Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Black of Brentwood Excerpts

Report stage
Tuesday 18th March 2025 Lords Chamber

[Lord Lexden (Con)]

My Lords, Amendment 25 has the support of my noble friend Lord Black of Brentwood. We are both profoundly conscious of the importance of the contribution the independent sector of education makes to providing for children with special educational needs and disabilities. I hope the Government also recognise this important contribution and will join us today in paying tribute to it.

One-fifth of pupils in independent schools receive SEND support—a significantly higher proportion than in the state sector. The small schools, which are so numerous in the independent sector of education, are ideal places for such pupils. They thrive under the careful, compassionate supervision of their dedicated teachers and the staff who support them. Many of these schools, cherished by pupils and parents alike, are members of the Independent Schools Association, of which I am president, giving me an interest, which I declare.

The continued success of these schools needs to be safeguarded at a time when SEND provision in the state sector is in crisis—a crisis which will not be relieved for some time through the plans for significant improvement that the Government are quite rightly making. Everyone hopes that the Government’s plans will eventually succeed, but arrangements are needed of the kind for which this amendment provides.

Amendment 25 would help safeguard the future of independent schools that specialise in SEND provision, which are so badly needed in our country today. Under this amendment, an independent school that has 50% or more pupils with a registered SEND need would retain its charitable rate relief. The Government say that such relief must be confined to schools with some 50% of pupils with education, health and care plans. That is the wrong dividing line. There are nearly 100,000 pupils with a registered SEND need in independent schools whose parents do not want or, in many cases, have been unable to get an EHCP, which is notoriously difficult to acquire, since a long and often expensive obstacle course awaits those who apply for it.

In Committee, the Minister was at pains to stress that the majority of children with special educational needs have those needs met in state schools. Of course that is so, but it is wrong to neglect or diminish the crucial extent to which independent schools supplement the state’s provision, working in the spirit of partnership which is the predominant characteristic of the independent education sector today.

Without this amendment, invaluable SEND schools can be expected to find themselves in grave difficulty or will be forced to close. I beg to move.

[Lord Black of Brentwood (Con)]

My Lords, I will speak to Amendment 26, in the name of my noble friend Lady Barran, to which I have added my name. I support all the amendments in this group, especially Amendment 25 from my noble friend Lord Lexden, who put his case so powerfully. It is shameful that the Government refuse to recognise the extraordinary role that independent schools play in the care of those with special educational needs. If, even at this late stage, they do not agree to the modest suggestions put forward by my noble friend, they will stand charged with putting the interests of party dogma ahead of the needs of some of the most vulnerable in our society.

I declare my interest as chairman of governors at Brentwood School, president of the Boarding Schools’ Association and Institute of Boarding, and, for this group, chairman of the Royal College of Music.

When I spoke in Committee on the issue of gifted arts students, I made one simple point: in an economy that is flatlining, the creative economy is one of the few areas of sustained economic growth with unlimited potential to expand even further. It provides hundreds of thousands of jobs, is part of a huge export market and contributes billions in revenue. We should nurture it, not attack it. Music, as well as being a huge British success story in its own right, powers it by supporting so much of its rich tapestry, including film, television, computer games, drama, advertising and so on. In turn, its future depends absolutely on first-class music education in schools, conservatoires and universities, providing a pipeline of talent into the sector. Without that continuing education, and new musicians and new teachers entering the profession, music dies. It is as simple as that: no pipeline, no music.

But music education—where it all starts—is in real crisis. I acknowledge that this began under the last Government, but we have yet to see any signs of change, despite the new Government having been in office nearly 10 months. From primary schools right the way through to the end of full-time education, music remains under threat as never before.

With music education already in such crisis, why on earth would the Government want to make matters even worse by jeopardising the very real achievement of specialist music, dance, choral and drama teaching in independent schools? The amendment from my noble friend reflects the success and importance of the Music and Dance Scheme schools and their unique contribution, and that of our leading choir schools, to artistic life in this country. Nearly 1,500 pupils—the stars of tomorrow—receive means-tested bursary support to attend renowned specialist performing arts schools which are the envy of the world. Their position is already under threat because most parents are now charged VAT on their fee contributions, with only a small number receiving increased funding to offset it. That is bad enough, and we should not pour fuel on the fire.

This amendment is based on a proposition that is very simple for even the most dogmatic of minds to understand. The future of these schools, which are already facing such pressure, and their continuing ability to provide world-class teaching can be made more secure if they are protected from full business rates. The Government say that their entire agenda is focused on growth, yet here we have a policy that is absolutely anti-growth. Even on the number one item on their agenda for this Parliament, their opposition to independent education is so all-consuming that they are prepared to jeopardise it on the altar of ideology. I hope that even now the Government will see the strength of these arguments and accept my noble friend’s amendment.

[Lord Moynihan (Con)]

My Lords, I rise to speak to Amendments 27 and 29 in my name, and I declare my interests in sport as set out in the register. I thank the Minister for his sympathetic response to my amendments in Committee, our subsequent conversation and the clear personal priority that he attaches to sport, particularly for disadvantaged communities, and the way it can bring them hope and opportunity in life.

There was a time when this Chamber had many contributors to any debate that impacted the world of sports policy. One notable absentee, who retired from the House three years ago, is my noble friend Lord Coe, and I am sure that the whole House will want to take this opportunity to wish him well as he seeks election on Thursday to become the first British president of the International Olympic Committee.

I made my case for these amendments in Committee. Both amendments highlight the lifeline received by many of our top sports men and women who have benefited from the sports bursaries and scholarship policies of independent schools. Today I also make the case for the widespread community use of the many outstanding sports facilities of independent schools, the expertise of their coaches, their support staff and the groundsmen and groundswomen who coach and support their pupils and offer their facilities and services to local communities through dual-use campaigns. Amendments 27 and 29 would provide protection for schools where 10% or more of students receive sports scholarships or bursaries and separately would discount all sports facilities from schools’ business rates.

These proposals reflect the commitment of independent schools to spreading opportunities in sport through fee assistance schemes and public benefit partnerships, including sharing facilities and coaching staff. Sporting opportunities are a key focus for some independent schools, and sports awards form part of the £1 billion in fee assistance delivered by independent schools in the last academic year. What is really important is that more than half the money is means tested, ensuring that support is targeted where it is most helpful, yet the imposition of VAT and the increase in the minimum wage and national insurance contributions are now compounded by the proposed imposition of business rates. Schools will inevitably have to cut back to balance their budgets, and the casualties will be the opportunities for sport and recreational activity for many dual-use local community clubs after school hours.

In moving the first of my two amendments, I drew the Committee’s attention to the contribution that independent schools make to elite sport as well. At the Olympic Games in Paris last year, 33% of Team GB’s medallists attended independent schools. At Tokyo in 2021, 40% of Team GB’s medallists attended independent schools. At Rio in 2016, it was 31%. At London 2012, it was 36%. Yet only 7% of our children go to independent schools, so top Olympians and Paralympians are more than four times more likely to have been privately educated than the UK population overall because of the bursary and scholarship policies on offer.

Let me give the specific example of Millfield, which delivered 13 of the 14 Millfield-educated and trained British athletes on Team GB through its means-tested financial support mechanism. The school funded 13 of the 14 Millfield-educated and trained British athletes on Team GB for the Paris Olympic Games, who between them brought home seven Olympic medals and one Paralympic medal: four gold, three silver and one bronze. All received means-tested financial support from the school during their time at Millfield, but how can that continue? Where will the money come from when the Government themselves predict a significant fall in children going to independent schools and urge those independent schools to make major cuts to their budgets? Where will the scholarships and bursaries be paid from?

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[Baroness Barran (Con)]

My Lords, I rise to speak to Amendment 30 in my name and that of the noble Lord, Lord Storey; I also support Amendment 31 in the names of my noble friends Lord Black of Brentwood and Lord Lexden, which seeks to include a review on the effect that this Bill will have across the education sector.

I think it is safe to say that both the noble Lord, Lord Storey, and I do not believe that the long-standing tradition that education should be free from taxation should be broken. Clearly, the Government do not agree with us, and we have seen this with the egregious introduction of VAT on independent school fees and now with the proposed change in this Bill to the exemption from business rates relief for independent schools with charitable status, not to mention the impact of the proposed employer national insurance contribution increases.

As the Minister knows, the majority of independent schools are small and run on tight margins. As he will remember from my speech in Committee, I believe it is a poor precedent for the Government to set to create a two-tier charity system and there has been no answer from the Government about this principle that all charities should be treated equally. This feels like a rather political move and charities, of all organisations, should be free from such moves.

I assume that the noble Lord is going to argue that there has been no sign that pupil numbers are dropping significantly following the introduction of VAT in January and that this Bill will similarly have a limited impact. But I say to the Minister that, first, the point that the principle that education should never be taxed still stands and, secondly, I do not think anyone really expected the impact on independent schools from the imposition of VAT would happen so quickly.

I am sure the noble Lord has received letters from parents, just as I have. They will go to great lengths to avoid disrupting their children’s education and I would be surprised if we see much change before the start of the new school year, and then from a reduced uptake in year 7. Indeed, the latest data from the Independent Schools Council shows a drop of 4.6% in applicants in year 7 and 3.9% in reception—and that was before the imposition of VAT.

I look forward to hearing the insights from other noble Lords and to hearing the Minister’s response, but at this point I am minded to test the opinion of the House.

[Lord Black of Brentwood (Con)]

My Lords, I will speak to Amendment 31 in my name. I am grateful, as always, to my noble friend Lord Lexden for his support. I also strongly support Amendment 30 from my noble friend Lady Barran. I refer noble Lords to my previous declaration of interests.

Let me explain why this amendment is important. Throughout all the debates on independent education that we have had in this House, as indeed they have had in the other place, the Government have shown themselves seemingly impervious to rational argument. Frankly, they have buried their head in the sand, wilfully refused properly to engage with the independent sector and ignored the strength of feeling in this House and the opinion of experts in the field.

The unpalatable truth that they will not acknowledge is that their policies, of which the measures in this Bill are one central strand, simply will not end up benefiting the state sector in any meaningful or visible way. The 6,500 teachers promised are likely to be a fantasy and will end up being just another broken promise. But the policies will end up profoundly impacting the independent sector and the lives of tens of thousands of pupils and their hard-working parents, and that will have far-reaching consequences not just for the schools themselves but in countless other areas.

Heartbreakingly, as we heard in the debate on the previous group, it will impact on the way in which our society cares for vulnerable children, those with special needs and disabilities, and their carers and families. It will impact on local communities that currently benefit from thriving and imaginative partnerships with state schools, on faith communities and on military families. It will impact on gifted children who benefit from bursaries, something that many independent schools are cruelly being forced now to review, and of course it will impact on jobs at independent schools, especially when closures of schools inevitably and tragically happen.

It is crucial that all this is rigorously scrutinised and that Parliament has an opportunity to examine the consequences of the policies contained in the Bill, taken alongside the other tax changes being made on VAT and on national insurance—a combination of measures that the Government’s impact assessment failed to do, as it related only to business rates. That is what we, particularly in this House, are here for: to scrutinise, examine and challenge. But we need a comprehensive assessment of the facts, undertaken by the Government themselves, to be able to do that, and that is what this amendment would deliver. The Independent Schools Council, which does such an exceptional job in championing the sector, and the other associations that form part of it will conduct their own analysis. Ultimately, however, it is the Government who are responsible for the delivery of public policy in these areas and who must be held accountable by Parliament and the electorate.

The Government say that their measures, including those in Clause 5, will raise a certain amount of money to be invested in state education. I doubt it will raise anything like that, but let us see. They say they will be able to recruit additional teachers. I very much doubt it, but let us see. They say there will be no consequences for children with special needs and those in faith schools—let us see. If they are really confident that their policies can deliver what they say without damaging consequences elsewhere, why would they not want to have a review of them to prove the point? What are they fearful of?

Perhaps it is just possible that they might be wrong and will end up undermining and weakening the independent sector, which is the envy of the world, without delivering for the state sector—which means, of course, that they would have to think again. We need answers to that. That is why I believe they must commit to a thorough review of their policies, then Parliament, including our House, can scrutinise it, debate it and make recommendations for change.

[Lord Shipley (LD)]

My Lords, I agree with both amendments in this group. If you believe in “education, education, education”, you should not tax independent schools in the way that the Government have decided they want to. The Government have argued that taxing independent schools will increase the number of teachers in state schools, but the Government’s own figures show that they reached only 62% of their postgraduate secondary ITT recruitment target in 2024, so there will be pressure to increase the pay of existing teachers rather than to appoint new ones. In any case, most of the extra £1.5 billion estimated to come per year from this clause will go on special educational needs.

I suggest, very much in line with Amendment 25 from the noble Lord, Lord Lexden, that the Government’s priority should be to cut the backlog in assessments for education, health and care plans, rather than taxing parents who want the best for their child with special needs and think it can be delivered only in the independent sector. There is a very basic issue of principle here: the right of a parent to opt out of a state system where they believe their child would benefit from that. When they have paid their share of general taxation and foregone a place in the state system, thus saving the state money, then paid additionally for their child’s schooling, I submit that it is wrong in principle to tax them yet again for that decision to send their child to an independent school.

I have concluded that Clause 5 is a distraction. It will fail to deliver the Government’s ambitions for the state sector, and it is better for our education system as a whole to remove Clause 5.