Independent School Fees: VAT

Debate between Neil Hudson and Andrew Lewer

Wednesday 21st February 2024 Westminster Hall

[Andrew Lewer (Northampton South) (Con)]

I beg to move,

That this House has considered independent school fees and VAT.

It is a great pleasure to serve under your chairmanship, Mr Henderson—I think for the first time. I put on the record my thanks to the Independent Schools Council and its superb chief executive Julie Robinson, not only for the tireless campaigning that it does for the independent education sector but for its work as the secretariat for the all-party parliamentary group on independent education. I have been the chair of that group since founding it in 2017, after moving from being an MEP to an MP. A number of independent schools serve my constituents, including Quinton House, Bosworth School, Northampton High School for Girls and OneSchool Global.

More than 600,000 children are educated in the independent schools sector in the UK, saving UK taxpayers more than £4 billion each year because those pupils are not educated in the state sector. In addition, the independent sector has a total economic footprint that amounts to £16.5 billion, supporting 328,000 jobs and £5.1 billion in tax revenue. Why is it that the sector often gets bad press, despite its contribution to society both economically and educationally? For many people, when they hear the terms “independent school” or “private school”, they immediately associate them with elitism, isolation and privilege. Nothing could be further from the truth. Independent schools today are modern, diverse and inclusive places that often provide education and specialist provision where the state sector does not go. Furthermore, independent schools are more connected to society now than ever before, working with the state sector in partnerships and widening access through bursaries.

[Dr Neil Hudson (Penrith and The Border) (Con)]

I congratulate my hon. Friend on securing this really important debate. Our independent schools do vital outreach work with access bursaries and access to sports facilities. Many hard-working families up and down the land make huge sacrifices saving to send their children to independent schools. Does my hon. Friend agree that the short-sighted Labour policy on VAT on independent schools will compromise these schools, force some parents to take their children out of them, and ultimately put more pressure on our local state schools?

[Andrew Lewer]

I thank my hon. Friend for that question, which is indeed the major thrust of what I have to say. As chair of the all-party group, I am delighted every year to sponsor the Independent Schools Council’s annual “Celebrating Partnerships” report, which gives parliamentarians and stakeholders from across the sector the opportunity to come together to celebrate the fantastic work that the independent sector does in partnership. Three quarters of independent schools are now in partnerships with state schools. That is not the old swimming pool every other Tuesday afternoon for an hour or two; they are embedded, mutually beneficial partnerships.

Given how influential and impactful the sector is for wider society, it is in disappointment that I stand in opposition to the Labour party’s policy position on independent education—the introduction of a 20% VAT fee on independent school fees. I urge the current Government and my Conservative party colleagues to be robust in their stance of not imposing VAT on school fees. I look forward to the Minister’s analysis of that, but given that the Opposition are currently well ahead in the polls, and it is at least possible that they could form a Government in the next Parliament, it is important that this debate has been granted. It is important that we take the time to scrutinise what I believe is an ill-thought-out policy. Although I welcome the fact that Labour’s plans for independent education under the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) are not as draconian, undemocratic and questionable in law as they were when he served in the shadow Cabinet of the right hon. Member for Islington North (Jeremy Corbyn)—when it looked like the party was trying to abolish the sector entirely—they are still very worrying indeed.

The principle of parental choice is supported by article 2 of the first protocol of the European convention on human rights, which was incorporated into domestic law by the Human Rights Act 1998. It says that

“the State shall respect the right of parents to ensure such education and teaching in conformity with their own religious and philosophical convictions.”

However, is that right to choose being assisted, if said choice is made increasingly difficult by a huge tax rise? I do not think it is. It is also a fundamental principle that we do not tax the supply of education, and the Value Added Tax Act 1994 exempts education, including nurseries and universities, alongside independent schools. That principle is international in scope and the UK would be an outlier if Labour abandoned that policy. For example, EU nations, Australia and the USA do not apply sales taxes to education.

Beyond the core principles, there are many reasons why the policy could be harmful and doomed to fail. First, parents residing in the UK who make the decision to send their children to independent schools already contribute to the state education sector by paying their fair share of taxes. I have made that very clear in the Main Chamber when debating this subject, and the repeated use of terms such as “tax breaks” and “tax reliefs” should be avoided. Independent schools are taxed in the same way as other education providers and charities, and they provide more than £5 billion in tax annually, which is more than three times what Labour thinks it will raise from VAT. UK parents who pay school fees do so from already taxed income.

Now that the Labour party has put this policy forward, I am sure we will hear today that it has done so because it believes in educational excellence for everyone and not a reserved few. However, by introducing the policy a Labour Government would simply make independent schools even more elite than Labour already perceives them to be by pricing out hard-working parents who can just about afford to pay the fees to invest in their children’s futures. Those who can easily absorb the 20% will do so, and perhaps that is what the Labour party wants: to make private schools more elite so that it is more difficult for politicians like me to make the case for them.

I will use the jacuzzi and private jet analogy to demonstrate my point. Many of us will never have a jacuzzi in our gardens, but could probably afford to install one if we chose to do so. On the other hand, a private jet is, for virtually everyone, an unobtainable fantasy for a distant elite with no connection to our lives. That is what Labour wants independent education to be—the private jet, not the jacuzzi. Of course, that is purely figurative as a parallel and not related to the crucial importance of educational choice.

It has been said that these are not issues we should worry about, and that independent schools can simply absorb the VAT increase so that they do not pass it on to parents. That is a naive view, with many independent schools up and down the country being very small, operating on tight margins and unable to do that. A quarter of all schools in the Independent Schools Council have fewer than 155 pupils. They are not wealthy institutions that are able to absorb VAT.

Vaping: Under-18s

Debate between Neil Hudson and Andrew Lewer

Tuesday 2nd May 2023 Westminster Hall

[Dr Hudson]

I agree. That is exactly right: there is a paucity of data. I will ask the Government and the Department of Health and Social Care to create the datasets so that we can make evidence-based decisions.

Concerningly, ASH Scotland suggests that children with mental health issues including mood disorders and eating disorders, who are among the most vulnerable people in society, are potentially more likely to use vapes. That is a real concern. I am passionate about mental health, especially among our young people, and I urge the Government to continue to protect the most vulnerable. That has been the hallmark of this compassionate Conservative Government.

Anecdotally, we hear much about the impact of these products. We hear reports of children’s sleep patterns being disrupted. They set their alarms for 2 o’clock or 3 o’clock in the morning so that they can vape in the middle of the night to avoid withdrawal symptoms the next day. At school, there have been reports of students leaving lessons and even walking out of examinations because they simply cannot last without the use of a vape. If vaping is having a detrimental impact on our young children’s life chances, this is a matter not merely of health but of social and educational development. One teacher in my constituency noted that the issue is so widespread that vapes are being illicitly traded in the school playground.

I want to touch on the marketing of vapes to under-18s, as colleagues have done. A particular issue with the vaping market is the flagrant targeting of under-18s as potential consumers through trendy advertising on social media. Products are promoted with bright colours and inviting fruit flavours—sweet flavours such as mango, bubblegum and cherry ice.

[Andrew Lewer (Northampton South) (Con)]

The Office for Health Improvement and Disparities annual review of vaping reveals that 39% of ex-smokers use fruit-flavoured vapes, against 17% who use tobacco. There absolutely are issues with marketing, advertising and presentation to young people, but does my hon. Friend agree that an overly simplistic blanket ban of flavours might have the serious unintended consequence of preventing some potential vapers from vaping, meaning that they would carry on smoking and thus massively increasing their chances of an early death?

[Dr Hudson]

Again, this is about the differentiation between adult use of vaping products and young people’s use of vaping products.