Independent Schools: VAT Exemption

Lord Roberts of Belgravia Excerpts

Thursday 5th September 2024 Lords Chamber

[Lord Roberts of Belgravia (Con)]

My Lords, unlike my noble friend Lord Taylor, I had a terrible time at my public school and was expelled—or, more accurately, I was asked to leave and not come back—so I cannot be accused of being parti pris in this in saying that I support public schools.

There is one iron law in politics and history—namely, the law of unintended consequences. As Winston Churchill said in his eulogy for Neville Chamberlain,

“we are so often mocked by the failure of our hopes and the upsetting of our calculations”.

As the noble Lord, Lord Lexden, and several other speakers in the debate have pointed out, the present proposal is suffused with the dangers of unintended consequences. The Government want public schools to become less elitist and exclusive, but as it will be the less financially secure schools that will have to shrink, and maybe in some cases close, that will leave the rest of the independent sector more elitist and exclusive.

The Government say that they are prioritising economic growth, but they will effectively let parents keep about £400,000 of post-tax income per child, if they take their children away. Studies show that many parents will reduce their work hours, retire earlier than planned or leave the workforce entirely, with serious effects on the economy and the public finances. The Government say that they welcome the huge amount of philanthropic work that public schools do in their local communities, but that will understandably be among the first things to go when schools have to draw in their horns financially to keep school fees down.

The Government want more working-class children to go to Oxbridge, but if middle-class parents have to withdraw their children from public schools and send them into the state system while tutoring them privately, the likelihood is that Oxbridge will become more middle class rather than less. The Government are committed to fighting bullying in state schools, but this measure is likely to unleash more bullying, based on class prejudice against middle-class children who join state schools half way through the school year.

The Government say they want lower class sizes, but this measure will probably raise class sizes in state schools, especially if the new teachers cannot be hired on the expected VAT, which will not be forthcoming if parents withdraw their children from public schools in significant numbers. The Government say that they want to encourage educational charities, yet they are setting a hugely dangerous precedent in taxing them, and it is hard to escape the conclusion that they are doing this for a tribal shibboleth, more for ideological than for practical reasons.

This measure unfairly penalises those incredibly useful people in our society—parents who pay for education twice, once through their taxes for other people’s children, and once in school fees for their own. Instead of spending their money on luxuries, they invest it in their children’s education. This is therefore essentially a tax on those parental sacrifices, and one that comes fraught with myriad unintended consequences.