Independent Schools: VAT Exemption

Baroness Butler-Sloss Excerpts

Thursday 5th September 2024 Lords Chamber

[Baroness Butler-Sloss (CB)]

My Lords, I declare my interest that I went to an independent school, as did my children. I must say, like many others have said so far today, that doing that spent all our money. We did not take foreign holidays and things like that, but it was worth it.

I strongly support what the noble Lord, Lord Hacking, said, as well as many other speakers. The Government have not looked across the independent sector; they have concentrated on the great schools. As has been said, the great schools will survive, probably largely because of foreign pupils.

I have had a lot of experience of small independent schools, right across the country, and I have had—like everyone else here, I am sure—endless emails from parents from small independent schools, many of which are likely to close. They are often local, and parents have put their children in them for very good reasons. One example I read was of a nine year-old autistic boy who is extremely clever. In the state sector, he was absolutely hopeless. He was removed and sent to a small independent school, where he was cherished. That sort of child may well cope in ordinary school if he has sufficient help, which this child did not have.

I also have a personal experience. One of my grandsons is profoundly deaf. He is American, and he went to an independent school in Los Angeles because he could not cope with a lot of noise and had to sit at the front of the class to be sure to hear what was going on. I am sure that similarly profoundly deaf children in this country going through ordinary education would not necessarily have a very good time.

I have to say that I am very concerned for the people on modest incomes—many of your Lordships have already been talking about modest incomes—who are still taking the trouble to spend money on education rather than on holidays and other things. That is what is being attacked here with this proposal.

As I said, many small schools are almost certain to close. What on earth will the effect be if, in the middle of the academic year, a considerable number of children have to go into the state sector? We know that many schools in the state sector are overfull already, and the teachers will not be there because the money has not yet been raised. I am particularly concerned with pupils in their GCSE and A-level years; nobody has yet spoken particularly about those two groups. How on earth will they go into the state system with probably a completely different programme, working in a state where they absolutely will not be able to cope with what is going to happen? If they do not look at anything else, the Government must look at January. Finally, I ask them to please look at SEND, at special schools for other needs and at military schools.

--- Later in debate ---

[Baroness Smith of Malvern (Lab)]

My noble friend is right, and I am very proud of that. Our position, as I said, has been tested in the legal advice in the consideration of these changes. Our view is that being charged at the standard rate of VAT paid by millions of businesses across the UK is not discriminatory and is clearly proportionate to the objective of better funding for state schools. To the extent that I am able, I will certainly ensure that I write further about that issue to my noble friend and to others.

[Baroness Butler-Sloss (CB)]

May I ask the Minster, before she sits down, about the children taking GCSEs and A-levels? What are the Government going to do to help them where there will be changes in the programmes they are doing?

[Baroness Smith of Malvern (Lab)]

I apologise to the noble and learned Baroness: with respect, I was showing my inexperience in this House and asking my Whip about the situation. If the House will allow, could the noble and learned Baroness repeat her question?

[Baroness Butler-Sloss (CB)]

I was asking about children taking GCSEs and A-levels when this starts in January.

[Baroness Smith of Malvern (Lab)]

I think I covered that point in talking about the arguments for introducing this in January, while also making it clear that it is the Government’s view that introducing the VAT liability does not necessarily imply that a sudden increase in bills will arise; nor does it imply that the whole of that increase in VAT will be passed on in fees. In fact, if we look at the behaviour in the private school sector, we see that, despite very large increases in fees—well above inflation—parents have tended, where they have made that choice, to keep their children in the private sector anyway, and I am sure that the vast majority of parents will continue to do that. The analysis, including that carried out by the Institute for Fiscal Studies, suggests that, even if there is going to be a movement of pupils away from the private sector, that will tend to be not immediately in January but over a much longer period, and I imagine that will be the approach that most parents take.