Independent Schools: VAT and Business Rates Exemptions

Bradley Thomas Excerpts

Tuesday 8th October 2024 Westminster Hall

[Bradley Thomas (Bromsgrove) (Con)]

I beg to move,

That this House has considered the removal of VAT and business rates exemptions for independent schools.

It is a pleasure to serve under your chairmanship, Dame Caroline. This debate matters for various reasons. I have always been and will remain committed to supporting education across the board, including our excellent state schools. I want all schools to be adequately funded to present opportunities for children from all backgrounds. I say that as someone who was proudly educated in state schools and who cares about the life chances of everyone.

I have secured this specific debate to highlight how Labour’s ideologically driven plan to remove VAT and business rate exemptions for independent schools is an inherently flawed policy. If Labour will not abandon the education tax I will also suggest some improvements that the Government could make to lessen the impact of the policy on pupils, parents and school staff in Bromsgrove and across the country.

[Dame Caroline Dinenage (in the Chair)]

Order. We seem to have a problem with the sound—it seems to be everybody’s microphones. I encourage the hon. Gentleman to plough on while we see whether we can change a few plugs and get it rolling again. In case he was put off by the tinny quality of the sound, we are trying to get it rectified. Please plough on.

[Bradley Thomas]

Thank you, Dame Caroline. Education is an investment in our future. It is in everyone’s best interests that children are well educated so that they can make an engaged and positive contribution to our society. We do not charge VAT on many types of private healthcare, as that is beneficial when people use their own money to pay for a service that the state would otherwise provide. We do not charge VAT on university or nursery fees, so why should schooling be any different?

There are approximately 2,500 independent schools in the UK educating more than half a million children. They are often small schools: more than 40% of independent schools have fewer than 100 pupils according to Department for Education data. The reality is that the policy will not fulfil its aims and will displace children mid-education. State education must be funded by the state, supported by taxpayers. The VAT exemption encourages greater use of independent education, reducing the number of state school pupils, meaning more money available per pupil in the state sector.

The Times recently stated that 71% of parents felt that rising school fees would influence their future decision about independent schooling. Additionally, 26% of parents said they would have to withdraw their children from independent schools if VAT is introduced.

An Adam Smith Institute report provides a detailed examination of the potential economic impacts. If 10% to 15% of students transfer, the net revenue could be negligible. Alarmingly, in a scenario where 25% of students switch from the independent sector to state schools, the tax could cost the Government £1.6 billion.

Currently, independent schools’ significant economic benefits include supporting 328,000 jobs, saving £4.4 billion from the education budget, and supporting £5.1 billion in additional tax revenue. They do this while saving the state £4.5 billion by removing the requirement to fund the education of 7% of children as the result of parents exercising this choice. Furthermore, independent and state boarding schools are a unique subset of the schools system, with the additional feature of attracting overseas students to the UK. Some 62,700 pupils are international students in independent schools, making up 11% of the population. This is a key export for the country, adding £2.1 billion to our economy annually.

[Rachael Maskell (York Central) (Lab/Co-op)]

Will the hon. Member give way?

[Bradley Thomas]

I will not give way. Independent schools should be seen as a British success story, both culturally and economically, instead of being discouraged and punished with the imposition of an education tax for socialist ideological principles. Most importantly, the human impact of the policy is stark. The failure of this education tax will not just be academic or financial; it will have a serious impact on families.

One parent wrote to me:

“As a widowed single mother who works full-time, I make enormous financial sacrifices to ensure my child can attend the same school from age 3 to 18. This stability is not only essential for my child’s development but also enables me to work and contribute to society. This proposed VAT would be devastating for families like mine.”

Another mother wrote to me and said,

“We also have a daughter who will need to start secondary school in two years. We had hoped for her to attend the same school as her brother but, with no scholarship likely and the addition of VAT, it is simply impossible. This is a painful realisation, and I worry that she will resent the opportunities that we couldn’t give her (but we could give her older sibling).”

We have yet to talk about the impact on special educational needs and disabilities education. This measure will cause particular problems for children who are in receipt of such bespoke education. Nationally, at least 130,000 pupils in independent schools receive SEND support in mainstream and specialist settings. That is 20% of the pupils in UK independent schools, which is slightly higher than the state school average. Independent schools help to provide additional value-adding capacity to SEND education.

[Priti Patel (Witham) (Con)]

I congratulate my hon. Friend on securing this important debate. On special educational needs, this measure will devastate many families around the country who make huge sacrifices. When the Minister sums up, will he tell us what mitigations and support will be given to local authorities to cover the cost and the pressures they face, particularly with shortages in special educational needs provision across the country?

--- Later in debate ---

[Bradley Thomas]

My right hon. Friend makes a valid point, which I will touch on later, and I hope the Minister will address it. Independent schools provide additional value-adding capacity to SEND education, as has been acknowledged, and VAT on fees risks their ability to do that. There is simply not the capacity in the state sector to accommodate all those extra pupils, particularly when SEND services are already under pressure.

[Christine Jardine (Edinburgh West) (LD)]

I congratulate the hon. Member on securing this important debate. My city of Edinburgh has the highest proportion of independently educated children in the country, at between 20% and 30% every year. According to the local Labour authority, 16 schools will already be over capacity at the end of this year. If the predicted percentage of children drop out of independent education into the state sector, it will not be able to cope. Does the hon. Gentleman agree that this measure is ill thought-through and that the Labour Government must come up with a way to support education, particularly as the matter is devolved in Scotland and VAT is reserved?

[Bradley Thomas]

I agree with the hon. Member. The examples she cites highlight the situation perfectly. The Government have failed to consider that the capacity is not there. We have already seen, in the few months since this Parliament began, several debates highlighting issues of SEND capacity.

Another mother wrote to me to outline the benefit that independent schools can have for children with SEND needs:

“We moved our autistic child to a small independent school and the transformation was immediate. Classes are small and quiet, and the school is very nurturing and family oriented. It has been wonderful to see her blossom and slowly get more and more involved in school life. We would not have chosen for our daughter to go to private school but there was no suitable state provision available. We are paying a significant amount of money to be able to do this. Adding VAT on top feels like we are being punished twice for having a child that doesn’t fit into the state system, either in mainstream or specialist schools.”

[Mims Davies (East Grinstead and Uckfield) (Con)]

Nobody here is not interested in a positive educational experience for all children in all our constituencies, in all establishments. My own youngsters have enjoyed brilliant learning in both private and state schools, while one is currently in an independent school. Would my hon. Friend agree that the heart of this policy of bringing in taxation on education is stoking division, creating harm to aspiration, and stopping the sharing of facilities and opportunity? It is exemplified by the Education Secretary’s proclamation on social media. Despite the impact on jobs and community harm, the Government still want to introduce this policy.

[Bradley Thomas]

I wholeheartedly agree with my hon. Friend. The comments made by the Education Secretary on Twitter over the weekend epitomise the way in which the mask of this Government is slipping—socialism is revealing its true face—and how reprehensible the policy is.

Adjacent to SEND schools, we must consider faith education. This education tax will make independent faith schooling unaffordable for many families, hurting the 370,000 pupils who attend independent faith schools in England according to Department for Education figures. It is important that the House notes that fees at those schools are frequently below the independent school average, and sometimes below state per-pupil funding levels. Often the schools have a suggested fee, but the community supports those who cannot afford the full fee by themselves.

[Ayoub Khan (Birmingham Perry Barr) (Ind)]

I congratulate the hon. Member on securing this debate. In Birmingham Perry Barr there is an all-girls faith school where parents earning just above minimum wage secure places for their children. We already have an enormous problem in the constituency with the secondary school sector, where waiting lists are somewhere in the region of 100 places. Does the hon. Member agree that not only does it not stack up financially but we simply have not got the infrastructure to deal with this policy?

[Bradley Thomas]

I agree wholeheartedly with the hon. Member. We have yet to talk about military and diplomatic families, who need boarding schools to provide a stable education while parents are deployed overseas; 4,700 children are funded by the Government under the continuity of education allowance, which assists service personnel and diplomatic families in educating their children at boarding school.

[Dame Harriett Baldwin (West Worcestershire) (Con)]

I congratulate my hon. Friend on securing this important debate. The Government say that they are pursuing economic growth. In his excellent speech I hope that my hon. Friend will highlight the value of export earnings to the United Kingdom from the fantastic independent school sector, which is a key part of growth. No other western economy taxes education.

[Bradley Thomas]

My right hon. Friend echoes the point that I made earlier that this is about not just a service that is provided but a key segment of the UK economy that bolsters the value of UK plc and UK GDP.

[Rachael Maskell]

Will the hon. Member give way?

[Bradley Thomas]

I will not; I will make progress. Labour committed in the House of Commons in 2023 that armed forces families need not be concerned about proposals to charge VAT. With the current retention crisis in the armed forces, and the current volatile state of world affairs, the Government need to confirm what impact analysis has been carried out on the effect of taxing education on military personnel.

We then get into issues around the implementation of the policy. Implementation in January will put pressure on local authorities to find rare and academically disruptive in-year placements. Those will be difficult, as state schools will be full and many will be oversubscribed, with areas that have a high number of pupils attending independent schools having some of the busiest state schools.

[Richard Fuller (North Bedfordshire) (Con)]

My hon. Friend is speaking eloquently about the impact on children’s education, on children with special educational needs and on children being ripped out of their schools, perhaps in the year of their GCSEs or A-levels. This is obviously a debate about education. There are Members of Parliament in the Chamber from the Conservative party and the Liberal Democrats, as well as independent MPs and Members from Reform—

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[Richard Fuller]

It is not always about the hon. Member for Strangford (Jim Shannon). The Labour party has marshalled all but two of their MPs, one of whom hates the policy—I do not know what the other thinks.

Does my hon. Friend the Member for Bromsgrove (Bradley Thomas) think that it is shocking that not a single member of the Education ministerial team of the Labour Government has bothered to show up today, yet they continue to use the airwaves to spew out spiteful and divisive messages about this Labour policy? The Minister present, the hon. Member for Ealing North (James Murray), does not care about education; he cares about money—he is a Treasury Minister. He knows that the policy will not raise any money, but it is going to cost taxpayers.

[Bradley Thomas]

I agree wholeheartedly with my hon. Friend. The Government have shown the true intent of the policy over the weekend with the divisive, “us and them” mentality that was revealed on social media.

I call on the Government to pause and reconsider this education tax, with a view to abandoning it. It is unethical and will damage a British success story. It will not fulfil its stated aims. The policy will not raise significant money, but is being forced through at the expense of state and independent schoolchildren to further the Government’s divisive ideological agenda that so many in this House have recognised.

If the Government refuse to abandon the policy, there are some sensible and practical steps that they can take to minimise the impact that it will have on parents and children. First, delay the imposition of VAT until September and the start of the next academic year. There has been no proper impact assessment of these policies on state schools, SEND provision or faith schooling; a full consultation and impact assessment is needed before changes are announced. Secondly, assess how very small schools can be protected from VAT and tax changes. They are a vital community resource and charge much lower fees; that should be acknowledged. Thirdly, exempt service families on continuity of education allowance from VAT. Those who rely on independent education to serve our country should absolutely not be penalised. Furthermore, the Government should protect children currently applying for an education, health and care plan, as parents should not be penalised for the delays in the process.

I would like the Minister to provide clarity on the following points. Will the Government be issuing guidance for state schools on how to deal with applications from parents, to prevent parents from being asked to prove that they cannot afford to fund independent education? During the general election campaign, the right hon. Member for Islington South and Finsbury (Emily Thornberry) commented that state sector classes must increase and that they will just have to cope. What assessment have the Government done to determine whether state sector classes have the resources available?

When it comes to students transitioning from the independent to the state sector, what provision will there be to prevent disruption to their education in subjects that may not be taught at their new state schools? In the event of academic performance failures due to the disruption caused by transitioning between schools, will academic leniency be granted to students? I also seek clarity on what funding and support will be made available for students with special educational needs who are transitioning between the independent and state sectors.

I hope that the House will clearly appreciate that this short-sighted policy will hit hardest those in society who it claims to be supporting, that it will damage the wider education sector as a whole, and that it will worsen academic and social inequalities while being a net cost to society, the education sector and the British taxpayer.

[Several hon. Members rose—]

--- Later in debate ---

[Bradley Thomas]

I thank every single Member who has spoken today in this debate, and I particularly thank the families in attendance who are affected by this policy. We have heard Members talk about the concerns of the impact of the policy on capacity, SEND and simply the element of choice, as well as human stories of how this policy will impact many families and children across the country. I am disappointed that an Education Minister has not attended and instead a Treasury Minister has. The Minister has demonstrated that he can read Labour’s political script but has sadly lacked the courage to answer the points that have been raised in this Chamber.

To sum up, we have heard words such as “cruel”, “sacrifice” and “disruptive”, as well as concerns from families that their children’s performance will suffer in schools. In short, this is a joyless, mean-spirited policy from a joyless, mean-spirited Government, and I think it is evident from the lack of Labour Members present that they probably agree with the sentiments expressed on this side of the Chamber.

Motion lapsed (Standing Order No. 10(6)).

Winter Fuel Payment

Bradley Thomas Excerpts

Tuesday 10th September 2024 Commons Chamber

[Stuart Anderson (South Shropshire) (Con)]

I am sure Labour Members never thought in the general election campaign that they would be giving pensioners the choice between heating and eating. Many Labour Members have not even bothered to turn up for a debate on something so critical for many pensioners across this country. We have talked about choices, and this is all about choices. The Government have made a political choice. Labour Members will all have to make a choice, and face their constituents whether they vote for or against. I urge them not to cut the winter fuel allowance.

Let me go on a journey and set out the narrative. The Government say there is a debt and imagine there is a black hole they have to fill, so let us have a look at the numbers. They say they have to find £22 billion, so let us cut £1.1 billion but in the same breath add £9 billion for the pensions. At the same time, the red herring that is the Great British Energy flop adds another £8.4 billion. That is a decision that the Government have made, but why would the Labour party let numbers get in the way of a good story? The numbers show the Government have no issue making decisions against pensioners.

I am a proud veteran. In November, on Remembrance Day, we ask people to remember those who paid the ultimate sacrifice in the service of their country. I challenge Labour Members to look at pensioners who have served and say, “We will never forget,” because those pensioners have already been forgotten.

[Bradley Thomas (Bromsgrove) (Con)]

In the spirit of what my hon. Friend describes, I will cite the example of Betty Webb, a constituent of mine who received an MBE for her work as a codebreaker at Bletchley Park. She is 101 years old. She is a widow who lives alone. She is living in fear not just that the Government will take away the winter fuel allowance, but that in future they will snatch away the 25% single person’s discount on council tax. Many other constituents of mine are fearful of the same thing.

[Stuart Anderson]

My hon. Friend makes a great point. Pensioners, including those who have given a life of service to this country, are living in fear of what is coming next. Almost a third of residents in South Shropshire are pensioners, and they have been writing to me and they are absolutely livid. They feel like they have been led down the garden path—taking away this payment was not what was promised. It is cruel, heartless and callous. This policy needs to change.

The Chancellor has made a rookie error. She has gone into the Treasury and, with everything in front of her, said, “Do this,” and she has removed the personal view. She has made a political decision—[Interruption.] Of course it is a rookie error. This is a massive error. She has listened and removed people from the equation. When people are removed from politics, it is a road to nowhere. Will the Chancellor go and see the Downing Street chief of staff and ask for permission to reverse this proposal?

Economy, Welfare and Public Services

Bradley Thomas Excerpts

Monday 22nd July 2024 Commons Chamber

[Bradley Thomas (Bromsgrove) (Con)]

Thank you, Madam Deputy Speaker, for allowing me to make my maiden speech here in the mother of Parliaments, a global beacon of representative democracy. I congratulate the hon. Member for Peckham (Miatta Fahnbulleh) on her election and on making her inaugural contribution in this House.

I am humbled to serve the people of Bromsgrove and the villages in my home county. I have some esteemed and worthy predecessors, most recently Sir Sajid Javid. He was the first ethnic minority Member of Parliament to become a Secretary of State, and went on to hold not one but two of the great offices of state, serving as Home Secretary and Chancellor of the Exchequer. Sir Sajid is a man whose north star is his integrity, and he has devoted much of his time to supporting and championing good and noble causes, including, as many in this House know, suicide prevention.

Bromsgrove constituency is, for the unfamiliar, in Worcestershire. Bromsgrove town, its namesake, is proud of its history and traditions, which include a historic court leet centred around the parade on fair day, held on the closest Saturday to midsummer and in celebration of the 1199 charter granted to the town by King John. This heritage goes further, and Bromsgrove’s proud sons and daughters include the poet and scholar A. E. Housman and his sister Clemence, who I could not fail to mention here in this House, given the role that she played in the suffrage movement.

My constituency, however, is much broader than just one town. There are many more villages and hamlets and, being 79% rural, Bromsgrove epitomises the very best of Worcestershire. There are rolling hills and thriving villages where the community spirit is strong, including Clent, Dodford, Stoke Prior, Belbroughton, Romsley, Finstall, Barnt Green, Cofton Hackett, Tardebigge and Alvechurch. There are other communities on the fringe of the constituency whose identities are rooted proudly in Worcestershire, including Hagley, Rubery, Wythall, Major’s Green—and there is even a touch of glamour in Hollywood. I commit myself to representing them all. Our villages are home to rural enterprises, and to farmers who we all rely on three times a day and who are guardians of our countryside, often working in isolated or harsh conditions, both physically and in a competitive marketplace.

It would be easy to be lulled into thinking that Bromsgrove is somewhere quiet and without ambition, but hon. Members must not be fooled. The Sunday Times recently highlighted how South Bromsgrove high school is a powerhouse of aspiration and entrepreneurship, producing young high achievers who have gone on to found leading companies in their sectors, including Gymshark and AYBL. It is in no small part down to the attractiveness of rural Worcestershire that Bromsgrove is a fertile place for aspiration and ambition to bloom. As a Conservative, I believe in respecting the tradition and heritage that anchor our institutions and values, as society evolves to meet the needs of the present day and into the future.

Prior to my election to Parliament, I spent many years as a councillor in Worcestershire, including as leader of Wychavon district council, where I championed the importance of design codes and the role of beautiful design in delivering quality communities that inspire a sense of pride, nod to our past and catalyse the economic and social investment that allow our towns and villages to flourish. We must do this by shifting our collective focus away from beautiful design being seen as a cost, and towards seeing it as an investment that pays dividends in the form of thriving communities and vibrant places where aspiration can bloom. This is critical across Bromsgrove, a place that is 89% green belt and is the rural buffer between Worcestershire and the urban sprawl of Birmingham, to ensure that we protect our green open spaces and do not build identikit monotony all over the countryside, instead focusing on delivering quality homes, with appropriate landscaping and a mix of textures and colours, with genuine local support first.

Over the coming years, we must never forget that the single biggest driver of our economic success is a thriving free market—an environment where businesses are incentivised to invest, creating the prosperity that will underpin our national success. The Government must exercise restraint as they seek to create new bureaucracies, which increase the size of the state under the veil of public service reform, and they should be cautious as additional spending, funded through taxation or borrowing without serious structural reform of public service delivery, will fail every stakeholder who interacts with public services.

In my constituency, Bromsgrove school, founded in 1553, employs over 600 local people and contributes £43 million to the GDP of the UK. While every Member of this House would surely agree that education is the foundation of prosperity, the Government’s proposal to impose VAT on these schools is not only an ill-conceived affront to the children and families who currently exercise choice in education provision but an attack on the wider education system that will undoubtedly do little to enhance the quality of state education and will instead level down education standards across the board. I say that as someone who was proudly educated in excellent state schools.

We must also show determination in delivering vocational skills in agriculture, manufacturing, technology, engineering and trades, which will bolster our prosperity, raising our baseline level of industrial resilience in a world where our adversaries want to blunt our competitive edge. Food and energy security are two of the most significant and interlinked contemporary challenges that we face. The Government must remain pragmatic in their efforts to deliver on both, ensuring that in everything they do, they do not worship at the altar of ideological purity and inadvertently sacrifice our own long-term economic success in the process. In the words of A. E. Housman,

“The house of delusions is cheap to build, but draughty to live in, and ready at any instant to fall.”

I look forward to playing an active role in this House, delivering on behalf of my constituents and in the long-term national interest of our country.