Non-Domestic Rating (Multipliers and Private Schools) Bill

Lord Weir of Ballyholme Excerpts

Report stage
Tuesday 18th March 2025 Lords Chamber

[Lord Weir of Ballyholme (DUP)]

My Lords, I shall speak briefly on these amendments. The best way forward is probably Amendment 30 in the next group, which is a cleaner way of dealing with this. I would sit a little uncomfortably with the idea of placing additional financial burdens on schools, although I understand the rationale that the Government have put forward for these changes.

The concern is that any analysis that has been done, particularly from the financial point of view, might suggest that this is perhaps a more minor element of the changes that are proposed as regards independent schools. However, there is a grave concern that the cumulative effect of this change, along with the national insurance and particularly the VAT contributions, is likely to lead to the closure of a number of schools. This is not unprecedented; I have seen it happen through various changes in other parts of the United Kingdom. As such, while this is perhaps the smallest element of those three changes, it could potentially become the tipping point for a range of schools.

Let us deal specifically with the two main amendments in this group: Amendment 25, from the noble Lord, Lord Lexden, and the amendment on sport in the name of the noble Lord, Lord Moynihan. There has been an explosion in the number of young people diagnosed with special educational needs throughout the United Kingdom, and there is much greater pressure, sometimes for very virtuous reasons. For example, we see that some children with particular physical disabilities, who many years ago would, sadly, have had a very low life expectancy, are now able to live into adulthood and, indeed, live a full life. That is something for us all to celebrate. However, there has been a massive increase in the number of children with special educational needs.

For many years, my part of the United Kingdom, Northern Ireland, has tended to have much higher levels of special educational needs, and there may be an argument that other parts of the country are almost playing catch-up with Northern Ireland. But I can give your Lordships an indication that we should not be naive and believe that we will reach a plateau as regards those with needs that have to be catered for. Even in Northern Ireland over the last five, 10 or 15 years, those numbers have gone up and up, and there is no doubt that that situation will be replicated in the different parts of the United Kingdom.

With this comes increasing pressure to find appropriate educational settings for those many children. Again, judging from my experience, within the state sector that creates increasing pressures, where schools that perhaps have not been doing so before are having to provide specialist classes. The local authorities—in Northern Ireland’s case, the Education Authority—are having to scramble around to try to find where they can provide additional facilities.

In the Northern Ireland context, there is not a sizeable independent sector, but particularly in England the independent sector plays an important role in providing a level of specialist support for many of those children with special educational needs. It provides a certain level of safety valve in reducing the pressure within the system. I doubt this is the Government’s intention, but if we inadvertently create a situation where a number of these schools are forced to close, that will ratchet up further pressure within the state system at a time when we are already facing a tsunami of pressures, as has been identified by a number of noble Lords. The VAT exemption put forward by the noble Lord, Lord Lexdenm seems to be a sensible way forward, because the placing of that additional burden, which will almost inevitably lead to further closures, will be counterproductive to our young people as regards special educational needs.

Similarly, although the case is perhaps a little less acute as regards sport, accusations can be made of Governments of different political persuasions, over many years and decades, who have not been able to provide the level of sporting facilities in this country that our young people merit. We all glory in the great sporting triumphs of this nation, but, quite often, such triumphs have occurred in spite of the facilities in place rather than because of them.

Going back many years to Prime Minister John Major, he spoke of the need to open up fields and sporting facilities, but there was not the level of success that we should perhaps have seen. It strikes me that, if we do not have some level of exemption for our sports fields when it comes to rating purposes, we are simply accelerating the process by which many of those facilities will become no longer viable.

When schools find themselves in financial difficulty, it is about seeing what assets they have and what they can get rid of. Sport, unfortunately, is quite often seen as an extra and as an easy thing to cut, but that has a detrimental impact. What particularly persuades me towards the amendment from the noble Lord, Lord Moynihan, is that it ties this in with community use. These facilities should not be castles shining on the hill, to which no one can gain admission. The partnership that should always be there between schools and the community must be at the heart of what we seek to do, no more so than in the issue of sport.

As such, whatever the Government’s intentions in relation to these changes, without some level of amendment, either through this group or the group beginning with Amendment 30, we will be taking a retrograde step, for both sports and special educational needs.

[Baroness Barran (Con)]

My Lords, I will speak to my Amendments 26 and 28 in this group. I also support Amendment 25. in the names of my noble friends Lord Lexden and Lord Black of Brentwood, and Amendments 27 and 29, in the name of my noble friend Lord Moynihan.

Amendment 26, in my name and that of my noble friend Lord Black, raises again the issue of schools that are wholly or mainly concerned with providing full-time education for gifted arts students, such as those who are part of the Government’s Music and Dance Scheme. My noble friend rightly pointed out the importance of this group of students for our economic growth. They are students who attend an independent school based solely on their natural talents, and whose parents, where they are on a lower income, are means tested.

This was debated at length in relation to the imposition of VAT on these schools. The Government need to show, first, that they understand the issues that face such schools and their pupils, and, secondly, that they want to preserve these globally respected and admired institutions, without which our country would be much the poorer.

In his letter to me, for which I thank him, the Minister pointed out that there will be no impact from the increase of VAT on the fees paid by parents. To be clear, my understanding is that that is just for this academic year; if I have misunderstood, perhaps the Minister could clarify when he comes to speak.

I believe that my point still stands: the parents of gifted children whose income is means tested will pay more in future for their children’s education because of the VAT changes beyond this academic year and because of the changes proposed in the Bill. That risks excluding some of our most gifted children from the education that they need to realise their potential.

--- Later in debate ---

[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.

[Lord Weir of Ballyholme (DUP)]

My Lords, again, I support the amendments in this group. Perhaps I should clarify for the Minister that I do so, to paraphrase something said in a different context, on the basis of being without a directly selfish economic or strategic interest in the issue. Let me highlight why I say that, in coming from a background of education in Northern Ireland.

This provision does not affect Northern Ireland, as the Minister rightly pointed out; it is an English-only matter, because all these aspects are devolved issues. Consequently, from that point of view, it will not impact on any of my former constituents in that regard, nor indeed on Northern Ireland. We have a strange patchwork of school types across the United Kingdom in our delivery of education. Northern Ireland’s background is largely one in which the independent sector is extremely small. Indeed, you could make an argument, particularly at post-primary level, that on the definition of what most people would regard as independent schools, there is perhaps one independent school in Northern Ireland that is directly akin to those in England.

I am trying to look at this as objectively as possible, but from that point of view there are three main reasons why these amendments need to be supported. First, the prospect of imposing additional burdens and taxation on schools sits deeply uncomfortably with me. The idea of penalising parents by saying, “Because of the educational choice that you are making, we are going to single out your schools for an additional financial burden to tax education” is fundamentally wrong.

Secondly, there is at least a perception—I am sure the Government would deny it—that this is a highly ideologically driven proposal and part of a wider set of seeming attacks on independent schools, as seen particularly by the changes in VAT. As such, there is a concern that, rather than looking at what is of educational benefit, this is some red meat being thrown out to some ideological Labour supporters. It is an easy target to go after.

The third reason is that of unintended consequences. We are asked to look at different figures and projections as to the impact that these various changes will make. As I highlighted in the previous group, this is perhaps a less significant change than the changes to VAT, but again, it will have a level of tipping impact and lead to the closure of schools. This is not mere theory.

If I may draw on an example of relatively recent history in Northern Ireland, roughly 12 years ago, the then Minister of Education, who was a member of Sinn Féin, made changes to a level of funding that was available to preparatory schools in Northern Ireland. In those circumstances, the vast majority of fees were paid by parents and the schools were largely supported directly by them; it was at least 70%-plus. The state paid a small proportion of what would normally go to support children in state schools. There was a significant cut made to that. It was not completely wiped off the face of it, for the reason that the then Minister would have had to bring it to get executive approval had it done so. The arguments used were that it was some sort of financial benefit, which could then be ploughed back into state education, so it was an egalitarian move.

What was the ultimate impact of that? For many of those schools which were already under a level of financial burden, it became the final nail in their financial coffin, with the end result that, 12 years on, the number of prep schools in Northern Ireland has gone down by just over a third and the number of pupils going to those prep schools is down by more than 40%. That single move made a number of those schools unsustainable.