Mansion House Accord

Richard Tice Excerpts

Tuesday 13th May 2025 Commons Chamber

[Torsten Bell]

My hon. Friend is completely right, but I would use a slightly more optimistic tone. It is now the settled consensus of the entire defined-contribution industry that this is the direction we need to move in. Almost every single scheme is moving to thinking about how they will invest in a wider range of private assets. Many of them are looking to go further than the benchmark set out in the accord today. They want to do that because it is in their savers’ interests. It diversifies their assets and, over the longer term, leads to higher returns on average. The exact amount of those returns will obviously depend, but studies show that it ranges from 2% to 12% higher returns. It is absolutely in savers’ interests, and I think there is a broad consensus about doing that.

My hon. Friend is also right to say that we need to make sure that change happens. We will come forward in the pension schemes Bill with more details about how these developments will be monitored to make sure that change is delivered, because in the end, what the British people want to see is less talking about this and more actual investment.

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

Pension funds are, by definition, long-term capital and are therefore particularly well suited to being invested in long-term infrastructure. British pension funds investing in British infrastructure should be welcomed by us all, but I would caution against any specific mandating within sectors, which I fear may lead to lower performance. The thing about private markets is that they have almost no transparency in terms of valuation and liquidity. I urge the Government to encourage the pension funds voluntarily to be more open about how they value these private investments, to ensure greater confidence.

[Torsten Bell]

I thank the hon. Member for what I think is his support for the accord—

[Richard Tice]

indicated assent.

[Torsten Bell]

He is nodding, so I will take that as support. He will worry that he sounds dangerously like a Liberal Democrat when he sits on the fence as much as he just did. At least the shadow Chancellor has the guts to say he opposes it, because he thinks that that is simple politics to get him through the day. I am glad to see that the hon. Member has not learned enough, and I hope he enjoys the fence sitting while it lasts.

The hon. Member is right to say that schemes will want to be transparent about their asset allocation, partly so that savers can see what is going on, but also, to refer back to the question from my hon. Friend the Member for Buckingham and Bletchley (Callum Anderson), so that the country as a whole can see that progress is being made.

Independent Schools: VAT and Business Rates Relief

Richard Tice Excerpts

Monday 3rd March 2025 Westminster Hall

[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.

--- Later in debate ---

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

It is a pleasure to serve under your chairmanship, Mr Vickers. I congratulate the hon. Member for Berwickshire, Roxburgh and Selkirk (John Lamont) on securing this debate on the back of the petitioners.

[Mrs Emma Lewell-Buck in the Chair]

How many of us were elected to this great place to damage the prospects of our children? I would hope that the answer is none, but that is the direct consequence of this ludicrous policy to tax education. I think we are the only country in the developed world to do so. The unintended consequences are truly shocking. Within a fortnight of the policy coming into force at the beginning of this year, some four schools announced they were closing this summer—over 1,000 children were immediately plunged into uncertainty about where they were going to school and who were going to be their friends. The anxiety that that put on them as children, let alone their parents, should shame everybody in the Government. Tens of thousands of pupils will end up leaving the independent sector—and it is independent, not private, because most independent schools are charities that reinvest their surpluses.

[Dr Arthur]

I have independent schools in my constituency, and the challenges we face with this policy are real, but the numbers people are citing make it difficult to talk about those challenges. People have said that tens of thousands of students are going to move from the independent sector to the state sector, but I do not think anybody really thinks that is going to happen. Those sorts of numbers make it really difficult to have a serious debate about this issue. Does the hon. Gentleman agree that “tens of thousands of students” is perhaps at the upper end of estimates?

[Richard Tice]

I am grateful to the hon. Gentleman, because he has reminded me to declare a historical interest. Not only did I have children in independent schools, but I was the chairman of the finance and general purposes committee for a significant independent school over the past six or seven years; I finished just before the election. Even when this policy was announced as a prospect, I saw an immediate drop-off in applications for places at that school, so I can confirm with absolute experience that tens and tens of thousands, if not 100,000, will leave the sector.

Surely, of all children, those whose prospects we want least of all to damage are those with special educational needs, yet that is where the independent sector excels. Let me give a small example from the county of Lincolnshire. I got a letter from a constituent who can no longer afford to send two children, both with special educational needs, to the independent school. They are going to have to go into the state sector, where there is a capacity crisis that we keep hearing about in the Commons. Because of the distance, she cannot provide the travel, so the county council has to provide it. For those two children alone, the annual cost of taxis is £20,000 per child. This is absolute insanity, I would respectfully suggest, Mrs Lewell-Buck—it is lovely to see you.

So we have damage to children and the worst of all worlds. Then we look at the prospects of children in the state sector, and we hear that the policy is going to pay for 6,500 teachers. That is about one teacher in every four or five schools—three, it is thought, in the secondary sector. Seriously? When we look at the extra children who will go into the state sector—the tens and tens of thousands—we see that actually there will be more pressure on existing class sizes and the existing teachers, who will therefore be able to dedicate less time per child in their existing school. The prospects of children are damaged not just across the independent sector, but across the whole of the state sector, under this deeply misguided policy.

I touched earlier on the cost. When the policy was announced, it was to raise £1.5 billion, and suddenly it is £1.8 billion. I suggest it will raise the square root of net zero. The reality is that schools will be recovering input costs, including on capital schemes. The reality is that schools will be losing children to the state sector. The reality is that bursaries will have to be slashed. We have heard about some schools giving hundreds of free places. All these things will put extra costs on to the state sector—the state schools—as well as the pressures on county councils’ taxi budgets, which is ludicrous.

From an educational-quality point of view the policy makes no sense, and from a cost point of view it makes no sense. There was an opportunity for the Government to say, “You in the independent sector are doing some things really well, particularly with regard to special educational needs, so we would like the independent sector to help us a bit more—share some of your expertise. Can you give some more places for special educational needs?” That was the opportunity, and I can tell Members that the independent sector would have welcomed with open arms a request to share expertise with local schools. That would have been the right thing to do to improve the prospects for everybody.

The other right thing to do to improve the prospects for everybody was to adopt the Reform UK policy during the general election, which was to say, “If you can afford to pay a bit more, we encourage you to take your children out of the state sector and into the independent sector,” and to relieve the pressure on class sizes by granting tax relief at the basic rate for those who sent their children to independent schools. That would have improved the prospects for everybody.

Those were the opportunities, but instead we have seen deep ideological socialism, with no evidence whatsoever that the policy will make any difference. It is discriminatory, because if it was logical, the Government would be applying VAT on university fees, because of course universities are elitist. Three or four in 10 youngsters go to university, so surely the same policy should be applied to universities.

Will the Minister confirm that if, when the legal cases go all the way up to the European Court of Human Rights—which some people love and some of us do not—the ruling from that court is that the policy is unlawful, the Government will agree with that ruling and apply it? This policy has no logic whatsoever. It is a tragedy for us all, but most importantly it is an absolute tragedy for children.