Independent School Fees: VAT

Helen Hayes Excerpts

Wednesday 21st February 2024 Westminster Hall

[Helen Hayes (Dulwich and West Norwood) (Lab)]

It is a great pleasure to serve under your chairmanship today, Mr Henderson. I congratulate the hon. Member for Northampton South (Andrew Lewer) for bringing forward this debate on independent schools and VAT. Many Members have made contributions about the role that independent schools play in their communities. In my own constituency, thousands of children receive a high-quality education at independent schools including Dulwich College, James Allen’s Girls’ School, Herne Hill School, Alleyn’s School and others besides.

I will address some of the comments made by hon. and right hon. Members this afternoon. On the analogy made by the hon. Member for Northampton South about private schools and the difference between private jets and jacuzzis, we would want every school to represent and fulfil the aspirations that parents have for their children. That is at the nub of this debate, which is about the quality of education received by the 93% of children who attend state schools in relation to the quality of education received by a privileged 7% of children. [Interruption.] I am going to make some progress, I am afraid—I will not take interventions right away.

We all want the best education for our children; every single parent wants the best education for their child. That is why the next Labour Government will do what previous Labour Governments have done: drive up standards in our schools and put education back at the centre of our national life so that we can break down the barriers to opportunity across our country. This debate is focused specifically—[Interruption.] I do not know who was chuntering from a sedentary position about what happened last time, but as a London MP I can tell them exactly what happened last time: it was called the London Challenge and it transformed education in the state sector in my constituency and across London. We went from a situation where our schools were failing under the Conservatives to a situation where they are now delivering brilliantly for all our children.

As many hon. Members have mentioned, the Labour party is committed to levying VAT on independent schools and ending their business rates exemptions. We have committed to doing that because we believe in driving high and rising standards in all our schools. Across this country, more than nine in 10 children attend state schools. The independent Institute for Fiscal Studies reported last year on policies in relation to VAT and tax exemptions for private schools. In brief, it found that our proposals would have little effect on the number of children being educated in private schools, but would lead to a net gain to the public purse of at least £1.3 billion per year. I appreciate some of the concerns raised in the debate today, but I urge right hon. and hon. Members to look in more detail at the IFS report’s findings.

[Neil O'Brien (Harborough) (Con)]

I just want to press the Opposition Front Bencher on a specific point. There are some brilliant special schools in my constituency. The Opposition are saying that they will exempt children with an EHCP from their tax, but they are not saying that they will exempt all children at special schools from the tax. Why not?

--- Later in debate ---

[Helen Hayes]

There is a very simple reason for that. It is the way we avoid a loophole whereby any school can claim that it is a special school. Without there being an independent test of the places that are provided, any school could claim that it was a special school, and that would provide a loophole that we do not—

[Neil O’Brien]

rose—

[Helen Hayes]

I will not give way again. It would provide a loophole that schools could use to evade the policy.

The share of pupils being educated in private schools has consistently remained around 6% to 7%, despite fees increasing above inflation year on year for many years. Indeed, independent school fees are 55% higher in real terms now than 20 years ago. Although we do not believe the scaremongering that there will be an exodus of pupils into the state sector, our state schools would be able to cope with an increase in their numbers. Across England, overall pupil numbers are due to decline by at least 100,000 per year until 2030; the total drop is higher than the number of children currently attending private schools.

[Mr Robin Walker]

Will the hon. Member give way on that point?

[Helen Hayes]

I give way to the Chair of the Select Committee.

[Mr Walker]

That is very kind; I am grateful to the hon. Member for giving way. I just want to make the point that, yes, the overall numbers are declining, but that is primarily in primary. The demographic bulge, as she well knows, is coming through into secondary schools, and secondary schools in many areas of the country are full. How does the Labour party plan to deal with that?

[Helen Hayes]

As the hon. Member rightly points out, what happens in primary flows into secondary, so secondary schools across the country, including secondary schools in my constituency, are absolutely aware of the drop in numbers that is coming down the track, and we are seeing secondary schools in London closing—two of them this year—because that flow is starting to affect them.

The Labour party believes in parental choice, but the conversation today has to take place with fairness in mind. In 2022-23, average independent school fees were £15,200, but average state school spending per pupil was £8,000. The gap in funding between independent and state school spending has more than doubled since 2010. With the £1.3 billion of funding that would be raised each year from our measure, we could significantly increase school spending, allowing the Government to drive high standards across our state schools too. The Government are consistently missing their targets for teacher recruitment and face teachers leaving the profession in droves. We would use that money to recruit and retain more than 6,500 additional teachers.

There is considerable evidence of the need to improve and the benefit from improving teacher training, so Labour will work with schools to deliver a teacher training entitlement, throughout every stage of a teacher’s career, to deliver evidence-based, high-quality professional development.

We need to look again at school inspection and improvement—