VAT on schools did damage

My speech in Lords

Jealousy is not a great emotion. It produces bitterness and unpleasantness. If it gets woven into politics, it usually ends up damaging the people and parties pursuing it, rather than helping them. I remember that a previous Government did not like grammar schools very much, and they decided that the parents of children in the surrounding area of a grammar school, where a big majority would not have children attending the grammar school, could be given a vote on the future of the grammar school. I think they thought that that would result in the abolition of grammar schools. However, when they held a vote, they discovered that the parents of pupils who had not got into the grammar school had no problem with the fact that very bright pupils had got into the grammar school; they saw that as a good for the wider society and the local community, not as a bad. There is a warning there.

We are fortunate in this country that we have some outstanding private sector schools, some of them very famous and well known. Some of them deliver a high quality of education. Labour will point out that they are able to do that partly because they have more income per pupil going into the school because they can charge much higher fees, and there is some truth in that. But there is also truth in the fact that the energy and the standards they set, and what they expect, also contributes  to their great success. So, when we have a great achievement like that, clever Governments want to build bridges, not create barriers. They wish to see how we can allow those well-endowed schools still to flourish, but also how more of us can benefit from that process.

My parents were not rich enough to send me to a private school, but I benefited from the fact that my local state primary put me in for a competitive examination to get a place in a direct grant school. I was fortunate enough to pass that exam, so I was able to attend as a day pupil with a free place what was primarily a boarding school paid for by richer parents who sent their children there. It worked harmoniously; we benefited from the exchanges between us, our different backgrounds, our different aptitudes and the different contributions we could make to that school.

A previous Government thought that that kind of thing was wrong, so the direct grant school idea disappeared and those schools had to become fully fee-paying schools or perish. Then there was the assisted places scheme, which was a similar kind of operation, and that too is an excellent idea, because it gives people from low-income backgrounds, who would respond well to the ethos of the school offering the place, that opportunity. Again, it blends the excellence of the private school with opportunity for those who can compete for the places.

Quite a lot of our great public schools, as endowment charities, are aware of their need to pursue wider charitable purposes in the educational area. So some of those great schools help the surrounding state schools by offering lectures and specialist tuition, organising joint events and being good members of the local community. Again, that is something we should value. Of course they should do that as charities, but it is there and it enriches the wider experience.

We have some extremely good state schools, and I am very proud that they should be there. But we also have some state schools that could do considerably better. That is where having both great state schools and some great private schools, which can act as mentors, guides or lighthouses to illuminate a better future, can be so valuable. The  Government should look again at the opportunity for social and educational enrichment that can come from more sharing of facilities, more joint venturing and more cross-feeding of good ideas from state sector to private sector and from private sector to state sector.

This unfortunate policy experiment that the Government have unleashed on private sector schools is very revealing about the wider debate on the impact of certain policy interventions. One of my persistent themes, as noble Lords have probably picked up, is that tax is usually very damaging and that it is usually something you impose to stop people doing things rather than to encourage them to do things. The Government decided to unleash three very big tax rises on these private schools: the VAT that we are describing, which directly has to be paid by the families of the pupils going there, as well as the very big hit on business rates and the very big hit on employee costs. Of course, the main item in a private school’s budget is employment, not just of the teachers but of all the support staff, some of whom are not that well paid. These jobs are at risk the higher you put up national insurance, along with the other two taxes.

 

We have seen, and have heard already in this debate, that the result of this treble tax attack has been a substantial number of school closures, as predicted. It is not good enough to say, “Well, there have been openings on the other side”, because we know that those openings are of different kinds of schools, often with different revenue streams including government money. You cannot get away from the fact that you have lost quite a lot of good schools, which just found the treble taxes too much.

We also know that some 33,000 places have had to be found in state schools as a result of the displacement. That is 33,000 families and individual pupils whose lives have been profoundly changed. It is not easy for a child to change school at an unusual time—other than when everybody is changing school, going from primary to secondary—because you lose all your friends. You go into a new school and maybe nobody wants to be friends with you, because groups of children can be cliquey and difficult. The Government seem totally insensitive to those kinds of issues. They think it is worth while to change the lives of 33,000 young people and their families for some greater good, which just seems to be the idea that they do not really like people being able to buy a decent education for their children.

I would imagine that the cost of those children transferring is around £300 million a year, applying a very rough multiple to the number of children. A Government who are very short of cash are not well advised to invent a policy that immediately imposes an additional £300 million a year of public spending. We wait to see how much extra revenue growth there has really been because, as we heard in the Scottish example, you can end up worse off when you take the balance of disappointing revenue into account with the extra costs.

One of the social consequences of imposing a tax on the schools, which means higher fees for parents to pay, is that many of the schools will not close but will change the people they educate. So we will see a pattern where these schools will be for very rich foreigners—that is, an export—and for very rich people at home, but all the other strivers who would like that are priced out of the market. Surely that is the opposite kind of social change to the one that Labour should want. It should not want the schools to be only for the children of billionaires or multimillionaires. Would it not be better if they reflected society more widely and offered education to a wider number in the community? So please, Government, think again. Understand that these schools can be a great bonus for our society.

40 Comments

  1. Mark B
    September 19, 2026

    Good morning.

    Jealousy is not a great emotion.

    Whilst I agree with our kind host I believe it is more than just jealousy. I believe it is also ideological. If you can have as many children in a State run school you can better indoctrinate them. We can also see, as our kind host alluded to from his own experience, children who are not from a wealthy background no longer being able to advance in society through academic ability. This pulling up of the ladder can be seen with a certain female Labour MP, and she was not the only one, sending her offspring to a private school whilst denying other children the same option.

    This all falls into the dumbing down of our society which I believe is a policy of all governments. This way a low information society can be better controlled and manipulated. eg Banging your pots and pans for the NHS on a Thursday evening 😉

    1. Ian Wragg
      September 19, 2026

      You’re quite right about successive governments wanting to dumb down and indictrinate children.
      The only problem is the advent of the Internet which has opened up a vista of learning experience which the government desperately wants to regulate.
      The whole climate scam is exposed as is the myth that diversity is our strength. Children today are being g sidelined by DEI hiring preferences especially in the public Sector.
      Ad with the nations finances, the government has lost control.

      1. Lifelogic
        September 19, 2026

        Indeed.

        The Government and the BBC are propaganda outfits they take your taxes and use it to indoctrinate you with lies and force the idea of big government and high taxes on you. Alas it is working so we have to suffer socialism certainly since Thatcher left.

  2. Roughcommon
    September 19, 2026

    Sir John, I live only 500 metres from the school which you attended in Canterbury. Last Thursday afternoon I went out for my daily 1.5 km exercise: walk 100m, jog 40m, repeat. It was 2 pm instead of my usual 4:30 pm and I found myself walk-jogging through the middle of a gaggle of around 30 to 40 late teenage girls in smart hockey kit, heading for inter-school games on the Kent University Campus opposite Kent College. I thought of you and the leg up that it gave you educationally despite your ‘simple’ background.

    I myself benefited from attending Bristol Grammar school in the late 1940s, when it was still a Grant Aided School, sending typically 25 to 30 boys to Oxbridge each year. Nowadays it is entirely private but like many of its alumni, I am proud and happy to contribute to its enormous Bursary Fund, enabling bright but impecunious students to receive an outstanding education.

    1. Lynn Atkinson
      September 19, 2026

      I bet that the current political class wish that their policies had applied in the 1950s and that JR had become a plumber. They are that perverse. They would have Britain impoverished and reduced to a country like, for instance, Somalia where the average IQ is below 80, because they would be more secure in their crumbling ivory towers,

      Incidentally, speaking of Canterbury, the woman in that pulpit has overstepped the mark by a margin. Making up and awarding a trophy to Islam for 9/11. She was known as ’the Chief Abortionist’ before moving into the Palace at Lambeth, but she has revealed that she is not only unchristian but actually evil.

      This cannot be allowed to continue.

  3. Berkshire Alan.
    September 19, 2026

    It is the policy of spite and envy, simples.
    Yet again those parents who are not wealthy but choose to sacrifice all they can for their children’s education are
    tax penalised for those efforts, and for 33,000 it was a step too far !
    Once again aspiration and effort to improve things for yourself and your family is attacked in the “Why Bother” level down policy of the UK Government.

    1. Mark B
      September 19, 2026

      . . . aspiration . . .

      The Kryptonite to Socialism.

  4. Clough
    September 19, 2026

    I wonder how many extra teachers the state sector has recruited to accommodate the 30,000+ extra pupils. As JR will know, questions have been asked in Parliament about this, but the government has not properly answered. They got the media to publicise a pledge to recruit 6,000 more teachers with the extra tax income, but 2 years later that doesn’t seem to have happened. So now we need to know where the money has gone. Funding NGOs in Calais, perhaps?

    Reply The total number of teachers has fallen! Another broken promise.

    1. Dave Andrews
      September 19, 2026

      Hasn’t the number of teachers fallen because British ladies are having less children?

      1. Lynn Atkinson
        September 19, 2026

        British ladies have been replaced by the fecund immigrants.

      2. Lifelogic
        September 19, 2026

        Ladies or Women? But surely “fewer” not less. This as they are taxed so much that we need both parents to work full time just to buy or rent a house. But then if you are on benefits (or a single parent) this is rather less of an issue.

  5. Sakara Gold
    September 19, 2026

    On 18 September 2026, Trump officially announced an immediate White House ban on three major American news organisations: CNN, MS NOW, and Politico

    This follows numerous other first amendment bans on Associated Press reporters in February 2025, who were indefinitely barred from Air Force One pool events over “linguistic disputes” by refusing to refer to the Gulf of Mexico as the “Gulf of America”. And their reporting of Trump’s tendency to fall asleep during meetings (18 times so far in 2026)

    In late 2025 press outlets like The Hill, The War Zone, NBC News, The New York Times, NPR, and Politico had their dedicated Pentagon office spaces removed or their restricted unless they were accompanied by Pentagon officials who deny them access to Pentagon staff

    Trump explicitly threatened the respected New York Times and the Washington Post with future bans during Trump’s September 2026 Oval Office press event. The administration also previously targeted the New York Times with multi-billion dollar defamation lawsuits and grand jury subpoenas, attempting to uncover Pentagon leak sources related to Presidential aircraft security

    Why is Trump so paranoid about news reporting of his activities, as the mid-term elections approach? Insiders report that the hot topic all these media outlets were trying to uncover is the nature of the secret “agreement” that was reached between Trump and his chum, the war criminal Putin, during Putin’s visit to Alaska in 2024.

    1. Dave Andrews
      September 19, 2026

      Why is Labour so paranoid about GB News reporting of their activities?

    2. R.Grange
      September 19, 2026

      So what? America is a foreign country. Weird things happen in foreign countries!

    3. mickc
      September 19, 2026

      The New York Times is respected? Once upon a time possibly…now just a woke PR machine…

      1. Lynn Atkinson
        September 19, 2026

        And the WAPO? 🤣😂
        Trump knows the MSM is captured and has the guts to act.
        We know it too, the Beeb long gone, the Time a shadow of its former self, The Telegraph recently suffered the demise of its morals and standing. Etc etc etc… GB News is captured too.
        All of this too much for poor Mr Cold.

    4. Richard II
      September 19, 2026

      The mainstream media don’t report objectively anyway, on any issues that are really important. No loss.

  6. iain gill
    September 19, 2026

    but even the few remaining grammar schools have been manipulated. children getting free school meals are given a 20 mark uplift in their 11 plus exam result, so that around 10 percent of grammar school entrants got worse marks than pupils who got better marks who were not allowed in. it is not a meritocratic entry system. and many of the families not claiming free school meals are far poorer than those that are, so its not even achieving its aim of helping the most needy. it is countless small manipulations of the system which cummulatively result in mad social engineering where individuals give up and hate the state. imagine being one of the kids not allowed into grammar despite far better exam results than many of the pupils admitted, it is a soul destroying place to be.

    1. Iain Gill
      September 19, 2026

      should say “at least 10 percent of grammar school entrants got worse marks than pupils who got better marks who were not allowed in” sorry

      1. iain gill
        September 19, 2026

        people just give up work, to qualify for free school meals, to get their kids into better schools, the incentives in the system are sheer madness

        1. Lifelogic
          September 19, 2026

          Indeed another thing government do with your taxes is spend vast sums of you money to encourage more and more people not to work and not even to bother to learn how to work.

          1. Iain Gill
            September 19, 2026

            and subsidise foreigners to take locals jobs

  7. Stred
    September 19, 2026

    I read that this awful government is also deliberately damaging improved education by putting independent academy secondary schools under control of local authorities. No doubt to enforce the dreadful subversive claptrap taught in comprehensives.

    1. iain gill
      September 19, 2026

      well if you have a few kids, music instrument lessons in school can be 250 per child per instrument per term, some kids are doing multiple instruments… all free if you get free school meals… even one instrument and 2 kids makes 1,500 quid per year out of taxed money… yet another encouragement for parents not to bother trying and go on benefits so its all free.

    2. Lifelogic
      September 19, 2026

      +1

  8. Richard1
    September 19, 2026

    We generally think Labour governments are bad because they tax and borrow too much and therefore bring about worse economic conditions than we would otherwise have. This has happened with all Labour governments to date, with the mess having to be cleared up – more or less successfully – by Conservative / Conservative led govts.

    But there are other longer term, baleful effects of Labour govts, motivated as they are by collectivism, statism and envy, which last for many years. The attempted destruction of the independent education sector is one. The assault on rural life is another. The dangerous imposition of expensive and unreliable energy policy is a third. Perhaps most immediately serious at the moment is the threat to national security. The surrender of the chagos islands is emboldening adversaries – Argentina is having a crack at the Falklands, Caribbean nations want some money on the ridiculous basis of compensation for slavery, two centuries after the British empire finally brought millennia of human slavery to end. (Excluding a few dictatorships today where it still exists). Now we read that the foolish burnham-milliband sanctions against our ally Israel will mean a dangerous reduction in anti-terrorist intelligence.

    We need to unite the right to get rid of Labour and the dire threat which they pose to our Country.

    1. Philip P.
      September 19, 2026

      The Conservatives under Badenoch won’t unite with anybody, Richard. They want to see their rivals, Reform, crushed. From a Tory perspective the best way that can happen is for Reform to be defeated in the next election, then their disenchanted supporters will return to the Conservatives. Yes, we’ll have at least another five years of socialism, but if the main aim is to assure the long-term survival of the Conservative Party, it makes sense.

    2. Lifelogic
      September 19, 2026

      Tax, borrow, waste and over regulate. The bloated state sector become a dead weight that slowly strangles the productive with taxes, red tape, mad employment laws, rip off net zero energy, pushing them to leave or give up.

  9. Bryan Harris
    September 19, 2026

    Without the poor and under-educated labour would have little purpose left, except to wreck the economy and destroy anything they class as elitism.

    If there were too many opportunities for poor kids to get a good education and escape the slums that would mean less people dependant on labour. That’s why labour would deny this escape route from their domain.

    Sometimes it appears that labour are stuck in a time window, where the poor working class all voted labour, voiced the same ideology, while hating those with any money. A world where the flat cap and poverty went hand in hand with ignorance. and depravation. But this is what labour seem to strive for.

    Grammar schools were always seen as elitist institutions by labour yet that was just an excuse to wipe out more opportunities and potential.

    The eradication of the labour party, so richly deserved, can easily be achieved by getting rid of the necessity for people to live ignorant lives in slums. The route out is through a massive increase in ‘real’ education – and not the Blair type.

  10. mickc
    September 19, 2026

    And it’s a policy the Tory Party won’t reverse…as with many…most…Socialist policies.

    Reply Conservatives do back reversing this

  11. glen cullen
    September 19, 2026

    Why do we still have the tax created from the EEC/EU ….why are we still following 99% of their laws and regulations ?

  12. Michael Saxton
    September 19, 2026

    This spiteful policy driven solely by class ideology has harmed private schools and increased pressure on state education. There was no economic reason for it whatsoever. For aspirational hard working parents who make the choice to send their kid/s to private school it’s worth noting they do this without any cost to the state. Indeed, they are already paying their taxes probably at 45% or more so they are actually relieving the state of quite an economic burden. These parents choose this expensive course of action and why not, it’s their preference to have the kid/s educated privately. But of course the appalling class warriors within Labour see this as very rich people gaining an advantage for their kids. Well, for multi millionaires maybe that is the case as this category of parent remain unaffected by the imposition of VAT. But for a family with two hard working parents paying taxes but determined to have their kid/s educated privately it is certainly a greater struggle with the imposition of VAT. Of course there are many good State schools but equally there are many bad. Labour’s imposition of VAT has harmed our education system both state and private.

  13. MBJ
    September 19, 2026

    C of E schools tend to provide a good education in the North as opposed to the state schools..and this is only from my family’s experience,but education is all very well if what follows in life is tuned to broader education.Perhaps your general approach to education was wider than those who paid as you were a prolific reader from the start. You though are still in the club of an institution whose life pivots around teenage achievements and can be somewhat blinkered.I have been taught by Oxford and Cambridge graduates and enjoyed all their modules in the 80’s.
    I have been thinking about how contributors rubbish philosophy.I found philosophical logic,philosophical argument,the philosophy of language etc very useful and look at misinterpretation of language today in the UK ,even in law and find it sad how language is misused to win an argument rather than with the corresponding truth .

  14. Geoffrey Berg
    September 19, 2026

    The education system is now an expensive mess.
    It is infused by egalitarian nonsense rather than by quality.
    It has regressed, not progressed since the 1950s.
    This has resulted in more people talking their way into top jobs rather than getting them owing to their tested ability (as so many get top exam grades and that is exacerbated by ‘positive discrimination’)) meaning that people of little and insufficient ability are becoming top civil servants, judges and M.P.s etc.;.
    Examination results should be graded not according to some ever-declining standard but in accordance with only a pre-set percentage of the population getting high grades and then going to University.
    Unfortunately most independent schools have also taken a wrong path with ever more staff (both teaching and non-teaching) and ever higher fees, even before V.A.T., making them unaffordable except to the wealthiest. So I say we need many commercial schools where both owners and parents will look at both educational standards and costs. This should be underpinned by a school voucher system (where parents are given a voucher for a specific sum to cover the cost or sometimes in the private sector part of the cost of their children’s education) such as has been recently introduced into the state of Wyoming, U.S.A.
    In essence we need less education but better and more competitive education, not woke education which has damaged not only the education system but in due course society as a whole.

  15. Sidney Ingleby
    September 19, 2026

    Richard 1: oh so relevant unlike Sgold’s usual off-topic contribution(at length).The Government makes no
    attempt to disguise their hellbent aim to have this country tied lock stock and barrel to Brussels.Burn’em
    may ,increasingly likely,risk a snap general election confident that he will still achieve an overall
    majority sufficient not to give a toss for what will compose the opposition

  16. Iain Gill
    September 19, 2026

    Reform campaigner now in hospital with burns, from having hot liquid poured over him by extreme lefty nutcases. Probably used the prison technique of using lots of sugar in the liquid to push the boiling point up.
    Extreme political violence on the streets against normal political party trying to campaign peacefully.
    Rather like the extreme violence which is now routine at Speakers corner.
    Yet nothing from our “full force of the law” government, which reserves itself for targeting views it does not like.
    Disgusting.
    Multi tier justice.
    The system stinks.

  17. Derek Henry
    September 19, 2026

    Once everybody gets beyond the tax payer money myth , explaining the proposal is relatively straightforward.

    Labour’s plan was to make make private education more expensive by ending tax breaks for independent private schools.

    This policy shift aimed to move teachers from the private sector to the public sector. The so-called “new” 6,500 teachers Labour promised to recruit were actually existing teachers in independent schools who would move to the public sector as demand in the independent sector decreased.

    The VAT change was a strategic move to redistribute resources rather than to claim foolishly that it would generate revenue. The shift was supposed significantly transform the UK’s educational landscape, with more independent private schools becoming publicly funded free schools.

    Necessarily, it would also mean the pupils would move across with these new free schools. You’ll note that Labour’s pledge never discounted that possibility. They never said the pupil/teacher ratio would improve. And, of course, no journalist evrr picked them up on that point.

    The UK, which issues its own currency, doesn’t need to collect taxes to fund spending. Instead, the government credits accoints with payments, which causes taxation to happen as the money moves from hand to hand over time — like a,stone skipping across a pond.

    Mathematically, the total tax take is a geometric series, not a simple sum. In the UK, it will always be about 90% of whatever the government spends, largely regardless of the tax rates. (The other 10% is money people have decided to save, not spend.). This means that Labour’s proposed VAT change on private school fees will not “raise money” in the traditional sense. Tax changes on their own are distributional, not accumulative.

    Instead, the increased spending on free school transition will cause an increase in the total tax-take, which will be about 90% of any increased spending. A Labour Treasury will mark the remaining 10% as “capital spend”, so it all neatly falls within their “fiscal rules”

    Which are similarly an act of misdirection Derren Brown would be proud of.

    The headline-grabbing promise of 6,500 new teachers is part of a broader strategy to integrate private education resources into the public sector, presumably because Labour believe it will improve overall educational quality.

    The VAT change tried to encourage independent private schools to transition into free schools, similar to the transformation of Batley Grammar School in 2011. Batley Grammar School moved from a fee-paying independent school to a state-funded Free School, becoming the first Free School in Yorkshire.

    Labour wanted more Batley Grammar Schools.

    Always look beyond the neoliberal vheadline. Everything in politics is cleverly designed to get everyone to jump to conclusions. When really it is all about skills, real resources and what productive capacity you have. How you mobilise them without causing inflation. It’s never about revenue as they issue the currency.

    Will it work ?

    Who knows…

    Reply This is nonsense. Teacher numbers have fallen so there are no 6500 extra teachers or even one extra. There was no plan to get schools to shift from private to public. The private schools closed by the tax have shut down. Taxes are needed to pay for public spending and are taken from the private sector which then has to cut its spending on other things. If a government prints too much money to spend it ends up with a destructive inflation.

    1. Derek Henry
      September 20, 2026

      John you don’t need to post this comment , but please take a look.

      “Taxes are needed to pay for public spending.”

      You have known me long enough to know I support a lot of what you do John. I would never lie to you. What’s the point about about lying about anything.

      They give you the very token to pay their tax. So you are definitely not funding them John.

      All taxes collected end up in the UK consolidated fund. Which is reset to zero every night of the week. It starts every new day with a zero balance. It does its job it shreds currency out of existence.

      Ask people at the treasury and the BOE they will tell you what I am saying is the truth. We have studied it for 30 years.

      Here

      https://gimms.org.uk/2021/02/21/an-accounting-model-of-the-uk-exchequer/

      Take a look at the completed study.

      I’m more than happy to be proved wrong. Please point out where the study goes wrong.

      It’s the tax liability imposed on the public that is needed as that drives the currency. Not the revenue itself. Why would the monopoly issuer of the currency need £’s when they issue the damn thing ?

      You know you’ve been there. A spending bill is passed in parliament and if passed the BOE starts crediting the commercial banks reserve accounts and then the commercial banks start crediting people’s bank accounts.

      Where does and what account does the BOE get their funds from ?

      The details are here

      https://new-wayland.com/blog/uk-government-spending-gory-details/

      It’s always been spend then tax back what has been spent. Not the other way around.

      Very Kind Regards

      Derek.

  18. Original Richard
    September 20, 2026

    The only way to push back on the Left’s hold on the education system is to de-nationalise schools and universities.

  19. Peter Gardner
    September 21, 2026

    Lord Redwood, you will never convince socialists that anyone should be given a better start in life no matter whether they get it through talent and hardwork, through their parents’ wealth, or their parents sacrifice and dedication. Their parents should have nothing to do with it, no choice at all. We are all created equal and we must all receive the same education and that education must be the one defined and laid down by the state. Full stop. What socialists do know and are right about is that once they capture a young mind they probably have it for life. Hence capturing education is the key to their socialist society. They will never let it go. Never. They must therefore crush all competition.

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