Contribution
My Lords, the sixth of the first steps for change—remember them?—in Labour’s 2024 manifesto, read:
“Recruit 6,500 new teachers … paid for by ending tax breaks for private schools”.
This remains an incensing canard. As we have plainly seen, it is not the case that the number of teachers in state schools has increased by 6,500. In fact, it has fallen.
The worst of it was the idea, frequently peddled, that there were tax breaks for private schools. What rot. Step back and look at the system as a whole: parents of children at private schools who pay tax—I declare my interest as one such parent—not only pay handsomely for the educational places used by their children but are not using the places to which their children are entitled in the state sector, funded, of course, by their taxes, a point made so ably by my noble friend Lord Blackwell. Those places not taken up in the state sector can then be used by other children. All this is very far from being a tax break for private schools. The former system was a system of mutual benefit, as the noble Lord, Lord Alton, who is my friend, so correctly said during his speech.
Our national neighbours do not tax education. In fact, it would be contrary to EU law for them to do so, as the noble Lord, Lord Alton, said during his speech. The ability to impose VAT on school fees was a Brexit benefit. The United Kingdom seems to be the only country in the world that chooses to tax charities that provide education, a factor which speaks for itself.
This Government should learn lessons from the sensible, civilised and mutually beneficial approach to private education taken by the Irish Government—an approach that recognises the benefit to the child and the state itself of a flourishing fee-paid education sector. The Irish Government have a system that recognises the fact that parents have paid, by taxation, into a state education system that they have elected not to use. Ireland has roughly the same proportion of pupils in fee-paid education—6% to 7%—yet in the Republic of Ireland the state pays the salaries of all teachers and special needs assistants working in recognised private schools. Fees are set each year by the school; they are much reduced as a result of the policy. Therefore, fee-paid education is much more widely accessible. The justification for this system was pithily stated by Norma Foley, then Irish Minister for Education, in a response to a Question in the Dáil on 16 April 2024.
“If the parents of children in the fee-charging sector chose to send their children to the schools in the free education system, the State would have to fund those school places”.
Quite so.
Here, as my noble friend Lord Blackwell pointed out, parents pay twice, and they now pay VAT and other additional levies on education charged by this Government. This extra tax revenue is used for what? It is not for more teachers, as promised. Presumably it is spent on the ballooning welfare budget and the interest on the ever-increasing national debt. As we heard from my noble friend Lord Lexden, we have had 33,231 fewer pupils in the fee-paid sector over the past two years, 106 mainstream schools have closed, and of those that have opened, 90% have been specialist schools which benefit from government funding, not least via EHCPs, and are largely exempt from VAT, a point already made but which certainly bears repetition. There are certainly many fewer mainstream school places. There are no winners from all this. As my noble friend Lord Lexden said, in Scotland, analysis from BiGGAR Economics published in April 2026 showed that the VAT rise there was costing more money than it was raising, and the same will surely be shown to be true in England.
British private education is a world leader. Why damage something we do so well, undermined only for the sake of dogma? Over 100 schools have closed, thousands of staff have lost their jobs, and thousands of children have had their education disrupted at a formative time in their lives. State pupils have lost the benefit of the use of facilities which they would have been able to use as a result of partnerships between the fee-paying and the state sectors, as set out by my noble friends. This is a trend which will surely continue and accelerate. No one wins from this policy. As my noble friend Lady Laing so eloquently said, the whole community suffers. Can the Minister point to a single child who has benefited from the policy, remembering that not a single extra teacher has been hired? Very many have been harmed by it.