Lord Alton of Liverpool (CB)

My Lords, it is a pleasure to follow the noble Lord, Lord Lexden, not least because we have missed his well-informed and always wise and measured voice. It is good to see him back in his customary place. I supported him when he spoke in September 2024, and I do so again today. I especially endorse what he said at the end of his remarks about the need for an independent review of the assumptions that were made in introducing this policy. It does not concern only this issue, but we do not do enough post-legislative scrutiny. We push through legislation and new policies, and too often we do not go back to see whether they did what was on the tin and what was expected of them. I ask the Minister to comment on the specific figure, which the noble Lord cited, of the cost of placing a child in the state sector. I think the figure we have been given in the past was £7,690 for each additional state school pupil. How was that figure derived and applied? Do the Government still stand by that figure? For the record, I did not attend an independent school. At the end of the Second World War, my father was a demobbed Desert Rat who married my mother—an immigrant whose first language was Irish. I am a typical grammar school boy, whose family was rehoused to a council flat on an overspill estate. My parents and wonderful teachers were the reason Iusb became a beneficiary of the Education Act 1944. I was the first from either side of my family to enter higher education. I believe it is the duty of the state to facilitate quality educational opportunities for all, not for 93% or for 7%. As a teacher, I taught in the voluntary-aided and state sectors, and I have been a governor of schools in the voluntary-aided and state sectors. My children and grandchildren have had a mixture of voluntary-aided and independent education. In another place, I fought general elections with a commitment to increase income tax based on the ability to pay by a penny in the pound to improve state education. I have never seen this as a binary or ideological issue, and I have always supported the independent sector and challenged the ideological caricature of independent schools as mini-Etons, replete with straw boaters, top hats and tails. The noble Lord, Lord Lexden, referred to exceptions not being the rule, and I agree. That caricature is simply not true and does not lead to considered debate. It is simply wrong to suggest that all parents with children in independent schools are wealthy. That is why I opposed the targeted VAT tax, which takes little account of the ability to pay or of individual circumstances. Some middle-income families stretch their finances significantly and make great sacrifices, and they feel the 20% increase acutely. Some children in independent schools come from straitened circumstances. That money should be an impediment is one of the reasons why, when I was in the House of Commons, I broke ranks and voted for the assisted places scheme. I would like to see more assisted places instead of none. In our 2024 debate, I pointed out that 168,000 children were receiving financial support from independent schools, often through bursary schemes, while 10,000 were paying no fees. In 2026, the Independent Schools Council’s census established that ISC schools provided £538.5 million in means-tested fees assistance to pupils, with more than half of pupils receiving means-tested bursaries having over half of their fees remitted. That is remarkable and something to celebrate, not denigrate. Pushing schools to the brink of financial ruin jeopardises the good that these schools can do, and it is often the beneficiaries who suffer, not those with ocean-deep pockets. I will illustrate what I mean. Last Friday, I had a conversation with a bright young woman who told me that her grandfather had won a challenging custody battle to bring her up. He used his resources to provide a stable and fulfilling education in an independent school for his granddaughter. In parentheses, where such schools have boarding facilities, a really committed pastoral team can literally be a lifeline. In reply to a Written Question I tabled to the noble Lord, Lord Livermore, which was answered on 19 September 2024, the Government confirmed that a 20% VAT education tax would “also apply to boarding services”. It is hard to see how pricing families out of such services meets the Government’s worthy objective that every child should get the best start in life. A Cabinet Minister recently discussed her decision to send three of her own children to independent schools. In putting her children’s needs first, she is doing the right thing and should be defended for doing so. Being able to exercise choice, and not defending ideology, should be axiomatic. Let us also be clear that, in interrogating the economic justifications advanced in favour of this policy, we muddied the waters too much. The statistics are worthy of intense scrutiny. For example, the excellent Library note that we have been provided with for today’s debate says that “published figures do not fully capture the impact of the tax changes because they include independent special schools, which are largely unaffected by the new measures”. Simon Hyde, CEO of the Heads’ Conference, said this is creating “a confusing picture”. Yes, there have been some new schools, but 90% of new openings have been special schools, while 106 mainstream schools—some of which the noble Lord, Lord Lexden, referred to, and which have long and historic roots—have been closed. According to the department’s own figures, since 2024 the cohort of children in independent schools has fallen by 33,231—double the estimate of 14,000 that your Lordships were given back in 2024. There are now 560,300 pupils in independent schools—nearly 4% down on the previous year. The largest reductions were seen in the key intake years: 5.2% in reception year, 5.6% in year 7 and 6.6% in year 12. It is dissembling to suggest that the loss of 30,000 places is attributable to demographics. Unprecedented pupil losses in independent schools are triple the decline in the school population as a whole. To inform the debate, can the Minister please tell us the average annual cost to the state sector of educating children who have had to leave independent schools? What assessment has been made of the educational consequences of disrupting a child’s education and moving them from one school to another? Can she tell us how many more independent schools she expects to close? How many children will be displaced? What are the current estimates of the revenues being raised this year by extending VAT on school fees and removing business rates charitable relief? In summary, taxing education is simply wrong in principle. It is a breach of human rights and, in the EU, it would be a breach of Article 132 of the EU’s VAT directive, which exempts education from tax. Our starting point should be that encouraging diversity and parental choice is a good. Suggesting that all schools would be able to absorb punitive taxes was clearly wrong. Where schools have done so, it has been at the cost of services to parents, including bursaries for the less well off. Let us also note that this has disproportionately hit low-fee faith schools. Where schools have closed, there has been heartache, disruption, a loss of jobs and of revenue into the local economy, and sometimes heritage buildings and community assets. The noble Lord, Lord Lexden, was therefore right to ask the House to consider all this again, and to reiterate the need to value all schools, state or independent. I hope we will have a review of this policy that he rightly called for.