Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Maude of Horsham Excerpts

2nd reading
Wednesday 29th January 2025 Lords Chamber

[Lord Maude of Horsham (Con)]

My Lords, it is a great pleasure to follow my noble friend, and indeed the noble Earl, Lord Lytton, who is a neighbour of mine in Sussex. I had the pleasure of him being a constituent of mine, when I was a Member in the other place. He speaks with enormous authority on this subject. The issue around the multipliers, with which he dealt with great expertise and subtlety, is one of horrendous complexity, as he says, with many moving parts. I seem to recall that my noble friend Lord Waldegrave had at one stage the delight of being the Minister for Local Government and had to grapple with all these issues. I say to the current Minister that the Government would do very well to listen to the noble Earl, Lord Lytton, who speaks with such authority and credibility on this complicated topic.

I declare an interest. I would like to say that I am the provost of Brighton College—I like the ring of that—but I have to say, much more humbly, that I am the chair of governors of Brighton College, which is now the top performing co-educational school in the country. It is a charity, as most independent schools are, and it will suffer from the actions of this Government. I hope that Ministers will at some stage give up the fiction that this is about building up the maintained sector. As my noble friend rightly says, there is no hypothecation. There is no credible impact assessment of the effect of the removal of rates relief from educational charities of this kind. The amount of money that is purported to be raised—which is, I guess, very optimistic anyway—gets lost in the roundings of any Treasury arithmetic. We should be very clear, as my noble friend set out extremely eloquently, that this is not about building anything up but about pulling something down—something quite important that has a benefit for the country much wider than the benefit for those pupils fortunate enough to attend these schools.

My noble friend talked about, for example, the London Academy of Excellence. Brighton College was the principal driver of setting that up. It provides an extraordinary education for the most disadvantaged children from the most disadvantaged borough in the kingdom, and it would not have been done without the input, drive and innovation provided by independent schools, which are charities. That was part of the public benefit that charitable independent schools are rightly expected to provide, and while they continue to have charitable status they will continue to be expected to provide public benefit. But the “quid” for that very substantial “quo”—the public benefit—is being removed, not just through the removal of this business rates relief but through the imposition of VAT, as well as the much more widespread hit, as my noble friend says, of the increase in teachers’ pension contributions and the huge hike in employers’ national insurance contributions. It is not just a triple whammy for independent schools but a quadruple whammy, and that will have an effect.

It is not as though such schools are enriching anyone. They are, by definition, schools that are not for profit—that is what a charity is. I think of a school, lamentably little known but actually an incredible national treasure, called Christ’s Hospital. Again, I had the pleasure of representing it in my constituency of Horsham. It is an extraordinary school, completely unique, with a huge endowment greatly supported by the City of London Corporation and livery companies. It is genuinely needs blind. It selects children, but on the basis of those who come from the most disadvantaged families, as long as they meet a minimum ability standard. Those who need the help most are the ones admitted. Christ’s Hospital will be hit by this quadruple whammy. The public benefit is not just what a school such as Christ’s Hospital provides outside; it is manifest in what you might call its day job.

We should be very clear that this is not about building up maintained schools, which we all want to do and which has been done, as has been said, through an extraordinarily long-term consensual bipartisan approach, not just since the Blair Government but before then, which has had great results. The PISA rankings—which do matter—have risen remarkably in England. England has raced up the rankings, in stark contrast with Scotland and Wales, which have not had the same consensual and benign approach.

Such an approach is about creating difference and allowing innovation—allowing great leaders of schools, academies and free schools to innovate and create not so much competition as emulation, where other schools can see what can be done and can follow and build on that. It is the opposite of the bureaucratic approach of “uniformity must rule”; it is about saying that you can innovate and do things differently, and that that will benefit others as well. It is a great shame that that approach has been abandoned. It will do harm to children going to schools now and in the future, because the public benefit that comes from it will be diminished over time.

On the very day the Chancellor of the Exchequer has been expounding the benefits of economic growth and how important it is that we do everything to support it, it is important to make the point that independent schools are internationally renowned earners for this country, through young people from overseas coming to schools in the UK and through the growing number of schools overseas that take the names of great UK schools and are created in their image. There are clearly soft power benefits but also hard currency earnings. At a time when we are told that everything must be done to support growth, in this sector, where there has been growth, innovation, investment and excitement—not just obviously, or even mainly, in the independent sector but supported by the independent sector—the Government are talking the talk but walking in a different direction.

The Government would do well to think again on this. Much that this Government have done since they were elected in July has had the hallmark of not being well thought-through. We are all conscious of the law of unintended consequences, but a lot of the consequences that will flow from Clause 5 of the Bill are, I suspect, not wholly unintended, and are the more to be regretted for that.