Independent Schools: VAT and Business Rates Relief

John Lamont Excerpts

Monday 3rd March 2025 Westminster Hall

[Martin Vickers (in the Chair)]

Before we begin, I will make a short statement on the House’s sub judice resolution. There are legal proceedings active in relation to the policy of applying VAT to private schools. However, Mr Speaker issued a waiver on 5 February to allow reference to those cases, now and in future proceedings, on the grounds of national importance. For the record, I point out that my daughter is a teacher in a school affected by the VAT on fees.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

I beg to move,

That this House has considered e-petition 701268 relating to VAT on independent school fees and business rates relief for independent schools.

It is a pleasure to serve with you in the Chair, Mr Vickers. The petition is on an important subject and has gained over 114,000 signatures in two months. The lead petitioner, Hugh Beckinsale, is in the Public Gallery today with his daughter Amelia—someone who will be directly impacted by this policy decision. The petition has a straightforward ask of the Government: do not apply VAT to independent school fees or remove business rates relief.

The petition states that

“the Government needs to understand that not all independent school parents are wealthy, appreciate the benefits of independent schools and do better due diligence… We think this policy will split children from established friend networks, familiar environments and place the burden and cost on public schools.”

I will build on those points throughout the debate, but those succinct statements go straight to the heart of the issue. I commend the petition organisers on being so direct and clear.

I will turn to my own view on this issue. The topic is divisive; usually, that would cause a Government to approach it with caution, respect and careful deliberation, but this Labour Government have taken the opposite approach. They have been deliberately divisive, because their goal is not to improve education for all or even some young people. The decision was taken for purely political and ideological reasons. It is a direct result of the politics of envy and bitterness that extreme elements of the Labour party subscribe to and champion. It will do damage to young people, directly and indirectly, but the Government are not listening or even pretending to listen.

In truth, Labour Ministers do not care about the negative impact of the policy, and they have not considered what may happen as a result of it. As the Independent Schools Council has made clear, independent schools were shocked at the rushed nature of the introduction of the policy. In my discussions with representatives of independent schools, they have said that it has not been well thought through.

Before I turn to the negative impact that the policy will have, I will briefly mention my constituency in the Scottish Borders. We are lucky to have excellent schools in the state and independent sectors across the Scottish Borders. St Mary’s in Melrose is the only independent located in my constituency. However, many of my constituents send their children to independent schools in Edinburgh, East Lothian and across the border to Longridge Towers school near Berwick-upon-Tweed. St Mary’s school was founded in 1895, and has been providing an extraordinary educational experience for boys and girls between two and 13-years-old. All those young people will be directly affected by the policy, so I have received many letters and emails from concerned parents and teachers.

As a result of the lack of care when this policy was brought in, Labour has created serious issues that will impact pupils, parents and the public purse. First, the policy will burden parents with huge costs when bills are already high; they have already been taxed on the money that they earn, but they will now be forced to pay tax on it again. As the Independent Schools Council has stated, this policy is

“a blanket tax that assumes independent schools are a stereotype”.

It assumes, wrongly, that all parents who send their children to independent schools are immensely wealthy and can afford to pay more and more.

That was also noted by Matthew Dent, who is the public affairs and policy officer at the Independent Schools Council. He highlighted that the policy treats everyone who sends children to independent schools as wealthy, as well as the fact that it is simply not realistic to raise taxes by 20% with no warning. That is a good point: there are few other instances in which the Government would even consider introducing a 20 percentage-point tax rise in a single year.

The second issue that Labour has created is the impact on vulnerable pupils, who seem to have been neglected entirely. There seems to be no recognition from the Government that independent schools do not cater exclusively for wealthy children, but for young people who may need extra support. As the Independent Schools Council’s chief executive, Julie Robinson, has said, the policy will,

“cause huge disruption for thousands of families and children, especially those in low-fee faith schools, specialist arts education, single-sex schools, or those who need special needs support.”

The Scottish Council of Independent Schools has also endorsed that point, saying:

“Pupils with additional support needs will be affected the most by disruption to their education.”

The policy will also have an impact on people on the margin of being able to afford independent schooling for their children. The ISC claims that around a third of independent schoolchildren are not paying full fees; they are there because of special needs or academic excellence, not because of how rich their parents are. In fact, in most cases, money cannot buy a place at a top independent school—only merit can. As the SCIS highlighted, children in receipt of fee assistance will be the most at risk of being forced out of independent schools. It stated that the finances of those families have

“already been rigorously means tested and assessed as at the limit of what they can afford therefore we know they cannot pay any more. Being forced to move school will be particularly detrimental to children with additional support needs.”

None of that seems to have been properly, or even slightly, considered by this Labour Government, who charged ahead with this policy at breakneck speed. They did not sit down to have discussions about the impact that the policy would have on vulnerable children; they charged ahead, because this is an ideological and political move. It is not meant to help the country; it is intended to appease the left-wing fringe of the Labour party.

The third problem is the dreadful consequences on some young people who will be forced to move school. The policy could be devastating for those who will have to start again somewhere new. Students forced to move schools may be ripped out of a friend network or taken out of the stable set-up that they are used to. They may be forced, through absolutely no fault of their own, into a very different learning environment. Have the Government not made any assessment of the emotional and mental health damage that will cause to our young children, or do they just not care?

To make matters worse, that could happen to those young people at a critical moment in their education—for instance, in an exam year or when they are about to choose subjects that will influence their later career. How can it be fair to inflict that on young people? What have they done to deserve such upheaval? Why could this policy, if it had to be brought in, not have come through with a delayed introduction period so that parents could, at least, plan with a bit of warning?

It is clear that this policy is not an attack on wealthy parents but an attack on vulnerable children. As I have also already noted, many of those young people will have additional support needs and may not be well suited to a sudden change of environment. It is estimated that, in Scotland alone, 6,000 pupils will have their learning disrupted by being forced out of the sector. That is 6,000 young people in Scotland who will suffer for no good reason. What the Government are inflicting on young people is wrong, but they seem to neither listen nor care.

[Dr Scott Arthur (Edinburgh South West) (Lab)]

The hon. Gentleman is talking with great passion about a subject that is of interest to him and to us all. He talked of many thousands of children facing displacement, but, in Edinburgh, I think the number of children being moved from the private sector to the state sector is somewhere between 50 and 60. Edinburgh has one of the largest private sectors in the UK, so where are the other thousands coming from?

[John Lamont]

The hon. Gentleman represents a part of Scotland where the proportion of young people going to independent schools is among the highest, if not the highest, in the country. I have had conversations with constituents and the teaching staff at a number of schools in his constituency, so I know how concerned they are. A number of parents are now considering taking their children out of the sector because they can no longer afford to pay the fees.

The hon. Gentleman knows from his discussions with those parents that they are not necessarily wealthy. During the last election, I spoke to parents who had made really tough choices about how they lead their lives to ensure that they can pay school fees—very often in schools in his constituency. They have made that choice about how they want their children to be brought up, and I think it is wrong that the Government are potentially taking that choice away or making it much more difficult for families to send children to the very good schools that he supposedly represents.

[Christine Jardine (Edinburgh West) (LD)]

I represent a different part of Edinburgh, where one in four or five pupils goes to independent school. I have already received representations from parents who have had to take their children out of their schools and are concerned about where they can be placed in the city, given that the Labour council has already said that at least 15, and possibly 16, schools will be at capacity by the end of the decade even if there are no extra pupils.

[John Lamont]

The hon. Lady makes an excellent point. Many young people, particularly in the city that she represents, go to schools in the independent sector, so the effect of this policy will be disproportionately higher in her city and the constituency of the hon. Member for Edinburgh South West (Dr Arthur), than in other parts of Scotland and the United Kingdom. It is disappointing how dismissive Labour Members are of the concerns raised by the schools that the hon. Gentleman supposedly represents.

My fourth point, which really undermines Labour’s stated reasons for going ahead with this policy, is that there are huge potential costs to state schools arising from pupils moving out of independent schools. Every pupil who moves from an independent school to a state school will incur more cost to taxpayers. Those students did not cost the Government any money, but now their entire education will be met at a cost to the taxpayer.

The Government think that they have been clever by raising a tax to support public services, but they have not come to the obvious realisation that they are also raising the cost of providing public services. Just look at the number of students: there are 30,000 pupils in independent schools in Scotland alone. Survey data from the Independent Schools Council shows that, across the UK, 8,500 children have already left independent schools or did not start last September, and another 3,000 are expected to have left in January. The Independent Schools Council has stated that that is nearly four times the Government’s estimate for this year alone. The kicker is that the real test will come in September 2025, once this policy really hits parents hard. All those pupils will now have their education delivered by the state, and taxpayers will have to pay for it.

Now that I have outlined the great damage that the policy could do, let me turn to what the Labour Government have said in response and rebut some of their ridiculous claims. The Government stated in response to the petition that the policy

“will raise £1.8bn a year, helping to deliver the Government’s commitments for children in state schools.”

Except that may not be the case. It may not raise anywhere near that amount, because that is an estimate, not a hard fact. That claim also does not fully take into account the cost to the public finances of so many young people joining the state school system all at once. It is a big claim, and it does not really stack up.

[Dr Arthur]

It is important to remember that, although there is uncertainty with the number, and the revenue could be slightly lower or slightly higher—we do not know—the policy will none the less generate revenue. I spoke to the principal of an independent school in my constituency last week, and she outlined some of the challenges that she faces because of the policy, but the challenge that we face is that if we cancel the policy today—I know we cannot—the revenue that it generates will have to be found somewhere else. I ask the hon. Gentleman: where should we find that revenue? Perhaps we can find that money from public services in his constituency.

[Martin Vickers (in the Chair)]

Order. I remind hon. Members that interventions should be short.

[John Lamont]

The last Government increased revenue expenditure in our schools during our time in office. If fewer pupils go into the independent sector, the Labour Government will have fewer opportunities to charge VAT, so the policy will not raise the anticipated revenue. I am intrigued to know whether, in the discussions that the hon. Gentleman has had with the multiple independent schools in his constituency, a single one indicated any support for the policy. I am more than happy for him to intervene again if he can name one school in Edinburgh that supports the policy.

[Dr Arthur]

I thank the hon. Gentleman for inviting my intervention. What I will say is that more than half of voters in Edinburgh voted for the policy. Does he think that they were wrong?

[John Lamont]

I would be amazed if the voters of Edinburgh endorse the policy in the way that the hon. Gentleman suggests. He should put that suggestion to some of the Facebook groups that support the directly affected Edinburgh parents—some of his constituents are directly affected by the policy—and see how many of their members say they support the policy. I suspect that very few will. If he paid any attention to those groups, he would know how much animosity there is towards the policy among parents in Edinburgh.

[Richard Tice (Boston and Skegness) (Reform)]

Does the hon. Member agree that it is quite possible that this ludicrous policy raises the square root of net zero once we knock off possibly 100,000 children not going to independent schools, the recovery of input costs from schools, the closure of schools and the reduction in bursaries because the schools cannot afford to give them?

[John Lamont]

The hon. Member is absolutely right, and that leads me neatly to my next point. Let us look at what else the Labour Government have claimed. They said:

“Ending tax breaks for private schools was a tough but necessary decision that will secure additional funding to help deliver the Government’s commitments relating to education and young people.”

That supposed extra funding is far from guaranteed. The policy is unlikely to raise what has been stated, and it may well incur far greater costs to taxpayers than anticipated.

Let me state it plainly: nothing about this decision was necessary. This did not need to happen now or in this manner. At the very least, it could have been considered in detail, with all the repercussions weighed up. The Government estimate that in the long term, 37,000 pupils will leave or never enter the UK private school sector as a result of the VAT charge. That number may also prove to be nonsense; if it is, the Government’s entire basis for doing this will fall apart. If the number is higher, the cost to the public finances will be higher and less revenue will be raised. That is a potentially vicious double whammy for the Treasury, inflicted entirely by Labour’s own design.

[Alison Taylor (Paisley and Renfrewshire North) (Lab)]

Does the hon. Gentleman agree that the policy was well documented in the 2017, 2019 and 2024 Labour manifestos? People voting in the 2024 election were well aware of Labour’s policy.

[John Lamont]

If the hon. Lady engages with the parents and schools affected, as I am sure she has, she will know that one of their criticisms is the haste with which the policy was introduced, and the inability of schools and parents to make plans to adjust to this severe tax. I cannot think of another example of a Government trying to increase a tax by 20% in one go. One of the main reasons schools and parents are so concerned is the failure to engage, discuss and properly understand the impact, as well as the suggestion that only wealthy parents will be affected. The hon. Lady will know from her constituency that people are making tough choices about whether they send their young people to one of the local independent schools; they are making choices about how they lead their lives, and budgeting accordingly. It is very sad that the lives of young people will be disrupted as a consequence of the policy.

The Government also stated:

“Many of the resulting moves into state schools are expected to take place at natural transition points, such as when a child moves from primary to secondary school, or at the beginning of exam courses.”

That is pure assertion. It is made up. It is fantasy. The Government have no guarantees that that will be the case. There is no evidence to suggest that pupils will move only “at natural transition points”. Many parents will be unable to afford the extra bills and will have to move their children immediately, and not at a “natural” time. As I stated earlier, that could easily be at a critical moment in the child’s development.

The Government have said:

“These policies will not impact pupils with the most acute additional needs.”

That is plainly false. It is not even close to the truth. The Independent Schools Council, the Scottish Council of Independent Schools and individual headteachers all say the opposite. The Government’s policy will have an impact on vulnerable pupils with additional needs. It is simply shameful to claim otherwise, and does a huge disservice to the many parents out there doing their best for young people who just need a bit more help.

I conclude by thanking the petitioner again and all those who have signed this important petition. I look forward to hearing from other right hon. and hon. Members about their views of the petition. I believe that this reckless policy is being pursued for political and ideological reasons. It is not about what is best for the country; it is a move to placate the left wing of the Labour party. It will cost pupils, parents and taxpayers. It will leave both independent and state schools worse off. Labour promised change—well, here it is: change for the worse.

--- Later in debate ---

[John Lamont]

I am conscious of the time and that the House of Commons is about to vote. I will not detain hon. Members much longer.

I thank the petitioner for bringing forward this petition and the 115,000 people who bothered to sign it. I also thank all hon. Members who contributed to this important debate. I think it is telling that the vast majority of right hon. and hon. Members spoke against the Government’s policy regarding the VAT charge on school fees and the removal of business rates relief. The empty Government Benches are also very telling, although there were notable exceptions in the hon. Members who did come to try and defend their Labour Government’s policy. It was interesting to hear some of the caution that was also being expressed, however, most notably by the hon. Member for Ealing Central and Acton (Dr Huq), who gave a very important contribution.

I was struck by all the contributions about the impact that this policy will have on young people with additional needs, and the fact that it is not simply about wealthy families choosing to send their children to independent schools. There are lots of young people who go into the independent sector to get the educational support that they need to be able to achieve their full potential. Many of them will be deprived of that opportunity because of this policy. We also heard from a number of hon. Members about the impact on military families, which I had not previously considered.

I am deeply disappointed by the Government’s response, as I am sure all the petitioners are. There was no recognition that there might need to be a review of this policy in future and of how it will affect the independent sector and the opportunities of young people.

Again, I thank Hugh, the petitioner. One of the highlights of the day was meeting his daughter, Amelia, who is in the Gallery. I hope that she has enjoyed the debate and has found it interesting, although I suspect that the purchase of a House of Commons teddy bear before the debate will be the high point for her.

Question put and agreed to.

Resolved,

That this House has considered e-petition 701268 relating to VAT on independent school fees and business rates relief for independent schools.

Support for Pensioners

John Lamont Excerpts

Wednesday 12th February 2025 Westminster Hall

[Blake Stephenson]

I am absolutely shocked, and I will come on to mention a few stories from my own constituents. They are very similar, and I think we are hearing these stories up and down the country.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

My hon. Friend is speaking very well about the challenges that older people are facing. I note that there are no Labour Back Benchers here to contribute to the debate. We have the Minister and his Parliamentary Private Secretary, so the payroll are here, but despite all the rhetoric during the general election campaign about supporting pensioners, Labour Back Benchers do not seem to be willing to stand up for them in this debate.

--- Later in debate ---

[Blake Stephenson]

My hon. Friend says no, but I was making a rhetorical statement.

Perhaps I am being unfair. Perhaps the Government care deeply about supporting pensioners and have been working tirelessly to help them. Well, there is another problem there, because a Government working tirelessly to support the most vulnerable pensioners would know exactly how many needed support and how many were missing. They would have a tracker counting down towards zero, and a working culture in the Department for Work and Pensions that meant it did not rest until everyone who needed support received it. Do they have that culture? No, they do not. The Government have already admitted that they have set no targets for pension credit sign-ups, and last month they could not even give me an estimate of how many pensioners below the pension credit threshold will not receive their winter fuel payment this winter. These are the most vulnerable people in our society. It is utterly shameful.

[John Lamont]

My hon. Friend is being generous with his time. He is rightly highlighting the weaknesses of the Labour Government in supporting pensioners. Does he agree that in many communities, the voluntary and third sector is now stepping forward to provide that support? In my area we have the Borders Older People’s Forum, the warm-ups in St Boswells village hall, the Hawick dementia café and multiple other examples of the voluntary and third sector stepping forward to provide the support that the Government should be providing.

[Blake Stephenson]

I thank my hon. Friend for making such an important point. Yes, the third sector has come forward to support, but what have the Government done to the third sector? They have applied national insurance increases and reduced the threshold, causing pain and suffering for the sector that our constituents now rely on because the Government have stepped away from their responsibilities.

The support that the Government have given pensioners to cover off the impacts of their decision to cut winter fuel payments is merely the thinnest of political spin. The most prominent such cover is the extension of the household support fund, which itself is an attempt to outsource the protection of vulnerable residents to already under-pressure local authorities that should be focused on delivering high-quality public services.

But it is worse than just outsourcing the problem, because a bit of examination showed that up to be the most disappointing example of the empty words our constituents hate. Despite the spin, the truth is that the household support fund simply has not been designed with pensioners in mind. The east of England receives £32.90 per pensioner. London receives double that: £66.73. When I first saw those numbers and the Government’s description of the household support fund as mitigation for pensioners, I wondered why London’s pensioners had been deemed so much more deserving of support, so I wrote to the Secretary of State. I got the simple answer that the fund is not intended to be targeted at pensioners. The Government have even admitted to me that they do not know how much of the household support fund went to pensioners this winter. Age UK estimates that typically, £1 in every £10 the household support fund pays out goes to pensioners.

What does all that mean for our pensioners? It means more pensioners in hospital—nearly 20,000 more in November and December 2024 than in the same months in 2023, a 6.6% increase. That is 6.6% more stress on our already overstretched health services, and it is nearly 20,000 more pensioners suffering in hospital and potentially suffering lasting ill health, because this Government, which some of them voted for in the belief that they would look after them, forced them to make a choice between heating and eating. It means tens of thousands more pensioners in poverty. Those are the Government’s own statistics.

Agricultural Property Relief

John Lamont Excerpts

Tuesday 28th January 2025 Westminster Hall

[Ann Davies]

Of the clients that Eirian mentioned, five of them will not come under the tax liability because they have very small farms with off-farm income, they have transferred their farms following ill health, or they have significant debt that offsets the value of their farms.

It is clear that the assessments of the impact of the changes on working farms across the UK, on the wider economy and on the wider food supply chain are inadequate. The data that we have is deficient; it includes smallholdings and non-working farms. Data based on the basic payment scheme or on agricultural output would provide a fairer representation of the situation for genuine farmers.

[John Lamont (Berwickshire, Roxburgh and Selkirk) (Con)]

The hon. Lady is speaking remarkably well about the challenges that this Government policy will create for farmers in Wales, in Scotland and across the UK. Research by Scottish Land and Estates shows that the average UK farm size is 217 acres and the average agricultural land value in Great Britain is £8,200 per acre, which means that the average working farm in the UK is worth about £1.8 million. Does that not show the flaw in the Government’s argument? This policy is not attacking the richest landowners; it is attacking working farms the length and breadth of the UK.

[Ann Davies]

I thank the hon. Gentleman for his intervention and I totally agree. Indeed, I will give further details about that issue later in my speech.

It is also clear that industry experts were not consulted on the changes prior to the announcement, even though consultation could have led to a fairer and more appropriate solution that is not detrimental to family farms or the wider industry.