Inheritance Tax, National Insurance and VAT

Lord Kempsell Excerpts

Monday 27th January 2025 Lords Chamber

[Lord Kempsell (Con)]

My Lords, I too thank the noble Lord, Lord Morrow, for securing this important and timely debate. Given the time constraints, I intend to confine my comments to the impact of VAT on independent schools in the nations and regions.

I suppose I could not do any better than to associate myself with the noble Lord’s introduction to this Question for Short Debate, because he adumbrated so brilliantly the unintended consequences that Ministers have unleashed with this nonsensical and ill-formed policy. I think that the Government thought they were targeting a certain class demographic and a certain income demographic with their decision to impose VAT on independent school fees, but in fact they have unleashed a mess of unintended consequences across the country.

One that I have been focusing on is the impact of this decision on Armed Forces families, who have been particularly badly hit. Many of them have to send their children to boarding schools so that they are available to be active on operations. They are, of course, based across the whole of the United Kingdom and abroad. I thank Ministers for their concessions on that issue at the Budget, although there is more to be done.

Let me focus the attention of your Lordships’ House on just where this impact is being felt most. It is across the nations and regions, because there have been school closures in the south-east, the West Midlands, the east of England, Scotland—all over the country. The disproportionate degree of closures of independent schools that we see in rural and semi-rural areas is another example of the ill-thought-out consequences of this policy. When the Minister sums up, will he assess that and allow us to have an understanding of the Government’s thoughts on the disproportionate impact across the nations and regions of the decision to impose VAT on independent school fees?