ALR (by their litigation friend ASG) v Chancellor of the Exchequer

Hearing dates: 1 st – 3 rd and 14 th April 2025

Approved Judgment

This judgment was handed down remotely at 10am on Friday 13 June 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

Dame Victoria Sharp (President of the King's Bench Division), Lord Justice Newey and

Introduction and summary

These judicial review claims concern a change in tax law heralded in the 2024 Labour Party manifesto. For the first time, value added tax (“VAT”) is to be payable on private school fees. The change has legal effect under ss. 47–49 of the Finance Act 2025 (“the challenged provisions”). The claimants are children attending private schools, the parents of some of these children and schools. The individual claimants say that the change will make the fees unaffordable, so the children are likely to have to leave the schools they currently attend. The schools say that it will or may make them unviable.

There are three sets of claims: Claim 1 (AC-2024-LON-004232), Claim 2 (AC-2025-LON-000053) and Claim 3 (AC-2025-LON-000133). They have been heard together at a rolled-up hearing. The claimant children appear by their litigation friends, who are in most cases their parents, who in some cases are also claimants. In Claim 3, four of the claimants are private schools or the corporate entities which run them.

Some of the children have special educational needs (“SEN”); some are adherents of a particular religion; some say that they need to receive education in a single-sex environment; and some are foreign nationals who say that they need access to a foreign curriculum. A summary of the circumstances of the individual claimants and the claimant schools is set out in Annex A to this judgment. All the claimants seek declarations under s. 4 of the Human Rights Act 1998 (“ HRA”) that the challenged provisions are incompatible with the European Convention on Human Rights (“the Convention”). The children and parents rely on the rights guaranteed by Article 2 of the First Protocol (“A2P1”) and Article 14 read with A2P1. The Claim 3 claimants also rely on Article 1 of the First Protocol (“A1P1”) and Article 14 read with A1P1.

The defendant is the Chancellor of the Exchequer. The Secretary of State for Education was given permission to file evidence and make submissions in support of the defendant. In practice the Chancellor, the Commissioners for HM Revenue and Customs and Secretary of State (together referred to as “the Government parties”) have made joint submissions. They say, in essence, that the tax change was a manifesto commitment. It is projected to bring in on average £1.6 billion per annum in revenue, which will help deliver the Government's commitments relating to education and young people, including the 94 per cent of school children who attend state schools. The Government decided that there should be no exemptions because they would diminish the revenue generated and would be unfair, unworkable and/or administratively onerous. The design of the policy, including the decision not to make exemptions, was the subject of consultation prior to the 2024 Budget and subsequent debate in Parliament.

The court's function when considering claims of this kind is not to assess the merits of the policy behind the challenged legislation, but to assess whether it interferes with any of the Convention rights relied upon and, if so, whether the choice made by Parliament lies within the margin of discretion that must be accorded to it. We conclude that the legislation interferes with the individual claimants' rights under A2P1 and Article 14 read with A2P1. In the circumstances of this case, however, the legislature has a broad margin of discretion in deciding how to balance the interests of those adversely affected by the policy against the interests of others who may gain from public provision funded by the money it will raise. We have concluded that the challenged legislation falls within that broad margin. Even when considering the claims under Article 14, where the margin of discretion is somewhat less broad, we conclude that the challenged provisions fall within it. The Claim 3 claimants' rights under A1P1 are not engaged and in any event any interference is proportionate. In all three claims, we grant permission to apply for judicial review, but dismiss the claims.

An issue arose during the hearing about the admissibility of the reports of Parliamentary select committees and of the National Audit Office (“NAO”), given Article 9 of the Bill of Rights 1689 and the wider principle of Parliamentary privilege. We heard submissions on behalf of the Speaker of the House of Commons, the Comptroller and Auditor General and from the claimants and Government parties on that issue. Given its potential importance in other cases, we deal with it fully. We conclude that NAO reports fall within the scope of “proceedings in Parliament” and that, on the current state of the law, courts and tribunals may not admit Parliamentary materials attracting the protection of Article 9 for the purpose of establishing a contested fact. However, since most of the key facts contained in the relevant reports have now been agreed, the issue does not affect the outcome of these proceedings. We therefore set out our conclusions on this issue in a separate Annex B. The key statutory provisions relating to SEN are set out at Annex C. The agreed facts about special educational needs provision in the UK at the time of publication of the NAO Report in October 2024 are set out in Annex D.

The issues

The claims raise the following issues:

(a) Are the challenged provisions incompatible with A2P1 because they:

(i) impair the very essence of the right to education (Claim 1, Ground 1); and/or

(ii) are disproportionate in all the circumstances (Claim 1, Ground 2)?

(b) Are the challenged provisions incompatible with Article 14 read with A2P1 because they involve unjustified discrimination against:

(i) children with SEN (Claim 1, Ground 3 in respect of claimants ALR and ALN; Claim 2);

(ii) children and parents from Charedi Jewish, Muslim and Evangelical Christian families (Claim 1, Ground 3 in respect of ABC, AON, BYL, BAU, ALV and ALT; Claim 3, Ground 4);

(iii) foreign national children who require a foreign curriculum (Claim 1, Ground 3 in respect of AMR); and/or

(iv) children and parents with a claimed need for single sex education (Claim 1, Ground 3 in respect of AMB and AMY)?

(c) Are the challenged provisions incompatible with the Convention rights of the Evangelical Christian claimants under:

(i) A1P1; and/or

(ii) Article 14 read with A1P1 (Claim 3, Ground 2)?

(d) Are the challenged provisions incompatible with the rights of Evangelical Christian parents under:

(i) the second sentence of A2P1; and/or

(ii) Article 14 read with A2P1 (Claim 3, Ground 3)?

The challenged provisions

Many changes in tax law are given immediate effect before Royal Assent is obtained for the Finance Bill by a Budget Resolution of the House of Commons. Budget resolutions are not primary...