Independent School Fees: VAT

Robin Walker Excerpts

Wednesday 21st February 2024 Westminster Hall

[Mr Robin Walker (Worcester) (Con)]

I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this important debate. I speak in my capacity as the Chair of the Education Committee.

This is slightly awkward, because we do not, of course, look at policy proposals that are not from the Government. However, we had a debate about a year ago in the Chamber of the House of Commons where the Labour party proposed to bypass my Committee and appoint their own to look at this policy proposal. What was interesting in that debate, as in this one, was how few Labour Back Benchers turned up to support what is supposed to be their flagship policy. This issue has not been raised by any of the Labour members of the Education Committee during my time as Chairman. In the circumstances, I find that very surprising.

I am concerned about this issue primarily because of its impact on our publicly funded schools. I seriously worry that Labour has not done its sums properly and has not brought the impact of the £6,000 a year required for the revenue funding, let alone the capital expense of expanding those schools, into its calculations. My county council is in the process of commissioning a £40 million secondary school to meet the demand for places that we already have. No calculation appears to have been conducted of what the cost would be of the extra places required by this policy.

When it comes to SEND, I expect the Labour Front-Bench spokesman to say that Labour will exempt specialist settings from its VAT proposals. I certainly hope that that is the case, and that is what was indicated in our previous debate. However, I do not think that the revenue calculations carried out by the Treasury some years ago on the basis of imposing 20% VAT on all charges for independent schools have taken that into account. I would love it if the Labour spokesman could update us today on what reduction in income Labour expects if it does exempt specialist settings from this policy and on whether that will apply to all of them, including the alternative provision settings that my hon. Friend the Member for Ruislip, Northwood and Pinner (David Simmonds) referred to. I recently visited one at the Gloverspiece Mini Farm in the constituency of my hon. Friend the Member for Mid Worcestershire (Nigel Huddleston), which would like the assurance that it will not be clobbered by a 20% increase in VAT and in fees.

When it comes to SEND pupils, we are talking not just about those in specialist settings. Many of my mainstream independent schools in Worcester provide support to pupils who have identified special educational needs but not an EHCP. If those people are driven out of the independent sector by higher fees, they are likely to seek EHCPs, putting pressure on our health system and our local authorities, which are already overloaded—I will campaign, along with colleagues, to try to increase the resources for them.

As Chairman of the Education Committee, I want our state education system to be one of the best in the world—it already is, but we can make it even better. We should focus on doing that, rather than on creating the misleading impression that clobbering the independent sector by imposing VAT, which no Labour Government in the last century have ever proposed to introduce, and which none of our European or English-speaking peers apply to independent education, is somehow the solution.

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[Helen Hayes]

I will not give way again. It would provide a loophole that schools could use to evade the policy.

The share of pupils being educated in private schools has consistently remained around 6% to 7%, despite fees increasing above inflation year on year for many years. Indeed, independent school fees are 55% higher in real terms now than 20 years ago. Although we do not believe the scaremongering that there will be an exodus of pupils into the state sector, our state schools would be able to cope with an increase in their numbers. Across England, overall pupil numbers are due to decline by at least 100,000 per year until 2030; the total drop is higher than the number of children currently attending private schools.

[Mr Robin Walker]

Will the hon. Member give way on that point?

[Helen Hayes]

I give way to the Chair of the Select Committee.

[Mr Walker]

That is very kind; I am grateful to the hon. Member for giving way. I just want to make the point that, yes, the overall numbers are declining, but that is primarily in primary. The demographic bulge, as she well knows, is coming through into secondary schools, and secondary schools in many areas of the country are full. How does the Labour party plan to deal with that?

[Helen Hayes]

As the hon. Member rightly points out, what happens in primary flows into secondary, so secondary schools across the country, including secondary schools in my constituency, are absolutely aware of the drop in numbers that is coming down the track, and we are seeing secondary schools in London closing—two of them this year—because that flow is starting to affect them.

The Labour party believes in parental choice, but the conversation today has to take place with fairness in mind. In 2022-23, average independent school fees were £15,200, but average state school spending per pupil was £8,000. The gap in funding between independent and state school spending has more than doubled since 2010. With the £1.3 billion of funding that would be raised each year from our measure, we could significantly increase school spending, allowing the Government to drive high standards across our state schools too. The Government are consistently missing their targets for teacher recruitment and face teachers leaving the profession in droves. We would use that money to recruit and retain more than 6,500 additional teachers.

There is considerable evidence of the need to improve and the benefit from improving teacher training, so Labour will work with schools to deliver a teacher training entitlement, throughout every stage of a teacher’s career, to deliver evidence-based, high-quality professional development.

We need to look again at school inspection and improvement—