VAT: Independent Schools

Jim Shannon Excerpts

Tuesday 8th October 2024 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

I beg to move,

That this House regrets that the Government has decided to impose VAT on independent school fees; believes that educational provision should not be taxed; regrets that the Government is rushing to implement this change part-way through an academic year; calls on the Government to exempt from the VAT charge fees paid in respect of children of military and diplomatic families, all children who have an Education, Health and Care Plan, or who are in the process of applying for one, all children on SEN support, Centres for Advanced Training and schools in the Music and Dance Scheme, all children at schools whose fees are lower than the average per capita funding for a state school place, and children at religious schools of denominations for whom there is no faith school provision in the state sector; further calls on the Government to postpone imposition of the VAT charge for schools in areas where state schools in the relevant key stage are already on average over 95% full; also calls on the Government to postpone imposition of the VAT charge for fees paid in respect of children who have started a public examination course, to September 2025 for pupils currently in Year 11 or Year 13, and to September 2026 for pupils currently in Year 10 or Year 12; and calls on the Government to publish a full impact assessment of the effects of this policy on independent schools and the state sector ahead of the Budget.

There are 85 days to go until the introduction of Labour’s education tax, and we are still in the dark. Many questions remain for parents, for children and for schools—when I say “schools”, that is both independent schools and state schools—and also for the local authorities that are responsible for special educational needs provision and generally for ensuring that everyone can get a place at school.

This is a huge change, which is being made in a headlong rush. There are big worries about children with special educational needs or a disability, about military families, about the talented musicians and dancers of tomorrow, about small religious faiths and about the widest impact of all—that on state schools, because this means disruption, bigger classes, budget overstretch, and ultimately, parents being less likely to get their preferred choice of school. Even those who do not necessarily object to this in principle are saying it cannot be pushed through this fast, from the Chartered Institute of Taxation to the NASUWT.

It is a long-standing principle that you do not put tax on learning—a principle all but universally observed around the world. On the Conservative Benches we believe in that principle and we believe in the sanctity of parental choice. The vast majority of children, of course, go to state-funded schools, and we defend the right of parents to choose those schools and defend the diversity of those schools. A small number of parents choose home schooling; we defend that right too. And yes, some choose the independent sector.

Parents are the first educators of their children. The state sets an expectation of a suitable education for all children, and beyond that, parents should make the choice of what is best for their child. Parents might decide to opt out of state education for any one, or many, of several reasons—quite often simply because they have found the school that they believe is right for their child, and where their child is most happy.

[Jim Shannon (Strangford) (DUP)]

rose—

[Graham Stuart (Beverley and Holderness) (Con)]

rose—

--- Later in debate ---

[Damian Hinds]

My right hon. Friend is right to identify that many parents make great personal financial sacrifices to do what they believe is best for their children. Some parents whose children go to independent school are rich, and some are definitely not. I include in that latter bracket most of the parents sending their children, for example, to small religious schools in Hackney, Salford or Birmingham. Very many more are in the middle, including many professionals working in our public services.

[Jim Shannon]

The shadow Minister has rightly underlined the issue for those who send their children to faith schools or independent schools. Many constituents in Strangford have told me that they have saved and persevered, have not been on holidays, have not bought a second car, or have even continued to use their old car longer than they should, so that those moneys can go into their children’s education. Does he, like me, find it impossible to understand how it can be that it is the Labour party—the party of conscience, I would say—that has let us down on this issue and is going to penalise people who are hard-pressed to find education for their children?

[Damian Hinds]

The hon. Gentleman is right about the financial sacrifices some make. Let us be clear: it is possible to tax wealthier people or people with a higher income more, but the Government should be honest about it. The way to do so is through the income tax system, not through a choice that people make to have their child in an independent school. The hon. Gentleman did not mention this, but I might add that because the situation in Northern Ireland is different from that in England—by the way, the situation in Scotland is different, too—the Government need to think carefully about how the policy is applied throughout the whole United Kingdom, because VAT is a reserved matter, and about what it means for the hon. Gentleman’s constituents and others across these islands.