Non-Domestic Rating (Multipliers and Private Schools) Bill

Debate between Lord Shipley and Lord Weir of Ballyholme

Report stage
Tuesday 18th March 2025 Lords Chamber

[Lord Shipley (LD)]

My Lords, I agree with both amendments in this group. If you believe in “education, education, education”, you should not tax independent schools in the way that the Government have decided they want to. The Government have argued that taxing independent schools will increase the number of teachers in state schools, but the Government’s own figures show that they reached only 62% of their postgraduate secondary ITT recruitment target in 2024, so there will be pressure to increase the pay of existing teachers rather than to appoint new ones. In any case, most of the extra £1.5 billion estimated to come per year from this clause will go on special educational needs.

I suggest, very much in line with Amendment 25 from the noble Lord, Lord Lexden, that the Government’s priority should be to cut the backlog in assessments for education, health and care plans, rather than taxing parents who want the best for their child with special needs and think it can be delivered only in the independent sector. There is a very basic issue of principle here: the right of a parent to opt out of a state system where they believe their child would benefit from that. When they have paid their share of general taxation and foregone a place in the state system, thus saving the state money, then paid additionally for their child’s schooling, I submit that it is wrong in principle to tax them yet again for that decision to send their child to an independent school.

I have concluded that Clause 5 is a distraction. It will fail to deliver the Government’s ambitions for the state sector, and it is better for our education system as a whole to remove Clause 5.

[Lord Weir of Ballyholme (DUP)]

My Lords, again, I support the amendments in this group. Perhaps I should clarify for the Minister that I do so, to paraphrase something said in a different context, on the basis of being without a directly selfish economic or strategic interest in the issue. Let me highlight why I say that, in coming from a background of education in Northern Ireland.

This provision does not affect Northern Ireland, as the Minister rightly pointed out; it is an English-only matter, because all these aspects are devolved issues. Consequently, from that point of view, it will not impact on any of my former constituents in that regard, nor indeed on Northern Ireland. We have a strange patchwork of school types across the United Kingdom in our delivery of education. Northern Ireland’s background is largely one in which the independent sector is extremely small. Indeed, you could make an argument, particularly at post-primary level, that on the definition of what most people would regard as independent schools, there is perhaps one independent school in Northern Ireland that is directly akin to those in England.

I am trying to look at this as objectively as possible, but from that point of view there are three main reasons why these amendments need to be supported. First, the prospect of imposing additional burdens and taxation on schools sits deeply uncomfortably with me. The idea of penalising parents by saying, “Because of the educational choice that you are making, we are going to single out your schools for an additional financial burden to tax education” is fundamentally wrong.

Secondly, there is at least a perception—I am sure the Government would deny it—that this is a highly ideologically driven proposal and part of a wider set of seeming attacks on independent schools, as seen particularly by the changes in VAT. As such, there is a concern that, rather than looking at what is of educational benefit, this is some red meat being thrown out to some ideological Labour supporters. It is an easy target to go after.

The third reason is that of unintended consequences. We are asked to look at different figures and projections as to the impact that these various changes will make. As I highlighted in the previous group, this is perhaps a less significant change than the changes to VAT, but again, it will have a level of tipping impact and lead to the closure of schools. This is not mere theory.

If I may draw on an example of relatively recent history in Northern Ireland, roughly 12 years ago, the then Minister of Education, who was a member of Sinn Féin, made changes to a level of funding that was available to preparatory schools in Northern Ireland. In those circumstances, the vast majority of fees were paid by parents and the schools were largely supported directly by them; it was at least 70%-plus. The state paid a small proportion of what would normally go to support children in state schools. There was a significant cut made to that. It was not completely wiped off the face of it, for the reason that the then Minister would have had to bring it to get executive approval had it done so. The arguments used were that it was some sort of financial benefit, which could then be ploughed back into state education, so it was an egalitarian move.

What was the ultimate impact of that? For many of those schools which were already under a level of financial burden, it became the final nail in their financial coffin, with the end result that, 12 years on, the number of prep schools in Northern Ireland has gone down by just over a third and the number of pupils going to those prep schools is down by more than 40%. That single move made a number of those schools unsustainable.