VAT: Independent Schools

Debate between Simon Hoare and Nigel Huddleston

Tuesday 8th October 2024 Commons Chamber

[Nigel Huddleston (Droitwich and Evesham) (Con)]

It is an honour to follow Citizen Smith over there.

In the large number of contributions today, we have seen the importance of this issue and the alarm felt by many Members and their constituents about the Government’s proposal. I am sorry to say that we have also had a lot of 1970s politics of envy today. We believe in evidence-based decision making, and as many Members have pointed out, it is becoming increasingly clear that Labour’s planned education taxes—removing VAT and business rate exemptions from independent schools— will not do what is claimed.

I will move on to the details in a moment, but may I first congratulate those who have delivered their maiden speeches today? I thank them all for making gracious comments about their predecessors. I learned something about each of them today. The hon. Member for North East Derbyshire (Louise Jones) spoke eloquently and lovingly about her beautiful constituency, as did my hon. Friend the Member for Isle of Wight East (Joe Robertson), who brought back many holiday memories for me. The hon. Member for Glasgow East (John Grady) gave us all good advice on naming children in Glasgow. The hon. Member for Tipton and Wednesbury (Antonia Bance) may or may not be aware that we share something in common, as we were both student union sabbatical officers, although in my case a few years earlier. The hon. Member for Horsham (John Milne) gave perhaps the most eclectic speech today, mentioning Daleks, potholes and Ann Widdecombe all in one speech.

I am afraid that I will not be so gracious about some other comments we have heard today from Government Members, who still do not seem to realise that they are now in government and their job is to talk the country up. They have constantly talked down not only the country, but the education system. Let me remind them that when we left office, education standards were going up and per pupil funding was at record levels. In contrast, when Labour was in office, we were falling in the league tables. What a brass neck Labour Members have, when we look at Labour’s record in Wales. We have been backing our brilliant teachers, and I would hope that they would do the same.

The motivations behind this policy are clearly questionable. The impact assessment is non-existent and the savings illusory. There are so many potential unintended consequences and uncertainties around these policies that, at the very least, the Government need to postpone implementation, although it would be better to scrap the plans altogether. They are also moving away from a long-held principle that we used to agree on across the House that educational services are not taxed at all. It is a terrible thing that they are now bringing in.

We have five key categories of concern: the impact on state schools; the impact on Government finances; the timing of the proposals; the consideration of exemptions; and the impact on SEND and EHCPs. I will not repeat all my comments from the debate we had earlier, but it is so clear that this policy will not only have a detrimental impact on the independent schools sector, but negatively impact the state sector, because the imposition of a 20% VAT hike overnight will mean that some families will no longer be able to afford the fees. Inevitably that will mean children leaving the private sector and moving to the state system, putting an additional burden on many local state schools, some of which do not have the capacity. As I said this morning, it is not fearmongering or scaremongering; it is happening already and we are already seeing it in schools. According to some forecasts, instead of the predicted £1.5 billion saving, this policy could cost the taxpayer money.

How extraordinary to choose this policy area to try to eke out some cash when so many other options are available, if the Government were brave enough. Out of total Government spending of more than £1.2 trillion, is this really the policy that they want to prioritise?

On the topic of overall Government finances, we have not yet heard clearly whether the Department for Education will get more funding from the Treasury if the number of state school pupils exceeds expectations. Will they be expected to pay it out of existing budgets? Have the Government set aside capital for additional school spaces if it is needed?

Regarding the timing of the proposals, many Members have mentioned that it is beyond belief that the Government are bringing in this policy in the middle of the school year, when schools are simply not ready for it. It is not fair on the independent sector to expect schools to get their heads around new legislation, register for VAT and implement new systems and processes in literally a matter of weeks and before Christmas. That will not happen. We have also not heard whether the Government will create exemptions or special considerations for all these areas: military families, students on music and dance schemes, children attending small schools, language schools or religious schools, those paying low fees or on bursaries, and children in exam years who may have to move to another school that does not offer their curriculum.

What are the Government doing about pupils with special educational needs and those with an EHCP or in the process of gaining one? If, as many predict, there is a displacement of children with SEND and EHCPs into the state sector, is there the capacity for that? Is there adequate additional funding support planned for local authorities to deal with that predicted increase in demand?

I wish to make a couple of other brief points before concluding. As a Conservative, I believe in choice, and I will not criticise choices made by parents about their children’s education. I have no qualms, however, about criticising hypocrisy. The irony that I stand here as a proud product of a state comprehensive education defending independent schools while the Exchequer Secretary to the Treasury who spoke earlier, a product of a private education, is pursuing a policy that could undermine independent schools is not lost on me or others. Many Government Members attended independent schools or sent or are sending their own children to them, and yet they are determined to increase the costs on others, depriving many families of the choice they themselves had.

I am glad to see the Secretary of State for Education now in her place after being conspicuously absent. Perhaps she will take the opportunity to apologise for the tweet. Parents who send their children to independent schools pay twice for their children’s education and deserve better than to be treated with contempt by their Government’s Education Secretary. The divisive tweet that she put out last weekend was shockingly ill-judged and ill-informed, sneering and smirking about embossed paper and swimming pools. Does she really not understand or recognise that not every independent school is like Eton or Harrow? It betrays an incredible lack of awareness and poor knowledge of the facilities and financial status of many independent schools. It demonstrated that the policy is being promoted not on evidence but on envy and spite—ill-informed and misplaced envy at that.

[Simon Hoare]

I agree entirely with what my hon. Friend has said. Will he add to the indictment of the Secretary of State the fact that she failed signally to realise that she is the Secretary of State for all pupils, whether they are in the independent or the state sector? The divisive language that she used was a very rude signal of two digits to those families who take a decision that she does not like.

[Nigel Huddleston]

My hon. Friend puts it well. I do not have to add to his comments.

This is a rushed and ill-judged policy that will not raise the money the Government assumed it would, undermine the viability of many independent schools, put immense pressure on the state school system and put in jeopardy the education prospects of thousands of students, including many with special needs. We implore Ministers to reconsider.