Human rights laws may yet reverse Labour's private school VAT raid

Telegraph

24-03-2025

Next week some of the finest lawyers in the land will appear before the High Court in a case which could shake the Government to its core. While the case focuses on whether it is wrong to put VAT on education, much bigger issues are also at stake: the sovereignty of Parliament, the place of education in society and the rights of children.
A loss would be embarrassing to Sir Keir Starmer KC, but it would be existential to Bridget Phillipson, the education secretary (also doing untold damage to state academies) and potentially Rachel Reeves who, as chancellor, is technically the respondent.
The case suffers from numerous misunderstandings, the biggest of which is what happens if the Government loses? By my estimation – and I am not a professional lawyer – the Government is far more likely to lose than is commonly understood.
A victory by the claimants on behalf of schools and children (helped by the Education Not Taxation parents' crowd funder) will not see a court scandalously overturning a taxation measure as the Government claims. The European Convention on Human Rights (the legal framework for the case) cannot do that, nor should ir.
The remedy will be a 'declaration of incompatibility', an admission that the Government will have contrived to pass a law – VAT on school fees – which is in contradiction of existing laws, including numerous Education Acts, charity legislation, the Human Rights Act, but also Labour's promise to uphold human rights in its manifesto. The law is clear: no child shall be denied access to education, nor should they be discriminated against, either by virtue of their special educational needs or their parents' religious beliefs.
In the event of losing in court, the question would therefore immediately revert to Parliament to resolve. This would be an assertion of Parliament's Supremacy and of democracy, not a denial of it. Furthermore, if the Human Rights Act did not exist and we pulled out of the ECHR, one hopes that a replacement British Rights Act would contain the same protections for children (and for recent free speech claimants), which are anyway well established and understood.
Clearing up this point is very important. Because the big objection to this court case you will hear from the Government and others, is that it is democratically wrong for Human Rights law to overturn a tax measure approved by Parliament and in Labour's manifesto. The answer to that objection is simple: it will not do that. On the contrary, the matter will revert to the democratic system to be sorted out. A victory would be an assertion of Parliamentary supremacy, not a denial of it.
What about the merits of the case? How can it be possible to argue that there is supposedly a legal right to send your child to Eton?
This is another misconception. That is not what is being claimed. It is about the specific rights of special needs children and those whose parents have strongly held religious beliefs – four of the parties are Christian schools. Etonians are not relevant. One of the ironies of this legislation is that it will insulate wealthy schools further from competition as they can put the full 20 per cent VAT increase on fees, and then claim it back on their capital expenditure.
The argument is very simple. Education is compulsory, for good reasons. It therefore follows that children have certain rights. For example, you cannot force a child with special needs, be they a disability, health or otherwise, into an unsuitable school, nor can you force a Jewish child onto a Christian school or a Christian one onto a Muslim school, or vice versa.
These are rights which can be traced into the Education Acts of the 19 th and 20 th Centuries. They have never been controversial, nor should they be in a pluralistic society which values its culture.
In order to facilitate both these rights and the general public benefits which arise from education, it has been the case since the Tudor era that education has been protected in law as a charitable purpose, like welfare and religion. Like other charities and indeed nurseries and universities, schools are not taxed.
This is not a loophole but a deliberate policy. The social bargain has been that if you want or need to send your child to a suitable school, at your own expense, good for you. That is a good thing, does no harm to anyone else, benefits both society and the taxpayer (who no longer has to pic up the tab) and should be encouraged.
This is what is known as a norm, to be found not just in Britain but right across the Western world. There is no tax on education in any serious country. New Zealand has a small tax but this is offset by a tax credit. Nor do we tax nursery fees, or university fees and most further education is also exempt.
So, if an arbitrary act by the Government, such as putting on 20 per cent VAT half way through a school year, causes schools to close or forces children to leave their school (as it has done) and there is no suitable place locally (as in thousands of cases there is not), it is not just an inconvenience, in defiance of our laws, but an outrage, an act of undemocratic cruelty, overturning long cherished rights and assumptions which are there for very good reasons.
The Government would be on stronger ground if Ministers said that they had considered all this and it was being implemented carefully, in stages, with some exemptions. But that is not their position. They gave no proper thought to this measure, which was motivated by spite. They have lied when they say it will raise £1.6 billion for state schools. Its consequence has been chaotic, further overloading the special needs system and causing distress to blameless parents and children.
It is a matter of common sense that the Government might well lose this case. And if it does, Bridget Phillipson will deserve what is coming.