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.