Independent Schools: VAT Exemption

Lord Lucas Excerpts

Thursday 5th September 2024 Lords Chamber

[Lord Lucas (Con)]

My Lords, I declare interests as proprietor of the Good Schools Guide and having sent my children to both state and independent schools. I do not think taxing education is right, but we do. If I spend £20,000 on holidays, I will pay £3,333 in VAT. If I spend that same amount on schooling, I will forgo twice the value of that, and the state will benefit by twice the amount for the cost of schooling that it would have incurred otherwise. In putting VAT on these parents, we are not making tax fair: we are taking people who are already taxed at twice the rate of other people and taxing them at three times the rate. It will not hurt the rich; it will hurt the people who are struggling to afford the fees as they are. As I know from my work at the Good Schools Guide and through correspondence in this House, most of them are people who, one way or another, have found that the state will not educate their children in a way that they need. As the noble Lord, Lord Addington, said, a lot of this is due to special needs: a lot of the education is not provided through education, health and care plans but just as part of ordinary education.

This is a tax that is focused on people whom we ought to value and not punish. I do not believe that it will raise the money that it said it will either. There are too many leaks. There are families where the local state system cannot provide local schooling, where they will have to ship them 10 miles or so. You might think that 10 miles is fine, but it has to be by taxi—and 200 days a year of taxis, morning and afternoon, costs 10,000 or 20,000 quid, depending on the state of traffic. There will be parents who opt out of working so hard if their children go state. There will be all sorts of leaks. I really hope that the Government will commit to making a clear evaluation of the effectiveness of this policy and whether it actually raises money.

What I am most concerned about is the merciless decision to put VAT on in January, to force children to move schools mid-year, in the middle of exam years, when there is no chance to negotiate proper provision for SEN; healthcare workers who need to find a way to be able to work the hours they are asked to and cannot turn up at 3.30 pm to pick up their kids from school; and the number of letters I have received from members of our Armed Forces. They are not well paid. It is astonishing that we should treat people who dedicate their lives to our safety in this way, and I find it astonishing, given the years I have been here and the respect I have for the party opposite, that it should contemplate treating children with such cruelty. It really is not in the blood of the Labour Party that I know. I really hope that the Government will think again and make the start date next September.

When approaching the question of the educational divide, I hope this will one day be for the Labour Party a matter of hope not hate. There is so much that the independent sector could do—is doing—for children who need particular help. For instance, there are schools that take on children in care, and there are many other things that could be done by the independent sector, if the Labour Party would only harness its power rather than trying to stamp on it. I think we would all gain.