Independent School Fees: VAT

Sally-Ann Hart Excerpts

Wednesday 21st February 2024 Westminster Hall

[Sally-Ann Hart (Hastings and Rye) (Con)]

It is a pleasure to serve under your chairmanship, Mr Henderson. I congratulate my hon. Friend the Member for Northampton South (Andrew Lewer) on securing this important debate.

Labour’s plans to charge VAT and end business rate relief for independent schools is based on the politics of envy, from a party that wants to crush aspiration and ambition. Labour says its primary motivation is to generate revenue to invest in the state education system and that the policy might raise £1.7 billion for that purpose. Well, Labour had better get building more schools, because it intends to implement the policy as soon as the right hon. and learned Member for Holborn and St Pancras (Keir Starmer) enters Downing Street, with no consultation or risk analysis. What a nonsense. The policy will harm both the state and the independent sector, and there will be an exodus of pupils into an increasingly stretched state system, with some independent schools closing altogether.

We must not trust Labour with our schools. About 12 years ago, the OECD “Education at a Glance” report found that expenditure on schools as a percentage of GDP increased from 3.6% in 1995 to 4.5% in 2009. The OECD average was 4%. Billions of pounds of spending went into schools under the last Labour Government, but that huge increase in spending led to no improvement in student learning outcomes. UK teenagers slipped down the league tables in crucial subjects, while our schools became the most segregated in the world, with Britain’s immigrant children clustered in the most disadvantaged schools. Primary school class sizes were bigger only in places such as Turkey and Chile, and there was an alarming rise in children not in education, employment or training. Taxpayers failed to get value for money and Labour’s policies had little impact.

Labour will never understand that it is not just about money; it is about leadership and structure. We have some amazing headteachers in Hastings and Rye. I will not name them, but they know who they are, and they work best with the support of positive and effective Government policy, and with the support of their academy trusts. In Hastings and Rye, 32% of schools were rated as being good or outstanding in 2010, compared with 82% in 2022. There is more work to do, but it can be done, as we have seen from the Conservative Government’s record, without destroying our valuable independent sector.

I have two independent schools in my beautiful constituency of Hastings and Rye: Claremont and Buckswood. Buckswood boards about 50 pupils from 48 different countries and has 200 local day-school pupils. Both schools have lower fees for local children, and they have a diverse mix of children, which contributes to a rich cultural environment—one that would not normally be expected in a coastal community. Thos schools enrich our communities, to the benefit of all our residents.

[Gordon Henderson (in the Chair)]

I apologise to Munira Wilson and Jim Shannon for calling them earlier.

--- Later in debate ---

[Darren Henry (Broxtowe) (Con)]

It is pleasure to serve under your chairship, Mr Henderson. I thank my hon. Friend the Member for Northampton South (Andrew Lewer) for bringing forward this debate.

I will focus on the consequences of removing the current VAT exemption for independent schools. It is clear that this change would lead to a rise in school fees, as schools are forced to pass on the cost to parents in order to keep running. That would immediately mean that many parents, who may only just be able to afford the fees as they stand, would no longer be able to continue sending their children to private school. In fact, I calculated that one of my local Nottinghamshire high schools would lose around 20% of its children. Smaller schools would struggle to survive at that rate and may close. That would mean job losses and loss of choice for local parents regarding their child’s education.

I was recently contacted by my constituent, Dr Sharmini, a local school governor who is incredibly concerned about the potential change. She emphasised that it is not the most wealthy and their children who will be affected, but parents who work incredibly hard and make sacrifices to send their children to independent schools.

It is important to emphasise that this change would also have a knock-on effect on non-fee-paying schools, which would see an increase in pupils. That could mean larger class sizes and greater resources being required in non-fee-paying schools. It may also result in children having to move schools in very short time spans.

I am a veteran, and this is the sort of thing that would affect military families. They may have to move mid-school year, and they make good use of independent schools and boarding schools because of that. This change will have a large effect on the lives of children who will have to move. We are removing children from their teachers and friends, and for many that will be very distressing.

My team spoke with the head of a local private school in Nottinghamshire today. He had huge concerns about the use of the school’s facilities. As it stands, sports facilities and facilities such as halls are given over to a huge variety of local clubs at no cost. He stated that if VAT came in, the school would be forced to look at more economical ways of renting out those spaces and would not be financially able to continue lending them out for free.

That head also emphasised the difference between the big private boarding schools and smaller independent day schools. It is the small independent schools that will be hurt most by this change, and many may not survive the loss of students. The focus of all Members in this House must be on ensuring that every child has the best possible education; that is what I will be focusing on in Broxtowe.

[Sally-Ann Hart]

On a point of order, Mr Henderson. I neglected to say earlier that I might have an interest to declare, as my husband is a governor of an independent school.

[Gordon Henderson (in the Chair)]

Noted. Thank you.

--- Later in debate ---

[Nigel Huddleston]

My hon. Friend makes a really important point that has been repeated by many colleagues today. An introduction of 20% VAT can have two impacts: it will either push up prices or lead to cutting costs somehow. It is intuitively obvious that, if we push large numbers of pupils from the private sector into the state sector, it will inevitably put pressure on the state sector and therefore cost members of the public even more. The numbers suggested by the Opposition simply do not stack up. It is an ill thought out policy. The full knock-on impact has not been properly considered. VAT is an incredibly complex area. It is not simple to make blanket policy without considering the full impact.

Not every private school is some kind of Eton—a point made by my hon. Friend the Member for Worcester (Mr Walker) and several other hon. Members. There are exceptionally vulnerable people in very deprived areas of the country who rely on our private schools to provide the type of education they cannot get in the mainstream system.

[Sally-Ann Hart]

It is well known that many of our major independent schools such as Eton and Harrow give 100% bursaries to children from disadvantaged areas to give them a chance to skill up and to benefit for their own communities. That is amazing.

[Nigel Huddleston]

My hon. Friend is absolutely correct; the broader societal benefit of many of our private schools is considerable. That is one of the reasons why many, although not all, have charitable status. They provide all sorts of benefits, including through opening up for sports provision.

The Government are not alone in having concerns about Labour’s current policy. Labour’s own shadow Chief Secretary to the Treasury, the hon. Member for Bristol North West (Darren Jones), spoke out against its planned tax rise before he joined the Front Bench, telling students that he did not believe the policy would bring in the money that his party was promising. Of course, that has not stopped Labour from spending the money several times over already, and it does not have a plan to pay for the potential incremental costs.

I will bring my comments to a close, but I must express a slight disappointment: much as it is always a pleasure to have the hon. Member for Dulwich and West Norwood in this Chamber, I am normally faced in these debates by my opposite number, the hon. Member for Ealing North (James Murray). I must share an irony in that situation: I stand here today as a proud product of a comprehensive state school education nevertheless supporting the role of private schools in the UK and the principles of freedom of choice, aspiration, opportunity and social mobility.

My Labour counterpart is a product of the private school system yet is advocating a policy that could potentially restrict access to the very system from which he has himself benefited, as indeed have many Members on the Opposition Benches. I find that quite ironic and hypocritical, but I will never criticise somebody for the choices made by their parents. We do not do that on this side of the Chamber, but a little bit of humility in this debate might be appreciated. A good education for all is a priority for this Government, and I hope hon. Members from across the House will work with us to deliver it.