I shall speak in particular to Amendment 72A in my name and that of my noble friend Lord Lexden. I refer to my earlier declaration of interests.
The Minister has been very emollient and courteous in batting off all our amendments today; I thank him for the way he has dealt with them. Although he and his colleagues throughout government like to bury their heads in the sand and pretend otherwise—as we have seen, I am afraid—the impact of their onslaught on independent education, of which the removal of business rates is just one strand, will have profound ramifications for not just the sector and the children educated in it but a wide range of public policy areas. This is a bit like that game of Jenga, which we have probably all played, where blocks of wood are taken out until a point comes where the removal of one of them causes the whole edifice to crumble. That is what is in danger of happening here, with the sustained attack on independent education in danger of causing policy failure in a wide range of other areas.
Consider quite how far-reaching are the consequences of this policy underpinned by Clause 5. It impacts on public health and the care of vulnerable children; on the future of music, drama and the arts in the UK, which we have talked about today; on military families and defence personnel; on state schools, whose class sizes will increase; on multiculturalism and respect for different faiths; on jobs, export and investment; on local communities, volunteer groups, charities and so on, which depend on partnership with independent schools; on sport, as we have heard so eloquently described; and on soft power and Britain’s standing abroad. As a result of this web of different aspects that will be affected and will impinge on so many different aspects of government policy, it is vital there is an impact assessment of the consequences of Clause 5 taken in conjunction with the Government’s other policy changes. That is what my Amendment 72A provides for.
Apart from everything else, Parliament has a continuing responsibility to scrutinise the Government’s actions in this area. That is what this House, in particular, is here for. To do that, we need not just the data provided by the industry’s own excellent associations but data from across government and a detailed assessment of its implications. Given the profound changes to policy that Clause 5 exemplifies, ripping up five decades of orthodoxy about parental choice, such an impact assessment is the very least we should expect to allow us to fulfil our responsibilities and make clear to the public what its consequences are.
Baroness Barran (Con)
My Lords, I shall speak to Amendments 71 and 72 in my name and express my support for Amendment 72A in the name of my noble friend Lord Black of Brentwood. Amendment 71 would require an impact assessment on rescinded facilities that private schools offer to state schools. Amendment 72 would require an annual statement of how many pupils have been moved into the state system as a result of Clause 5. Many in this Committee have expressed concerns about the impact of the combined tax measures on private schools introduced by this Government. We had a number of examples from the noble Baroness, Lady Pinnock. The changes announced in this legislation, combined with VAT applied to private schools, will no doubt harm many institutions. Indeed, as we have heard, we are already seeing the consequences of the Government’s decisions, with a number of private schools, including, most recently I think, Bedstone College in Shropshire, closing their doors.
As my noble friend Lord Lexden said in relation to an earlier group, there appears to be an emerging trend of small, rural private schools being particularly vulnerable. This raises the real risk of thousands of pupils across England being displaced and moving into the state system. As we discussed earlier, in particular parts of the country, that is not much pressure on the state system, but is potentially the reverse. However, in some parts of the country, such as Bristol or Surrey, schools are operating at full capacity. It is essential that we have proper oversight and transparency of the impact of this legislation on the state sector. It is with that in mind that I tabled Amendment 72. I also welcome Amendment 70 in the name of the noble Lord, Lord Storey. It is clear that all of us share many of the same concerns.
On Amendment 71, as we have heard, many private schools have a long history of collaboration with state schools and of sharing their facilities and resources. My noble friend Lord Moynihan gave an eloquent exposition on the value of sports grounds, but theatres and science laboratories provided by private schools offer many state school pupils opportunities that otherwise they might not have. Therefore, the closure of such schools would be felt by state school students as well as private school students as they would lose access to these resources. The Minister says—and I understand why—that it reflects the Government’s expectations for these schools to continue to offer public benefit, and one option for that is sharing their facilities, but, as we have heard, their income is being pressured from a number of different directions, including by this legislation, so I urge the Minister to consider my Amendment 71 and all the others in this group.
The Earl of Lytton (CB)
My Lords, I support the amendment in the name of my noble friend Lord Thurlow, which relates specifically to Clauses 1 to 4. The business community was clearly expecting something rather different from what we have before us now, based on the Labour Party manifesto, so ably referred to by my noble friend. At the very least, we should be told the plans for where and when this longer-term reform, which was promised, will be mapped out. While the Treasury cannot make an accurate impact assessment until the new valuation figures are known, equally, businesses and their professionals have no idea either.
This rather matters, because it is not just a new list, as we heard from the noble Lord, which itself would come with inevitable transition arrangements, there is also the impact of the lower multipliers and the increased burden of supplements, which we believe will not be known until the Autumn Statement: that part will not be known, even if the contents of the new valuation list are known in advance. I am very doubtful whether lower multipliers will do much to move the dial on this, but I think the supplements will probably be a different matter altogether.
There is another point, which the noble Lord, Lord Lexden, touched on a few minutes ago. Parliament is entitled to be properly informed about the likely impact. I have suggested previously that this is not impossible, even without firm figures. The fact that the Government are not prepared to do this is, I feel, of particular concern, because they therefore cannot demonstrate that their policies on multipliers are actually competent and will achieve the support supposed and the rebalancing that has been claimed. For those reasons, I support the amendment, and particularly that more time should be allowed to consider the impact, to in some way soften the introduction and give businesses space to consider their options.
Baroness Barran (Con)
My Lords, I shall speak to my Amendments 75 and 76. Amendment 75 is a probing amendment to ensure that the Government have considered and made an assessment of how the provisions of the Bill will impact on the ability of students on bursaries to access universities. Despite the picture that the Government are trying to paint, private schools provide genuine benefits to their local areas and offer education at a significantly reduced rate to families, including low-income families, through their bursary schemes. We also know that pupils from independent schools are more likely to go to university. If, as was discussed in earlier groups today, these schools cannot find enough money to provide bursaries, or not in the same quantities as before, these students will no longer be able to access the same opportunities. With this in mind, I hope the Minister can reassure me that the Government have thought about this and perhaps give the Committee his assessment of its impact.
Amendment 76 would delay the implementation of Clause 5 until 2026 to allow schools time to prepare properly. Despite this not causing a large fiscal impact on schools, they are facing a number of changes and have not being given time to adapt and readjust their budgets—most notably, of course, in relation to VAT—and this is having a real and very negative impact on the ground. As we have heard in Committee this afternoon and as the Minister knows, some schools have already closed as a result of the very abrupt imposition of VAT in the middle of the school year. The amounts in this section of the Bill will make very little difference to the Government and there is no real reason to implement immediately. Rather, it would show some good will on the part of the Government to give schools time to prepare.
Turning to Amendment 74 in the name of the noble Lord, Lord Thurlow, although we are not supporting this specific amendment, I agree with him that what is lacking from the Bill is any firm indication or clarity about what its impact will be. My understanding, and perhaps the Minister can confirm this, is that the Government will not decide the multipliers until after the spending review, although I think the noble Lord, Lord Thurlow, suggested that it might be earlier. Therefore, as we have discussed throughout Committee, not having published an impact assessment is a failure on the part of the Government. I agree with the noble Lord that not enough is known about the impact that the Bill will have on our economy and, crucially, on our high streets.
Non-Domestic Rating (Multipliers and Private Schools) Bill
Baroness Barran ExcerptsWednesday 29th January 2025
(1 month, 4 weeks ago)
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Baroness Barran (Con)
My Lords, I would like to add to the noble Baroness’s list of messages to send to the noble Lord, Lord Khan, and his family. I send my very best wishes to them at this time.
I listened very carefully to the speeches made by your Lordships this evening. I am struck by the range of concerns expressed across the House, based, as they appear to be, on a lack of transparency in the Bill and the number of moving parts. In fact, the clarity is so absent that my noble friend Lady Scott and the noble Lord, Lord Fox, ended up with very different analyses of where the impact of the Government’s proposed changes will fall.
The Government are rightly focusing on much-needed growth in our economy, and I do not doubt their commitment to achieving that, but there is a lack of alignment in the actions that they have been taking in order to deliver on that aspiration. This Bill comes after the harmful decision to increase employers’ national insurance and ahead of the impact of the Employment Rights Bill—one where, as the noble Baroness knows, the Regulatory Policy Committee has been deeply critical of the Government’s impact assessment, deeming it not fit for purpose and, crucially, stating that the cost to business will be higher than the £5 billion forecast by the Government. My noble friend Lord Jamieson was spot on when he said that businesses needed to be nurtured and not taxed.
I echo the concerns of my noble friend Lady Scott of Bybrook and other noble Lords. This Bill does not achieve what the Government committed to in their manifesto—namely, the reform of the business rates system: as the noble Earl, Lord Lytton, said, quoting again,
“the levelling of the playing field between the high street and the on-line giants”.
Since the Bill does not do that, it would be helpful to the House if the Minister could explain why.
We are, as the noble Lord, Lord Fox, and other noble Lords have said, once again having to respond to a Bill which does not give us clarity on how it will work in practice and what its impact will be. There has been no proper consultation with businesses, no impact assessment on Clauses 1 to 4 and no clarity on what the business rate multipliers will be. The Minister explained the technical reasons why the latter is the case, but I think—and hope—she could be sympathetic to some of the questions that have been posed to her across the House. If the Bill becomes law without amendment, it will give the Government powers to set business rates multipliers without clarity on how those powers will impact on businesses.
Therefore, can the Minister give the House a forecast for how these proposed changes in business rates will affect council budgets and the revenue they receive, and the revenues to the Exchequer? Ideally, as my noble friend Lady Scott asked, we would like an explanation before we reach Committee. Do the Government have an official estimate of the impact of these measures on jobs? As the noble Baroness knows, retail alone employs 5 million people. She will have seen the forecast from the Centre for Retail Research projecting that more than 17,000 shops are expected to close this year.
It would also help if the Minister could give the House more clarity on the impact on different categories of businesses. We have heard concerns about pubs, leisure centres and anchor stores in high streets. We know that the reduction in small business rate relief from 75% to 40% will have a big impact on many of those businesses, with hospitality, leisure and retail paying just over 30% of all business rates, much larger than their contribution to GDP overall.
We also heard concerns from the noble Earl, Lord Lytton, about the impact on local authority schools, hospitals, police stations and, potentially, our universities. The Minister will have seen calls from the Local Government Association for further clampdowns on business rates avoidance, and I wondered what the Government plan to do to respond to those. The LGA has also called for more flexibility for councils on business rate relief in relation to charities and empty properties and the ability to set their own multipliers, either above or below the national multiplier. My assumption is that that is a reflection of how they feel that they have a real understanding of their local situation and pressures, and want to be able to respond to those. Again, it would help if the Minister could respond to that.
I hope very much that the Minister, who I know does listen, will listen to those concerns from across the business community: from the Association of Convenience Stores to major retailers such as M&S and Sainsbury’s, from leisure centres to hospitality businesses, and from universities to the public sector.
Turning to Clause 5, I thank my noble friends Lord Waldegrave, Lord Maude and Lord Lexden in particular for their extremely eloquent and heartfelt arguments in favour of a more generous and collaborative approach. Certainly, I can speak personally from my time in government and say that we tried to emphasise and encourage more collaboration, and more contribution from independent schools. Now, when faced with a new schools Bill from the Government, we would argue that the flexibilities that have unlocked so much energy, as we heard from my noble friends, in preschools and academies, should be given also to maintained schools.
I went to see the most wonderful primary school—if anybody is in Oldham, I would recommend a visit—last week. It is a maintained school, but it is achieving what it is achieving despite its maintained-school status, rather than because of it. It cannot have all the flexibilities, in terms of timetabling and length of school day, that it would have if it were an academy.
The broader picture for independent schools, as we have heard, feels like continued attack, with the decision to apply VAT to fees part-way through the school year, and now the decision to remove their entitlement to business rates relief for those with charitable status. As we have also heard, schools are also hit by the rise in national insurance contributions and by the increased contribution to the teachers’ pension fund. It is hard to understand this decision in anything other than ideological terms. As we have heard, it does not raise significant sums of money: £70 million out of the £1.8 billion which the Government hope to raise from VAT and this proposal. The same change is not being proposed for stand-alone nurseries, but it will impact nurseries that are part of an independent school. As we have heard from other noble Lords, this seems a curious way, at best, to approach charity law. It will, as we have heard, create a two-tier charity system in which some charities can be disadvantaged fiscally, even when they comply fully with their charitable obligations and serve their communities.
Secondly, we are very concerned about the displacement into state schools of some pupils who are currently in independent schools, particularly those with special educational needs and disabilities. I understand that the Government have estimated this number to be just under 3,000 pupils. As I mentioned to the Minister when we met earlier this week, the national figure is not so important. What is important is what is happening in those local authorities that really have no spare places: in areas such as Surrey or Bristol or, as my noble friend Lord Lexden said, in areas such as Bury and Salford, where small, low-cost faith schools will be hit by this move.
How are local authorities in these areas going to accommodate children whose parents can no longer afford to send them to an independent school, and now need a place in the state system? Where is the capital funding going to come from to pay for these places? There are normally long lead times on pupil-place planning for a good reason; children cannot be accommodated well at very short notice.
While these specific measures will have a relatively small effect on displacement into state schools, we need to be clear that there will still be some displacement, and that is a cost to the state. More importantly, when it comes to individual places, it will be a strain on class sizes in some of our local schools and, ultimately, on parents’ prospects of getting the first-choice school they want their child to go to.
The Minister will know that we are particularly concerned about children with special educational needs and disabilities in this context. Some parents have felt they want their child to be educated privately and have made great financial sacrifices to do so. They have not sought an education, health and care plan because they do not want their child labelled in that way, and some of these children will now enter the state system and put more pressure on stretched SEND teams. What support will the department give to schools and trusts to make this workable? Will it commit to monitoring these moves and reporting on them, including any funding and placement challenges for local authorities, as the LGA has requested?
More broadly, all around the country, independent schools are involved with their local state schools, working in partnership, sharing resources such as swimming pools, theatres, academic staff and more. Have the Government assessed the impact on state schools if it becomes impossible for independent schools to continue these partnerships, as my noble friend Lord Waldegrave explained, having to focus rather on retaining bursaries, in line with their charitable objectives?
Of course, we welcome the carve-out for schools that wholly or mainly educate children with an education, health and care plan, but I would be grateful if the Minister can confirm how many schools this applies to and how many children are educated there.
This Bill raises many more questions than it answers. Maybe one could generously say that the Government’s direction of travel has been sketched out; the detail along the way certainly has not. While the Government talk about importance of certainty, businesses are not getting certainty with the Bill, apart from, of course, charitable independent schools, where the misguided decision to tax some parts of our education system is all too clear. I appreciate I have asked the Minister many questions. I look forward to her reply, but if she is not able to answer all of them, I would be grateful if she could write.
International Women’s Day
Baroness Barran Excerpts(2 years ago)
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The Parliamentary Under-Secretary of State, Department for Education (Baroness Barran) (Con)
My Lords, I thank all noble Baronesses and noble Lords who have spoken today. In particular, I welcome my noble friend Lady Lampard; like hers, my mother was both a refugee and an indomitable woman, so I can identify with some of what she said. The noble Baroness, Lady Finlay, mentioned the warm welcome she got when she arrived in this House from the noble Baroness, Lady Gale; the noble Baroness gave me an incredibly warm welcome and I know that my noble friend will receive an equally warm welcome from all sides of your Lordships’ House.
Our debate today has provided a space in which to reflect on the many challenges that disproportionately affect women and girls. However, it has also shone a light on the progress we have made in overcoming some of the barriers that prevent women and girls fulfilling their true potential.
Of course, as your Lordships have noted, it is critical in achieving this both at home and abroad that girls and young women get a proper, broad education. It is only fitting, therefore, that I remind the House that the UK is a world leader in championing girls’ education. We used our presidency of the G7 in 2021 to agree two ambitious global targets: getting 40 million more girls in education and 20 million more girls reading by the age of 10 by 2026. Educating girls helps to prevent child marriage and early pregnancy; it helps women into the workforce; and it boosts household incomes and economic growth.
There is a huge global education crisis, exacerbated by the Covid-19 pandemic, with 244 million children out of school globally. More than half those children are girls. Through the girls’ education action plan, which we published in 2021, the UK supports education systems in developing countries to deliver quality education for all children in a way that is safe, inclusive and sustainable. That is so important to overcome some of the stereotypes that a number of your Lordships referred to, including the noble Baronesses, Lady Barker and Lady Ludford, my noble friend Lady Jenkin and the noble Lord, Lord Sahota. Indeed, I got a text message from my daughter this morning because apparently the Financial Times is running an article titled “Style Your Life FT Pink”. She reminded me that, when she was a child, she thought her father got a grey paper and her mother got a pink paper because her mother was a woman. Someone had better break it to the editor of the FT.
At home, the Government recognise the huge contribution of the early years workforce to making sure that every child has the best start in life. The noble Baronesses, Lady Watkins, Lady Twycross and Lady Thornton, and the noble Lord, Lord Monks, all stressed the importance of accessible and affordable childcare. I was concerned about the case the noble Baroness, Lady Watkins, raised of a woman who found it too complex to navigate. Supporting the childcare and early years workforce continues to be a priority for the department. That is why we are supporting the sector in early years to recruit and retain more staff, for example by providing additional funding for graduate-level specialist training leading to early years teacher status. As the noble Lord, Lord Addington, knows, we are also funding an accredited level 3 early years SENCO qualification so that all children with special educational needs and disabilities, in particular the young girls to which the noble Lord referred, are identified at the earliest possible point.
In relation to childcare, we know that the sector is facing economic challenges similar to the challenges faced across the economy. We have already announced additional funding of £160 million in 2022-23, £180 million in 2023-24 and £170 million in 2024-25, compared with the 2021-22 financial year, for local authorities to increase the hourly rates paid to childcare providers. This is crucial for improving the cost, choice and availability of childcare for working parents.
More broadly, in relation to flexible working, which the noble Baroness, Lady Watkins, referred to, on 5 December 2022 the Government published the response to their consultation on flexible working, which committed to give all employees the right to request flexible working from their first day of employment. This will ensure that an additional estimated 2.2 million people will be able to request changes to their hours, times or place of work. The Government have also committed to further legislative changes that will support more open and constructive engagement between employers and employees to find acceptable flexible working arrangements.
My noble friends Lady Seccombe, Lady Meyer and Lord Shinkwin all expressed their concerns about the relationships and sex education curriculum in schools. Just to clarify for the noble Baroness, Lady Ludford, the Government are clear that biological sex is a fact. It exists and it clearly matters.
There is a very sensitive and precious relationship between schools and parents, and keeping that confidence and level of trust between schools and parents, particularly in these very sensitive areas of the curriculum, is critical. My right honourable friend the Prime Minister was absolutely clear earlier this week when he said that schools should not be teaching inappropriate or contested content in this area. Our priority should always be the safety and well-being of children, and schools should make the curriculum content and materials available to parents. We will be bringing forward a review of the statutory guidance on the relationship, sex and health education curriculum and starting a consultation on that as soon as possible.
My noble friend Lady Sater and the noble Lord, Lord Addington, referred to the importance of school sport. I feel I need to readjust the noble Lord’s perception of status: I think, given the performance of the Lionesses, that perhaps status has tipped a little in favour of the women—but I will leave him to consider that point.
Lord Addington (LD)
The point I was making was that football is traditionally seen as a male sport—that is the status they have gained—not the fact that women’s sport itself has changed.
Baroness Barran (Con)
The noble Baroness, Lady Chakrabarti, has put it well: it was meant in the spirit of this debate. I thank my noble friend very much for welcoming our announcement this week, particularly as I was that girl who dreaded the sports lesson, unlike my noble friend who could not wait for it. We have announced additional funding to support schools to provide high-quality PE and sport to pupils and to make sure that girls have exactly the same access to sport in schools. We want to really acknowledge and highlight, through the School Games Mark, those schools that can really demonstrate their delivery in this area. My noble friend is absolutely right to highlight the role of coaches, and the Government absolutely share her view of the importance of sport in building confidence, well-being and physical and mental health.
On the issue of women and girls in STEM, the noble Lord, Lord Browne of Ladyton, rightly highlighted the extraordinary contribution of women scientists in the Covid-19 response. I thank the noble Viscount, Lord Stansgate, for also bringing our focus on to women who are at the early stages of their STEM career. I can reassure the noble Baroness, Lady Bennett of Manor Castle, that the Government absolutely understand the importance of the issues she raised in relation to ecology, soil systems and the like. She asked about encouraging girls into these areas. The Government’s commitment is always to offering choice. These are incredibly important and exciting careers and I imagine many girls will be enthused by them, but our focus is on choice and for the young woman to decide, and I imagine the noble Baroness has some sympathy with that.
The noble Lord, Lord Mair, raised the importance of engineering. I thank the Royal Academy of Engineering for the work it is doing to encourage women into this field and the noble Lord for the examples he shared with the House: they really brought alive the range of opportunities in engineering. The noble Baroness, Lady Wilcox, raised the importance of careers advice for young women in schools and of being clear about routes into STEM careers. We are taking action on this in specific sectors. For example, we have been supporting the Tomorrow’s Engineers code, which is managed by EngineeringUK.
The noble Viscount, Lord Stansgate, raised the point about women returning to the workforce. We are funding a new returners programme to help women back into these industries. We are also launching a women-led high-growth enterprise task force to increase the number of women starting high-growth and cutting-edge businesses, which is one element of building the leadership pipeline that the right reverend Prelate the Bishop of London referred to.
Moving from education to health, the noble Baronesses, Lady Barker, Lady Watkins and Lady Thornton, raised the issue of the menopause. I reassure the House that the Government recognise that the menopause can be a challenging time for women, which is why we put women’s health at the top of the agenda as part of the first-ever Women’s Health Strategy for England.
I remind the House that the Department of Health and Social Care is implementing an ambitious programme of work with the NHS to improve menopause care so that all women can access the support that they need, which will in turn support women either to return to, or stay in, the workforce. Just last month, the Minister for Women announced that, from 1 April, women prescribed hormone replacement therapy will have access to a new scheme, enabling access to a year’s worth of menopause prescription items for the cost of two single prescription charges. This will give around 400,000 women across England better access to menopause support.
More broadly in the area of health, I thank the noble Baroness, Lady Finlay, for highlighting the remarkable work of Dame Cicely Saunders and the extraordinary role that women play, particularly in conflict zones.
The noble Baroness, Lady Miller of Chilthorne Domer, asked what the Government were doing to encourage breastfeeding. She will be aware that we are investing around £300 million in family hubs and Start for Life services. That includes £50 million for infant feeding services, which will allow appropriate support for mothers and their babies in their breastfeeding goals.
The noble Baroness, Lady Donaghy, asked for an update on our funding of maternity services. In 2022, we invested £127 million into the maternity system, which will go towards the maternity workforce and improving neonatal care. Of course, we keep that funding under review.
I think the House will join me in thanking my noble friend Lady Cumberlege for her work on patients harmed by different medicines and devices. She raised the issue of compensation and will be aware that the Department of Health and Social Care is seeking views from the Patient Safety Commissioner on what redress schemes for sodium valproate and pelvic mesh could look like. But I will again share her concerns with colleagues in that department.
I turn to tackling violence against women and girls. As my noble friend Lady Scott highlighted in her opening remarks, tackling violence against women and girls is a government priority. These crimes are deeply harmful, not just for those affected and their children but for society as a whole. To help end this scourge, we published a new Tackling Violence Against Women and Girls Strategy in 2021 to drive improvements, to target perpetrators more effectively and to support their victims. In March 2022, that was followed by the Tackling Domestic Abuse Plan, which commits to investing over £230 million of cross-government funding in tackling these terrible crimes. This money is for our work at home, but I thank the noble Baroness, Lady Anderson of Stoke-on-Trent, for highlighting the tragic deaths of so many women internationally, simply, as she said, for upholding their human rights. I also thank the noble Baroness, Lady Taylor of Stevenage, for her account of the life and important work of Lady Constance Lytton.
I also thank the noble Lord, Lord Mann, for raising the issue of the scale and harm caused by child sexual abuse. I recognise his picture of disclosure, maybe not in the capacity of canvassing, but I remember that when I worked in the City, nobody ever asked me about domestic abuse, but when I ran a domestic abuse charity, I could not get on a bus without somebody wanting to talk to me about domestic abuse. It is about giving people that ability, permission and safe place to disclose.
More broadly and internationally, the UK is also a global leader on tackling sexual violence in conflict. As my noble friend Lady Scott mentioned, the UK hosted the International Preventing Sexual Violence in Conflict Initiative Conference in London in November last year, which brought together partners, survivors and civil society organisations from more than 57 countries.
The noble Lord, Lord Brooke of Alverthorpe, expressed his deep concerns about the availability of pornography to children. As he will know from our Online Safety Bill, we expect companies to use age-verification technology designed to prevent children from accessing services that pose a high risk of harm, including online pornography, as a way of protecting them. The noble Lord will be aware that the Government made changes to the Bill in Committee to reinforce the safety of children online.
A number of your Lordships—the noble Baronesses, Lady Donaghy, Lady Barker, Lady Ludford and Lady Armstrong of Hill Top, and the noble Lords, Lord Hussain and Lord Loomba—spoke about our international work. The Government remain committed to returning to spending 0.7% of GNI on this budget when fiscal circumstances allow. The international women and girls strategy commits the FCDO to at least 80% of its bilateral aid programmes having a focus on gender equality by 2030.
The noble Baroness, Lady Armstrong, pressed me to comment on our work on women and girls in the strategy. In terms of both what we want to do and how we want to do it, the “what” focuses on education, empowering women, championing their health and rights, and ending violence towards women. However, by creating conversations that change the narrative, we also lead by example and through knowledge. I thank the noble Lord, Lord Loomba, for his work on widows, particularly in India.
The noble Lord, Lord Hussain, asked what the Government are doing to support Kashmiri women in prison. I am sure that he is aware that we engage with the Governments of both India and Pakistan, and raise our human rights concerns with them whenever we have those engagements. We are also working closely with civil society organisations and NGOs in both countries.
Women in Afghanistan was an issue raised by many noble Lords, including my noble friends Lord Shinkwin and Lady Fall, but my noble friend Lady Helic left me with a number of specific questions. I know that she is familiar with the two routes available to Afghan women—the Afghan citizens resettlement scheme and the Afghan relocations and assistance policy, which is obviously for staff who were previously employed locally. The Afghan citizens resettlement scheme will see up to 20,000 people from Afghanistan and the region resettled to the UK in the coming years and is not application based. Eligible people will be prioritised for resettlement.
On providing aid to women and girls in the region, the UK has disbursed £229 million in aid for Afghanistan since April 2022 and £515 million since April 2021. Our aid provides life-saving support in incredibly difficult circumstances, of which I know my noble friend Lady Helic is well aware. We are continuing to support the delivery of education and healthcare services, and to tackle gender-based violence.
My noble friend asked what work we were doing with allies around the world to influence the Taliban and promote gender equality. She will understand much better than I do the scale of that task, but we are working with the international community to press the Taliban to reverse its decisions and to honour the commitments that it has previously made. We do that through the G7, the G20 and the UN. Finally, on supporting long-term social change in Afghanistan, we have worked very hard and been instrumental in unlocking more than £1 billion of funding held within the Afghanistan reconstruction trust fund, supporting agriculture, education and health.
My noble friend Lady Fall asked about support for Ukrainian children in our schools. We are immensely proud of the support that we have provided to Ukrainian children and are honoured to do so. We have welcomed more than 20,000 children into our schools.
I hope the House will bear with me if I run just one minute over to do justice to your Lordships. In terms of women’s economic empowerment, the noble Lords, Lord Monks and Lord Watson, and the noble Baroness, Lady Chakrabarti, all raised issues of the gender pay gap, which has fallen significantly, with more than 2 million more women in work since 2010 and a higher percentage of women on FTSE 350 boards than ever before. The noble Baroness, Lady Chakrabarti, will be aware that we are obliged to carry out a review of the gender pay gap regulations after they have been in force for five years. That is something we are doing, and we will take time to consider and publish our views on the evidence.
More broadly, I thank all women across this House for their work in encouraging women into public life, particularly my noble friend Lady Jenkin, who has been remarkable in this area. The Government will continue to work across the House, and across both Chambers, to try to address the growing scourge of online abuse.
I will endeavour to write promptly on any of the points I have failed to cover today. It is truly a great privilege to have been able to close the debate. We have heard from women across the House who have found their voices and their place in the world, whether in business, politics, medicine, STEM, education or more. We have heard about the women who inspired us all. We have also heard about the women who lost their voices and their lives—and, all too often, at the hands of men.
I apologise for the weak tear ducts, but I close by remembering the women and girls who are currently being silenced all around the world, particularly in Iran and Afghanistan. We honour their courage; we are with them in spirit and solidarity. With those women in our minds and hearts, I commend the Motion to the House.