Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Lexden Excerpts

2nd reading
Wednesday 29th January 2025 Lords Chamber

[Lord Lexden (Con)]

My Lords, I continue the discussion about independent education. I do so with some temerity in view of the fine speeches made by my infinitely more distinguished noble friends in this debate.

I declare my interest as former general-secretary of the Independent Schools Council and the current president of the Independent Schools Association, one of the council’s constituent bodies, which has just under 700 member schools. Most of them are small in size, operating on tight budgets without any reserves whatever. They are dependent on fee income which, in some cases, can be as low as £3,000 per pupil a year. The council—the chief representative of the independent education sector—acts on behalf of some 1,400 schools. They are immensely diverse in character and are educating with marked success around 80% of the 600,000 children in the independent sector. No responsible Government would seek to make life difficult for these flourishing schools, some of world renown. Yet severe difficulty is exactly what this Government are creating for them.

This Bill continues and extends the Government’s attack on independent schools—one that recognises no distinction between the very varied types of school in the independent sector of education. The Government treat them as it they are all the same and all equally capable of shouldering the new financial burdens, each one of them unprecedented in character, that they are inflicting on independent schools in quick succession. Perhaps the Government believe that all independent schools can somehow find the means to pay their unprecedented financial exactions. If they believe that, they are putting hostile prejudice before reality.

Over 1,000 independent schools, 40% of the total in England, have fewer than 100 pupils, according to the Department for Education’s figures. Is it not obvious that these numerous small schools will suffer particular hardship as a result of the unprecedented financial pressures the Government are piling on them? Some will go under. Evidence is accumulating. The Independent Schools Council will ensure that all of it is placed prominently before the public.

This will add to what is already known. A revealing short debate on Monday, introduced by the noble Lord, Lord Morrow, brought to our attention the sharp fall of no less than one-third in the number of prep schools in Northern Ireland after Sinn Féin made them pay VAT. It is well known that Northern Ireland has some of the best schools in the country, achieving spectacular exam results. It is deplorable that their number should have been reduced by a VAT burden.

On 1 January, just four weeks ago, the Government slapped VAT at 20% on all independent schools, having given them no more than a few months to rework the budgets they had already drawn up for the current school year. It was a terrible thing to do. As they endeavour to come to terms with Labour’s new education tax, independent schools must now prepare for two more financial burdens: the increase in national insurance contributions and the full payment of business rates for the first time ever under the terms of this Bill. Independent schools face a threefold assault from this Labour Government—an assault carried out in just six months.

The Government rejoice that, through this Bill, they will end tax breaks. What do they mean by this? Presumably, they want us to think that they are taking away from independent schools exemptions from taxes that they did not deserve in the first place but somehow managed to acquire. It is absurd. There are no special arrangements which have hitherto enabled independent schools to get out of paying taxes. They have shared with all other providers of education services exemptions from VAT. Those schools which are charities have, until now, shared in the tax arrangements that cover the charitable sector as a whole.

This Bill will create a two-tier charity system in our country, with independent schools in the bottom tier, where other charities may join them in due course as the Government find fresh targets to hit. This Bill will establish for the first time that charities that the Government do not like can be stripped of their charitable treatment even while they comply with their obligations and serve the community at large through work of great public benefit. For independent schools, public benefit work increasingly takes the form of partnership with state school colleagues, as we have heard from my distinguished noble friends. Up and down our land, the two education sectors work together in thousands of partnership schemes.

The increased costs the Government are inflicting on independent schools will endanger that invaluable work. Remarkably, the Bill will inflict grave damage on independent schools without raising significant revenue. The Budget documents estimate that some £70 million will be raised in 2025-26—just 0.1% of the core schools budget. Could there be any clearer evidence of the Government’s hostility to independent schools? Is this, by the way, the first legislation to substitute “private schools” for “independent schools” in its wording? Over the last 30 years or so, the habit has grown up of referring to independent schools as “private” schools. It is in an informal, everyday term. “Independent” is the correct, formal term. Why are the Government now abandoning it? The education department has always registered schools outside the state sector as independent schools. The department has an independent schools division. Should not legislation respect formal, correct usage?

It will be evident that my chief concern is the damage that this Bill will do to small schools, which abound in the independent education sector, as a result of a threefold financial assault being made on them at such speed. I think of the 20,000 children who attend independent Muslim faith schools, charging pupils on average £3,000 a year. I think of the 20,000 children at the United Kingdom’s 80 independent Jewish schools. Their representatives said last month that they

“cannot absorb the cumulative financial pressures”,

adding that

“it is likely we will see a significant proportion”—

of children—

“being left without a school to attend. Many will be left with no alternative but to be educated at home”.

I think of the many wonderful schools making superb provision for children with both complex and more moderate special needs at a time when the state SEND system is in such deep trouble. About 100,000 families will have to pay more as a result of the Government’s tax increases. A number will be driven into the broken—the Government admit that it is broken —state SEND system, unless the tax rises are eased.

There will be much to consider in detail as we move to the Committee stage of this unfortunate Bill.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Lexden Excerpts

Committee stage
Thursday 27th February 2025 Grand Committee

Moved by

[Lord Lexden]

54A: Clause 5, page 5, line 16, leave out “private” and insert “independent”
Member’s explanatory statement
This amendment, in conjunction with other amendments in Lord Lexden’s name, seeks to replace “private school” with “independent school” throughout the Bill.

[Lord Lexden (Con)]

My Lords, in moving Amendment 54A, I will offer explanatory comments that also apply to Amendments 55A, 59A, 69C, 69D, 77 and 78. All are cast in the same form and have the same purpose: to make this a Bill that, in its Title and throughout Clause 5, refers to “independent” rather than, as at present, “private” schools. The issue is clear and straightforward, and I shall be brief, having touched on the general issue on Second Reading.

I want to probe the Government’s reasons for not conforming to established practice and usage, which have hitherto ensured that independent schools are called by their correct, formal name in legislation. There may perhaps in recent years have been stray references to “private schools” in legislation—my noble friend Lady Barran, so recently a Minister at the Department for Education, may be able to comment on that point—but never before, I think, has a Bill been brought forward that has abandoned standard practice in favour of another formulation, namely “private schools”.

Does this matter? Both formulations are in general, widespread, everyday use. The words “independent” and “private” are used interchangeably in relation to schools outside the state sector of education, a sector that of course includes academies, which have a measure of independence but are not independent schools. The question is whether the comparatively new way of referring to schools outside the state sector—no one, I think, referred to “private schools” until about 30 years ago—should supersede the term long established in law and employed universally, I think, by official bodies, most notably the Charity Commission and the Department for Education.

Schools that are charities are registered by the commission as independent schools. The Department for Education keeps a register of schools outside the state sector, which for many years was overseen by a distinguished senior civil servant rejoicing in the title of registrar of independent schools. These days, the department has an independent schools division.

No plans, I think, have been announced to sweep away the terminology that has been for so long in official use and replace it with another one featuring the term “private school”, giving what is now a purely informal practice firm official status. Surely, legislation should reflect standard current formal practice and not create confusion by resorting to a term hitherto unknown in law.

There is one further consideration. The term “private school” is not universally accepted as politically neutral. It can be regarded as implying criticism of schools outside the state sector—private in the sense of separate, exclusive, cut off from the rest of the world. That is the way in which some on the left in British politics love to portray our country’s independent schools. Their falsehoods are assisted by the term “private school”. I suggest that the term has therefore to be treated with care.

--- Later in debate ---

[Lord Khan of Burnley (Lab)]

I am happy to write to the noble Baroness on those two points; I will also pick them up when we next meet.

[Lord Lexden (Con)]

My Lords, please forgive me: I forgot to make a declaration of interest at the outset. I am a former general secretary of the Independent Schools Council and the current president of the Independent Schools Association, which consists of 700 schools—mainly smaller ones—that will be badly affected by this legislation and other actions of the Government in the realm of taxation.

The Committee will have listened carefully to what the Minister said in response to noble Lords. It is unlikely that the Minister’s reply will have given complete and utter satisfaction in every respect. We will return to these matters on Report. As far as my amendments are concerned, I am sorry that the Minister does not understand the reasons why the word “private” is very difficult because of its connotations. The problem with using it in legislation is considerable.

The Minister referred to the position of academies. Another way could have been found of dealing with VAT without introducing independent schools in the way that this has been done in legislation. There are many serious matters that naturally require further consideration and debate. That is why Report will be so important. I beg leave to withdraw my amendment.

Amendment 54A withdrawn.

--- Later in debate ---

[Lord Black of Brentwood (Con)]

My Lords, I will speak to Amendments 69A and 69B in my name and that of my noble friend Lord Lexden as well as to Amendment 64 in the name of my noble friend Lady Barran, to which I have added my name. I refer to my earlier declaration of interests and, for this group, I add that I am the chairman of the Royal College of Music.

On music, let me start with Amendment 64, which is an extremely important amendment. It would have long-term ramifications well beyond the terms of this Bill because specialist music education for gifted students is central to the future of our creative economy, and it therefore needs to be seen in a wider context. As noble Lords will be aware, the UK’s creative industries are vital to our future. With the economy stalling, this is one sector which, for the time being, continues to grow. It employs hundreds of thousands of people, earns huge amounts in exports and provides an essential component of the UK’s soft power, something that is more important now than ever. Right at the centre of the creative economy is music, which powers the rest of the industry.

In turn, the future of music depends absolutely on first-class, specialist music education in schools, conservatoires and universities to provide a pipeline of talent into the sector. Without that education, music dies. However, music education, including that provided by specialist schools in the independent sector, is in trouble and has been for a long time. Music has been squeezed out of the curriculum. The number of pupils taking music at GCSE and A-level has plummeted. Many schools no longer have dedicated music professionals teaching the subject. Indeed, if pupils have access to a dedicated music professional today, it is likely to be because of a partnership with an independent school. From primary schools right the way through to the end of full-time education, music is under threat as never before.

We see the results of that every day, most recently with the appalling decision of Cardiff University to close its school of music, the largest in Wales, something that the world-renowned composer Sir Karl Jenkins has put down to the decline of specialist music education in schools. The closure of the school follows hard on the heels of the closure of the junior department of the Royal Welsh conservatoire, which has enormous repercussions for music in Wales and beyond. At such a time of crisis for music education, which I have to say has not improved in any way since the general election, despite so many promises before it, the last thing we need is for independent specialist music schools, those providing education for gifted students under the music and dance scheme, as well as the leading choir schools to be threatened. It is crucial that they continue to provide music, dance and drama teaching to the most gifted students if we are to protect the pipeline of talent into the music industry.

The future of these schools and their continuing ability to provide world-class teaching will be much more secure if they are protected from full business rates. This is not a niche subject or special interest pleading; it is fundamental to the artistic future of our country and the success of the creative economy. Does the Minister acknowledge the vital importance of the pipeline of musical and dramatic talent into our creative industries? If he does, will he explain why the Government are putting it in jeopardy in this way?

Amendments 69A and 69B deal with boarding schools. Boarding schools play a vital role in our education system, with around 65,000 boarding pupils educated in the independent sector. They contribute just over £3 billion each year to our economy, generating £900 million in revenue for the Exchequer and supporting more than 64,000 jobs. Like the rest of the sector, they are a vital instrument of soft power and one of our strongest exports. Like the rest of the independent sector, they are already under significant strain as a result of not just VAT but the damaging increase in employers’ national insurance contributions. For many, especially the smaller schools, the end of business rates relief will be a huge added burden. Already the signs of the impact are clear: the Government’s figures show that visa applications to study at UK independent schools fell by 23% in the first two quarters of 2024 compared to the same period in 2023. That is a significant straw in the wind.

Recently, one agent told the Boarding Schools Association:

“This tax penalty is making our clients think twice and wonder if the UK is still the holy grail of academia”.


Another commented:

“The reputation of British boarding is already damaged and while it was the destination 10 years ago, it is now one of many”.


With international numbers down and likely to fall further, now is not the time to be adding to the increasingly intolerable burden on so many boarding schools with the withdrawal of business rates relief.

Boarding schools play a crucial role in a number of areas, including the provision of places for military personnel serving our country at home and abroad, as my noble friend said, and for vulnerable pupils with special educational needs and disabilities. My two amendments seek to recognise their importance and, in certain circumstances, exempt them from the withdrawal of relief.

Amendment 69A would discount boarding facilities from a school’s business rates bill if 10% of boarders are on a government continuity of education allowance, or CEA. This reflects the importance of boarding provision for the children of those who serve our country and often risk their lives for it. In the last academic year, 4,000 pupils were supported by CEA for 2,666 service personnel and their families. By easing the commercial pressures on them, this exemption would give a measure of continued support and protection to schools providing places for CEA pupils and reflect the inherent public benefit in ensuring that service families have confidence that they can provide a stable school life for their children.

In the same vein, Amendment 69B would discount boarding facilities from a school’s business rates bill if that school is supporting looked-after pupils supported either directly by local authorities or by charities. It recognises the hugely important role of boarding schools in educating some of the most vulnerable children and the significant pastoral support that they provide. One of the best known charities supporting this work is the Royal National Children’s SpringBoard Foundation. The RNCSF widens access to the opportunities available for young people facing the greatest barriers to their development. Along with local authority and community organisation partners, it works with boarding and independent schools to help them target their fully funded school places on the young people who need them most and help them access them effectively. To date, it has supported more than 1,000 pupils, 98% of whom get two or more A-levels, compared to 16% of disadvantaged children.

Brentwood is one school the RNCSF works with, taking students into boarding places, hosting regional interview days and supporting its excellent campaign to help children in care who are applying to university with their UCAS applications. This is clear public benefit work, supporting not only society’s priorities for vulnerable children but assisting our stretched local authorities support children in their care to achieve their full potential. This is, rightly, an intensive and involved process for any school to engage in to ensure that pupils have the right level of support and guidance around them at school. If anything properly fits the definition of a charitable activity clearly in the public interest, it is this. My question to the Minister is: why on earth do the Government judge that the facilities that care for and support these young people are unworthy of charitable relief?

These are all focused amendments which do not in any way challenge the central tenets of the legislation but recognise the special importance and public policy significance of crucial aspects of independent education. They seek to protect those schools educating gifted students whose careers will power the creative economy, children of military families who serve our country and those who are vulnerable because of special needs. I hope the Minister will accept them. Not to do so would, frankly, be callous and short sighted.

[Lord Lexden (Con)]

My Lords, I will add briefly to the powerful comments that my noble friend Lord Black just made on Amendments 69A and 69B, to which I have added my name, in order to pay tribute to the achievements of our country’s excellent boarding schools, which have been transformed so greatly for the better during my lifetime, and to support the measures proposed in these two amendments, which would exempt them from business rates on aspects of their work that are of great public benefit.

--- Later in debate ---

[Lord Khan of Burnley (Lab)]

My Lords, Amendments 70, 71, 72 and 72A, tabled by the noble Lord, Lord Storey, the noble Baronesses, Lady Barran and Lady Scott of Bybrook, and the noble Lords, Lord Black of Brentwood and Lord Lexden, are focused on the impact on state schools as a result of the Bill measure. They seek to require the Government to undertake a variety of assessments of the impact of Clause 5, covering between them: pupil movement; the impact on the state sector; partnerships between private and state schools; changes in staffing; and the availability of faith education to families which desire it. Furthermore, Amendment 72A from the noble Lord, Lord Black of Brentwood, seeks to ensure that any assessment is conducted in the context of broader tax changes affecting private schools since 1 January 2025, effectively seeking to create an all-encompassing review of the Budget tax changes and their effect on private schools.

The Government carefully considered their approach in designing the policy to remove charitable rate relief from private schools. On 29 July, the Government published a technical note on removing the VAT and business rates charitable relief tax breaks for private schools. The Government received and carefully considered over 17,000 responses to this note from a range of tax specialists, private schools, bodies that represent private schools and others. A detailed government response to this was published at the Autumn Budget. During development of these policies, the Government also met numerous key stakeholders representing schools, local authorities and, in the context of the VAT change, the devolved Governments. Furthermore, at the introduction of this Bill, the Government published a note setting out analysis of the impact of the business rates measure. This is available on the Bill’s page.

Two common themes in the amendments proposed are the impact on the state sector in pupil movements and partnership activity with private schools. As I have said previously, the Government estimate that in the long-run steady state, there will be 3,100 fewer pupils in the private sector as a result of the business rates measure. Of these 3,100 pupils, the Government estimate an increase of 2,900 pupils in the state sector in the long term. This represents approximately 0.03% of the total state sector pupil population.

The noble Baroness, Lady Pinnock, in particular, talked about the important point of SEND places. The Government work to support local authorities to ensure that every local area has sufficient places for all children of compulsory school age who need them, and work to provide appropriate support where pupils with SEND require a place at state-funded schools. She raised some really interesting points about reform. The Government are committed to reforming England’s SEND provision to improve outcomes and return the system to financial sustainability. We are providing an almost £1 billion uplift in high-needs funding in financial year 2025-26.

The noble Baronesses, Lady Pinnock and Lady Barran, both talked about whether regional variation with regard to pupil movement may arise as a result of the Bill measure. They said that some regions may be more affected than others. The Government work with local authorities to support place planning and ensure there is capacity in the state-funded sector to meet demand. We have confirmed nearly £1.5 billion of capital funding through the basic needs grant to create school spaces needed over the current and next two academic years, up to and including the academic year starting in September 2026.

As noble Lords know, all children of compulsory school age are entitled to a state-funded school place, and government support ensures that every local authority has sufficient places for children who need them. The Department for Education monitors place demand and capacity as part of its normal processes and will work with local authorities to meet any pressures. Data on the number of school pupils is published every summer. This provides information on the number of pupils at different types of school, so anyone can see how pupil numbers in state-funded schools and private schools have changed.

There have been suggestions that the cost of pupil moves from the private to the state sector will cancel out the revenue raised from the measure. Based on the average 2024-25 per pupil spending in England, the Government expect the revenue cost of pupils entering the state sector as a result of the measure to steadily increase to a peak of around £20 million per annum after several years. Overall, this means that the expected revenue will substantially outweigh the additional cost pressures.

Pupil numbers in schools fluctuate regularly for a number of reasons, and the school funding system in England is already set up to manage that. For individual schools, the Government therefore expect changes in pupil numbers caused by these changes to be managed in the usual way.

I have spoken only about business rates as that is the scope of the Bill. Noble Lords may also be interested in the impact of the removal of the VAT exemption, which has been mentioned. I direct them to the tax information and impact note that was produced to accompany the VAT change, which is publicly available on GOV.UK.

During the course of the Bill’s passage, we have heard a small number of examples of schools stating that they will reduce partnership activity with local state schools or will no longer be able to provide fee assistance. It is for individual private schools to determine how they manage any additional costs arising from the Bill’s measure. However, as set out previously, the Bill does not remove the charitable status of private schools, and they will need to continue to demonstrate public benefit as a requirement of that charitable status.

Data published by the Independent Schools Council indicates that a lot of partnerships relate to the hosting of joint events or providing access to facilities also used by private school pupils. In many of these partnerships, the activity undertaken also benefits the pupils who attend private schools, so it would not be in the interest of the private schools to stop this activity. The removal of charitable relief from private schools does not reduce these schools’ obligation to show public benefit. The Government do not expect partnership activity or fee assistance to decrease significantly.

I will touch briefly on the other areas that noble Lords have suggested should be examined, starting with looked-after children. Local authorities can place looked-after children at private schools where that is in the child’s interest. We do not expect placements funded by local authorities to be impacted by tax changes, as the local authorities can reclaim VAT. As with partnerships, we do not expect charitable schools to stop supporting these pupils as part of their demonstration of public benefit.

Faith has been a common discussion point in not just this group but earlier groups of amendments. As discussed earlier, on a previous group, the Government value parental choice and recognise that some parents want their children to be educated in a school with a particular faith ethos. Do I know that? Yes, I am the Faith Minister. Many stakeholders have been speaking to me about this issue. Pupils who follow a particular faith can be accommodated in the state sector. All children of compulsory school age are entitled to a state-funded school place if they need one and, as previously stated, all schools must comply with their obligations under the Equality Act 2010. In addition, schools are expected to promote fundamental British values, including the values of mutual respect and tolerance for those with different faiths and beliefs.

On the issue of staffing, the Department for Education annually publishes teacher numbers in private schools. Employment of staff is a matter for individual private schools. We do not anticipate that they will substantially reduce staff as a result of the business rates measure.

I appreciate that there is concern in this area, but we should remember that the removal of charitable relief from private schools will raise important revenue that will help the Government to deliver on their commitment to the cohort of the more than 90% of children who attend state schools. This will break down barriers and ensure that all have access to the same opportunities.

I am unable to accept the amendments, but I hope that the further information I have provided, in relation to the analysis and assessment from the Government that have already been undertaken and that we will continue to do, has reassured noble Lords. I hope that the noble Baroness, Lady Pinnock, feels able to withdraw her amendment.

[Lord Lexden (Con)]

The Minister has spoken at length about the Government’s hopes, intentions and plans. Surely, having done all that, it becomes more important to find out what happens in reality over the next few years: how independent schools are affected and how many children have their education disrupted. These matters need to be clearly established, and that surely points to a proper and full impact assessment.

[Lord Khan of Burnley (Lab)]

My Lords, I take the point that the noble Lord had made very strongly and passionately. In relation to this particular aspect and in contrast to the earlier part of our discussion in Committee related to multipliers, this is not a tax-particular perspective, which is why an impact note for the Bill is available. Of course, we are speaking to stakeholders and will continue to do so to ensure that we take everything into account. We have taken everything in account while bringing this Bill forward.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Lexden Excerpts

Report stage
Tuesday 18th March 2025 Lords Chamber

Moved by

[Lord Lexden]

25: Clause 5, page 5, line 39, leave out “for whom an EHC plan is maintained” and insert “with special educational needs and disabilities, as defined in the Children and Families Act 2014”
Member's explanatory statement
This amendment seeks to expand the exemption of schools beyond those catering for EHCP pupils, to all those wholly or mainly organised for SEND education.

[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.

--- Later in debate ---

[Lord Lexden (Con)]

My Lords, in accordance with the custom, I thank all those who have spoken in favour of the amendments in this group. A powerful case has been made for exempting independent schools with charitable status in respect of certain parts of the valuable work they do, such as special needs education, music and sport. It is an utter tragedy that the Government cannot see that case.

I note that, in the course of his remarks, the Minister said not one word of appreciation for and thanks to the independent schools for the enormous role they play in the education system. It may be 7%, but it is a very important contribution. With that, I beg leave to withdraw my amendment.

Amendment 25 withdrawn.

Non-Domestic Rating (Multipliers and Private Schools) Bill)

Lord Lexden Excerpts

Consideration of Commons amendments and / or reasons
Wednesday 26th March 2025 Lords Chamber

This is a matter which we consider Parliament should decide on the face of the Bill. That is what the Bill does and moving these measures to a power in the way suggested by the amendments under Motion Q1 is, we consider, not appropriate. For these reasons and the other reasons that I have already set out, I respectfully ask noble Lords not to press their Motions containing Amendments 15B to 15E.

[Lord Lexden (Con)]

Will the Minister confirm clearly that, through this measure, the country will obtain, for the first time ever, a two-tier charitable system? That is what he appeared to accept. This must be thoroughly undesirable. To remove a set of arrangements that independent schools, the vast majority of them very small schools, have enjoyed over centuries and to create two tiers must be a thoroughly retrograde step. To describe the exemptions that independent schools, like all other charities, have hitherto enjoyed as “tax breaks” is deeply unfair. Independent schools have been properly treated, along with other charities, for centuries—a position that ought to endure—and it is really shameful, given that independent schools are overwhelmingly small and cannot bear these burdens, for this state of affairs now to come into existence as a consequence of this legislation.

[Lord Khan of Burnley (Lab)]

Noble Lords will not be surprised to hear that I disagree with the noble Lord. We are putting the Bill through because we, as the Government, want to deliver on our commitments and break down barriers to opportunity for all. Ninety-three per cent of students are in the state sector. The measures are necessary, tough decisions. We know they are tough choices, but they are necessary to make sure that we can support the state sector, where 93% of students attend.

Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Lexden Excerpts

Consideration of Commons amendments and / or reasons
Tuesday 1st April 2025 Lords Chamber

[Lord Thurlow (CB)]

My Lords, it has been an interesting and lively debate through all its stages, covering the many aspects of the broad landscape of this Bill. I thank all who took part and supported my amendments from across the House right through to this final stage. I add my thanks to the Minister and his team, who have spent a good deal of time on a number of occasions, willing to engage with me to try to find compromise and a way through the complicated and difficult elements of the Bill, which have become quite technical and needed a deep dive.

I feel a sense of real regret. The Government have missed a real opportunity to deal once and for all with the injustices heaped on the small high-street retailers, which continue to subsidise the rates paid by these mammoth non-high-street retail fulfilment centres: the internet operators exclusively—not the ones on the high street that have fulfilment centres but the ones that are not on the high street. It is tragic that this opportunity has been missed. It is a wrong that the Bill could have put right. The Minister’s proposals address aspects of this, but possibly not for many years to come. The digitisation process of non-domestic rates, which we have discussed, is in hand and planned for 2028, but I wonder whether, like many other government initiatives, it will take many years longer than expected. What a waste. It was not too difficult—an opportunity missed.

It is not my desire to prolong the debate, notwithstanding the reasons cited for refusal in the other place, which left the door open. I think we have done enough, and HMG should not be frustrated in their manifesto items. I thank the Minister for his opportunity to continue a dialogue going forward, which I would like to engage in if I have not been put in front of the firing squad as a hereditary before that time comes. I will not press my amendment.

[Lord Lexden (Con)]

My Lords, I will say a few words about independent schools. Throughout, the Government’s position has been in essence that we have to take away—they say—some of the resources of 7% of our country’s schools to enable 93% to make improvements. State schools will gain little or nothing from Labour’s tax raid, which will simply harm independent schools. Throughout our debates, I have tried to provide a voice for small independent schools, as president of the Independent Schools Association, whose 720 members are, for the most part, cherished small local schools. As I have said several times, 40% of independent schools have under 100 pupils. Their future is now in jeopardy, thanks to this Government. Ministers will be held to account here in Parliament and in the country at large for the damage their policies will do to these schools, which contribute so richly to our communities in spheres such as special needs, music, the arts and sport, as I and a number of noble friends have shown in these debates. Labour’s discriminatory tax burdens threaten their very survival.

[Lord Khan of Burnley (Lab)]

My Lords, I thank all noble Lords who took part in this short debate, as well as all those who have dedicated their time and efforts to scrutinising this Bill. I am especially thankful to the noble Baronesses, Lady Barran, Lady Pinnock and Lady Scott of Bybrook, the noble Lords, Lord Fox, Lord Jamieson, Lord Thurlow, Lord Moynihan, Lord Lexden, Lord Black of Brentwood, Lord Storey and Lord Shipley, and the noble Earl, Lord Lytton. The time and consideration noble Lords have given to this Bill are greatly appreciated and, while I acknowledge that it is not always possible to see eye to eye, I hope they understand the appreciation I have for their efforts and expertise. I am grateful to the noble Baronesses, Lady Barran, Lady Pinnock and Lady Scott, and the noble Lord, Lord Thurlow, for their agreement not to insist on these amendments.

Through the Bill, we are beginning to deliver on our ambition to transform the business rates system. In taking our first vital step on that path, we are ensuring a sustainable, funded, permanent tax cut for retail, hospitality and leisure properties that will be provided from April 2026. Furthermore, the Government are delivering on their commitment to break down barriers to opportunity by removing the business rates charitable relief from private schools, to help raise vital revenue to support the delivery of the Government’s commitments to education and young people. I am aware that the noble Baroness does not agree with the Government on this matter, but I hope she understands our position, and that it is vital that we take the tough but necessary decisions to ensure that the same opportunities are afforded to all children, regardless of where they come from or their financial background.

The noble Baroness, Lady Pinnock, invited me to write a letter on a question. I am going to reject that invitation because I have the answer for her now. She asked specifically about the powers to exclude classes of properties from the higher multiplier if we wanted to in future. We have the powers in Clause 3. Specifically, the powers referred to in that clause allow us to exclude classes of hereditaments from the higher multiplier.

I thank the noble Lord, Lord Thurlow, for his remarks. I am aware that he is concerned about the timetable for the digitalising business rates project. The solution to that problem lies in the linking of business and property data, and in the project itself. I look forward to engaging with the noble Lord, along with officials. Once again, I thank him and all noble Lords for not insisting on their amendments.