VAT: Independent Schools

Debate between James Frith and Oliver Ryan

Tuesday 8th October 2024 Commons Chamber

[Mr James Frith (Bury North) (Lab)]

I refer Members to my entry in the Register of Members’ Financial Interests. I am pleased to speak in this debate. I am proud to do so for the first time since being put back in my place by the people of Bury North. Returners do not get to be maidens again, so I will just send my best to my predecessor and his family, as is customary. There was not much on which we saw eye to eye, but I respect his work and time in office. I know how losing feels, so I sincerely send him my very best.

It will not surprise you, Madam Deputy Speaker, but I speak in favour of this Government’s laser focus on tackling inequality in our education system. I support Labour’s plans to end the state subsidy of private schools, and it is right that they pay VAT, as businesses expect to pay. I understand the aspirations of parents who work hard and save to provide for their children. I can introduce any Member to thousands of them in Bury North. Many live in some of the poorest wards in the country. Few could ever afford to pay for private education for their children, so I do not expect them to pay for the private education of someone else’s children with a state subsidy and their own hard-earned money.

Forty-three per cent. of children in Bury North live in poverty, and that is concentrated in just three of our nine wards. That is an abject failure of the Conservative party’s 14 years in government—a spike of 10% in as many years. We cannot ignore growing inequalities.

Under this Government’s plans, private schools will become subject to VAT. Although that presents new financial considerations for those schools, I would gently push back on the notion that the costs will automatically mean the same in terms of fee rises. Private schools have a range of financial capabilities to absorb some of these costs: reclaiming VAT on supplies and services; drawing on interest from trust funds or assets; considering how the fees for the use of school assets by the wider community can contribute to the overall budget; introducing fee structures or fees for additional specialist support; and joining with schools in neighbouring areas or nationwide to pay for centralised services. They will remain free to determine what to do, but that is necessary in considering business costs.

None of this is new to schools. I have met some of the brilliant leaders in our private school sector. They are not exclusively innovative, but on a personal and character level, I have loved meeting them and those they teach. Bury Grammar in Bury North is one example. However, as someone who served as a state school governor until recently, I have seen at first hand the budgetary pressures enforced on the schools that teach 93% of our children.

Let us take a moment to consider the Conservative party’s time in office and what has brought us to this point. Under its leadership, we saw an atomisation of our school system, zero accountability for multi-academy trusts, the narrowing of the school system, the off-rolling of children with different abilities, and many young people left without the support they need. It presided over a catastrophic financial crisis for local schools and authorities trying to support children with special educational needs, while SEN families have faced immense frustration, misery and often obnoxious bureaucratic barriers. These parents are forced to navigate labyrinthine systems in pursuit of services that they are legally entitled to access but that remain hidden from view under lock and key.

[Oliver Ryan (Burnley) (Lab/Co-op)]

SEND services are really important to people in my constituency as well. Does my hon. Friend agree that we are not anti independent schools or private schools or the work that they do? He is right when he talks about the whole state sector. Does he agree that this is important?

[Mr Frith]

My hon. Friend is absolutely right. We are not anti. We are for the many and the few. Conservative Members want to remain in their comfort zone following their election defeat. We have all been there, but it is the wrong place to be. It is right that people pay VAT on school fees.

I was at a termly governors’ meeting—Opposition Members will like this—when news of the last Government’s bare-minimum teachers’ pay rise came through. There was some welcome surprise that the then Government had done even the bare minimum. That was quickly replaced by the hard-headed financial reality from the business manager. They confirmed to the same meeting that, even with the 3.5% that had been kept in reserve to meet the contribution they were expecting in Bury to make the pay rise, they would face a budget deficit because the teachers would no longer be on strike. That is right—the Tories designed a system where the leaderships of our state schools have to rely on the unfair treatment of our teachers in order to come in under budget. That is the reality that we face, and it is their everyday experience. There have been no maths teachers for year 11s, and the leadership have been weighing up whether to buy in multiple teaching assistants for cover rather than a science teacher for science—if they could find one. There is a huge amount to do, and this measure will only touch on a fraction of the legacy that Labour must clear up from the last Government and their 10 Education Secretaries.