Independent Schools: VAT

Lord Davies of Brixton Excerpts

Thursday 17th October 2024 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, I have two points for my noble friend the Minister by way of background to this debate. Does she agree that it is not just those parents who pay for their children’s schooling who care about their children’s education? Also, we all must pay our fair share of taxation—some taxes on our incomes, some on our expenditure through VAT. We pay our taxes not as a fee for service but as part of our commitment to society as a whole.

Independent Schools: VAT Exemption

Lord Davies of Brixton Excerpts

Thursday 5th September 2024 Lords Chamber

[Lord Davies of Brixton (Lab)]

My Lords, I thank the noble Lord, Lord Lexden, for introducing this debate. No one doubts the strength of his feeling on the issue. I suspect that much of his speech overrated the problems that the private sector will face, and my view is that it will survive, but he quite rightly raised a number of practical issues towards the end of his speech which I am sure my noble friend Lady Smith of Malvern will address in her reply. I take the opportunity to welcome her to her place.

I speak as a parent but also as someone who had experience running a public education service, and that drives my view of the necessity for this measure. Of course, the actual discussion will take place when we get the finance Bill, when we will doubtless have this debate again, but it is entirely appropriate that we should discuss it now.

I want to stress that VAT is a tax—no surprise there, but there is a big debate within the public expenditure discussions about the appropriate balance between income taxes and expenditure taxes. There are those who believe that there should be a greater reliance on expenditure taxes. That is an issue, but it means that they are both providing the same function; they are both providing public revenue to provide public services. It is worth stressing that taxes are paid not as a fee for a service but as an individual commitment to society as a whole. It is no more reasonable for those who choose to spend their money on sending their children to private school to have a VAT rebate than for people to expect to get an income tax rebate.

The basic fact about this proposal is that it was in the manifesto. It was not hidden or avoided during the election campaign, and this party was elected with a commitment to implement it. Practical issues were raised, and I hope my noble friend will address them.

I have taken the opportunity to read all the submissions that were sent to me. There was a large number and I cannot claim to have read every last one or through each one entirely—there was a certain amount of copying and pasting—but I got a sense of the expressions of concern that were being made, almost entirely by parents. The issues on which I hope my noble friend will be able to provide some comfort are, first of all, children with special needs and, possibly to a lesser extent, military families.

I want to conclude with a point that makes me angry—so far none of the speakers against this proposal has made the fatal mistake of making this point—and that is the idea that parents who choose to send their children to private school care more about their children than those of us who choose to send our children to state schools. The last Prime Minister made that classic mistake, in answer to Questions in the House of Commons, so noble Lords should not dismiss it. I hope no speaker in this debate will give that idea a scintilla of justification.

--- Later in debate ---

[Lord Forsyth of Drumlean (Con)]

My Lords, I have only four minutes so I will sum up my view of this policy in three words: wicked, stupid and cruel. I have spent the summer receiving emails from vast numbers of parents. The noble Lord, Lord Davies, told us he had not had time to read all of them. If he had done so, he would be heartbroken.

[Lord Davies of Brixton (Lab)]

My Lords—

[Lord Forsyth of Drumlean (Con)]

I am not going to give way—he would not give way to me.

These are lone parents, single parents perhaps struggling with two jobs in order to pay. They are people who put themselves in danger to defend our country in the armed services. They are parents struggling with children with severe learning difficulties. Who in this Chamber can defend the idea of sending a child who suffers with autism to a completely different environment halfway through term? Anyone who knows anything about autism will know that that would be a cruel and disgraceful thing to do. That is the consequence of this policy.

The messages are coming from health workers, teachers and small businesses, people who are struggling to pay those bills. The noble Lord, Lord Foulkes, is not in his place but he told me he was not going to listen to what I had to say because he has seen people turning up in their Range Rovers to schools. The people I am talking about do not have summer holidays and run old cars to scrimp and save to do their best for their child in their circumstances.

By the way, every single one of these parents is saving taxpayers money. For the noble Baroness to suggest that this was a tax break—it is not one unless you take the view that education should be taxed. What has happened to the Labour Party that set up the Workers’ Education Association and founded the Open University? The Labour Party was elected in 1997 on “Education, education, education” and has now become the party of “Taxation, taxation, taxation”.

I agree that state schools need more resources, but look at the impact that this is going to have on those schools half way through the school year. I guess Emily Thornberry did not get to be Foreign Secretary because she let the cat out of the bag. She said, “It’s fine: if we have larger classes, we have larger classes”. “Let them eat cake”—she did not add. One in four children in Edinburgh go to independent schools. How on earth will state schools be able to cope with people who are no longer able to pay the cost?

I confess that I have not always been a huge fan of the ECHR, but I hope that those people with the resources will put their hands in their pockets and help my noble friend Lord Lexden and others to take this Government to court over this issue, and that the Government will realise that their time is nigh. As for the idea that this will save money—the Government have come up with at least three figures, all reducing in number—they need to read the wonderful analysis by the noble Lord, Lord Hacking, on their own Benches, as to how it will end up costing more than it will save.

I have a suggestion to make to the Government. I know they have made a silly manifesto commitment, and I know they feel that they have to do something, but they should at least take some time and not do this half way through the school year. If that is what they are determined to do, they could perhaps meet their requirement to put VAT at 5% rather than 20%, as we do on heating charges, and phase it in over a reasonable period of time. I fear that this is an ideologically driven policy of the kind that the Prime Minister showed during the election, when he was asked, “If one of your family were desperately ill, would you ever use private healthcare?” and he said no. We do not want that kind of politics in this country.