Independent Schools: Tax Changes

Lord Black of Brentwood Excerpts

Wednesday 25th June 2025 Lords Chamber

[Lord Lexden]

To ask His Majesty’s Government what assessment they have made of the impact of the removal of the VAT exemption and other recent tax changes on independent schools.

[Lord Black of Brentwood (Con)]

My Lords, on behalf of my noble friend Lord Lexden and with his permission, I beg leave to ask the Question standing in his name on the Order Paper. I declare my own interest as chairman of governors of Brentwood School and president of the Boarding Schools’ Association.

[The Minister of State, Department for Education (Baroness Smith of Malvern) (Lab)]

My Lords, the Government published impact notes on the anticipated impact of the VAT and business rates changes affecting private schools. We monitor the impact on the sector and published details of pupil numbers in June 2025. A drop in numbers was expected following these changes and due to other factors, such as demographic decline. The full impact is expected to be realised over several years. Overall, private school pupil numbers remain higher than in 2020, then a record high.

[Lord Black of Brentwood (Con)]

My Lords, documents released during legal action against the Government over the imposition of VAT midway through the academic year revealed that Ministers were warned by officials that theirs would be the most disruptive option for the implementation of this vindictive policy. Why did they callously ignore that advice? Ministers were also consistently warned by the sector that their assessment that there would be hardly any impact on independent schools was ludicrously optimistic. Now, the DfE’s own statistics show a drop of 11,000 in independent school numbers, four times that predicted by the Government, with boarding schools hit twice as hard. Is the Minister not ashamed of the Government’s appalling failure to listen to advice? Will she say sorry to the schools that have inevitably closed, to the people who have lost their jobs and, above all, to those students whose lives have been so cruelly disrupted?

[Baroness Smith of Malvern (Lab)]

No, because I am proud that this Government are prioritising investment in the 93% of our children who attend state schools. On the point about the legal action that the noble Lord started his question with, that was a legal case won by the Government. It was found that the Government had not, as was asserted during the debates on this, acted in contradiction to human rights legislation.

On the final point about the numbers, the Government always said that they thought there would be an increase in the numbers of children potentially coming into state schools. That has been around 3,000, which is exactly in keeping with what the Government said at the time of introducing this legislation.

Independent Schools: VAT

Lord Black of Brentwood Excerpts

Thursday 17th October 2024 Lords Chamber

[Lord Black of Brentwood (Con)]

I declare my interests, as in the register. I have three questions. First, in opposition, noble Lords made much of commitments to the performing arts. Why do they now attack schools providing specialist training in these disciplines? They rely on recruiting young people with talent regardless of the means to pay. Ability to pay will now trump talent, endangering the pipeline of young people empowering the creative economy, including the tradition of English choral music.

Secondly, what is the Minister’s advice to a pupil studying A-level music who is forced out of their school in an exam year with no local school offering that subject, which is highly likely as 50% of state schools no longer do? Is it home schooling or “give up on your dreams”?

Thirdly, £1.5 billion is a wild overestimate of VAT revenues because of pupil migration. Even if, in the Government’s economic la-la land, all the money goes on teachers, which it will not, because this magic money tree is also funding nurseries and breakfast clubs, it will add just one-third of one teacher to each school. Is this con trick not just raising unattainable expectations of increasing standards for vulnerable children?

Independent Schools: VAT Exemption

Lord Black of Brentwood Excerpts

Thursday 5th September 2024 Lords Chamber

[Lord Black of Brentwood (Con)]

My Lords, I declare an interest as president of the Boarding Schools’ Association and the Institute of Boarding. This is an intensely personal issue for me. My beloved parents sent my brother and me to Brentwood School, an independent school. They were not at all wealthy—my father owned a shoe shop and my mother looked after the family. It was a real struggle for them, but they never regretted it. To their sacrifice, and an exceptional education at Brentwood, I owe everything. My parents were just the sort of people, battling to make ends meet to pay the fees, who would have been hit hardest by this spiteful policy. They would not have been able to cope with a sudden 20% increase, especially halfway through the school year, and we would have been placed in a state school, adding to their overcrowded classrooms. That is what will happen now—one of many reasons why this policy will end up costing taxpayers money. This truly is voodoo economics. Those affected will be young people at their most vulnerable. They are not statistics, but children with whose lives this Government are heartlessly toying.

Fifty years on, I am chairman of governors at the school, and I declare my interest accordingly. Abundantly fulfilling our charitable purposes, we play our full part in helping many from less well-off backgrounds. We spend nearly £2.5 million each year on over 120 bursaries, half of which are fully funded. We have an active programme of partnerships and volunteer programmes with the local community, and we work with many local state schools to provide sporting, musical and science facilities, as well as donating laptops. That is replicated across the sector. However, all that is at risk if VAT, alongside the removal of business rates relief, hits the financial sustainability of independent schools.

A prime duty of government in education policy should be to encourage excellence access—hallmarks of schools such as Brentwood. This policy does the opposite: it is a tax on opportunity and achievement. If I dare use this phrase, it is the first time in five decades that a Government have had levelling down as an aim of education policy, rather than levelling up.

Brentwood is also a boarding school. Boarding schools, both state and independent, are a vital part of the education sector, contributing £3 billion a year to the economy and providing 64,000 jobs, as the noble Lord, Lord Bilimoria, said. They educate 70,000 children a year, with 25,000 coming from overseas, making them part of the incredible international success story of independent education. They play a particularly important role in training young people in music, singing and ballet. As such, they are a crucial part of the UK’s creative economy, especially at a time when music education is collapsing in state schools. They also provide indispensable continuity of education for military families, on whom we depend for our freedoms. The Government say that will not charge VAT on state boarding fees but will on independent boarding fees. Why on earth should they be treated differently, if not simply for ideological reasons? Should not fees for military families, and for students enrolled in music and dance schemes, be exempt, in the interests of wider public policy and at a cost of just a few million pounds?

This cruel policy—in sharp contradiction, I might say, of our obligations under the Universal Declaration of Human Rights—shamefully puts the interests of crude ideology before those of children, many with special needs. The Government must delay its implementation until September 2025, undertake a proper consultation, talk to the sector and come back with plans that are properly thought through, costed and practical. It is time to put children before party.