Private Schools, Human Rights and Parliamentary Privilege

On 13 June 2025, the Administrative Court handed down its judgment in ALR and others v Chancellor of the Exchequer [2025] EWHC 1467 (Admin), a landmark judicial review addressing the Government’s removal of the VAT exemption for private school fees (the “Exemption”). The case attracted significant attention as one of the first substantive legal challenges to a key Labour manifesto pledge and raised issues at the interface of taxation, property, education, and human rights. In its decision, the Court reaffirmed key principles defining the limits of judicial review and the protection of property rights under the European Convention on Human Rights (“ECHR”), and clarified the wide discretion Parliament enjoys in taxation and economic policy, along with the limited scope for judicial intervention. 

Ahead of the 2024 general election, Labour (then in opposition) committed to removing the Exemption. This commitment came to fruition in sections 47 to 49 of the Finance Act 2025, which formed the basis of the judicial review challenge. Three distinct groups – students, their parents, and schools – each brought related but separate claims, addressed individually by the Court.

The Claimants argued that the removal of the Exemption was incompatible with ECHR rights concerning property (“A1P1”), education (“A2P1”) and non-discrimination (“Article 14”). The Court also addressed the admissibility of a parliamentary report considering the freedom of speech and debate within Parliament (i.e., article 9 of the Bill of Rights (“Article 9”)) and the wider principle of parliamentary privilege. As detailed further below, the Court rejected all claims:

1. A1P1 – the Court reiterated the distinction between business goodwill (which may constitute “property” under A1P1) and mere expectations of future income (which are not considered property). The Court held that the concern of the Claimant schools regarding their viability in light of higher fees for parents amounted to a concern only about future income and therefore was not protected by A1P1. As for the Claimant parents, the Court held that not every decision to tax gives rise to a deprivation or interference with the possessions of that taxpayer – especially in a situation where that taxpayer is not obliged to send their children to a private school. The Court held that, even if there was an interference with property rights, it would be justified.
2. A2P1 – the Court held that the case law of the ECtHR makes clear that states have a broad margin of discretion in respect of this right, and any regulation should not “impair the very essence of the right”. Despite the removal of the Exemption, the “essence” of the right remained intact, since students could still attend a mainstream state school. Furthermore, the lack of an exemption of VAT for specific student groups did not breach Article 14, notwithstanding its narrower margin of discretion.
3. Article 14 – the Court considered arguments that the measure had a particularly severe impact on certain groups (such as faith communities and children with special educational needs) and assessed these claims through the lens of Article 14. The claimants relied on both indirect discrimination and the Thlimmenos principle (which addresses the failure to treat persons differently whose situations are significantly different).[1] While the Court accepted that Article 14 was engaged and recognised the uneven practical effects of a removal of the Exemption, it found that Parliament had actively considered and deliberately rejected the carving out of certain groups. Given the legitimacy of the policy aims and the risk of administrative complexity or abuse, the Court concluded that Parliament’s decision not to make specific exemptions was justified, and that there was no unlawful discrimination.
4. Article 9 and parliamentary privilege – addressing a dispute between the parties about evidence, the Court held that reports of the National Audit Office (“NAO”) do attract the protection of Article 9 and therefore cannot be adduced in Court in respect of disputed issues. The Court did, however, allow the reports to be adduced as evidence of facts agreed by the parties.

This article explores the key issues and findings in detail.

Business or tax as protected property?

The Claimant parents argued that the removal of the Exemption interfered unlawfully with their rights to property under A1P1. The Court rejected this, disagreeing with the submission that the Upper Tribunal decision in Reeves v HM Revenue and Customs [2018] UKUT 293 (TCC) (“Reeves”) was authority for the principle that every decision to impose tax amounts to a deprivation or interference with the taxpayer. The Court distinguished Reeves as that case concerned capital gains tax in the disposal of a limited liability partnership, which the HMRC had conceded engaged A1P1. The Court agreed with the Government that none of the parents were obliged to send their children to private schools, and therefore A1P1 was not triggered.

The Claimant schools, on the other hand, argued that those who run and own schools have a possession, being their business and livelihood, which is capable for protection under A1P1. The Court disagreed, deciding that the removal of the Exemption impacted an expectation of future income which is not protected by A1P1, as distinguished from marketable good will, which is capable of protection. The Court acknowledged that the distinction by Strasbourg of marketable goodwill and the expectation of future income is often a hard line to draw; however, in this case, it was clear that the Claimants fell on the wrong side of the line. Additionally, the Court was concerned that a finding of interference in this case would allow businesses to bring a complaint whenever there is a change in tax code which may make consumers less likely to purchase their goods.

Parliament’s leeway: wide discretion in tax and social policy

The Court’s dismissal of the A1P1 and A2P1 claims centred on taxation and social policy decisions resting primarily with Parliament. Courts review legality only; they do not substitute their judgment for that of lawmakers as to the merits of a policy. Parliament is therefore afforded a wide margin of discretion and appreciation (i.e., the degree of leeway afforded to the state in its fulfilment of the ECHR obligations) in matters of taxation, for several key reasons: 

1. the nature of taxation, redistributive and education policies. As the Court did not consider there to be an A1P1 interference, there was no need for the Government to raise arguments justifying that interference. The Court found that, even if the tax imposition could be said to interfere with possessions, such interference would be justified in the general interest, given the wide margin of appreciation for legislatures in economic matters. 
   
   Similarly, the Court reiterated Strasbourg’s case law which makes clear that states have a broad margin of discretion on the right to education in A2P1. Education policy is acknowledged as an area which often contends with the limited resources of the state. Therefore, states are required to make difficult policy decisions, some of which will be controversial. For that reason, among others, it is generally sufficient for A2P1 to be upheld where there is a mainstream state school that a child can attend, irrespective of whether a state is hindering access to private schools. This reflects the protection of the “essence” of the right.
2. the removal of the Exemption reflecting manifesto commitments and having undergone parliamentary scrutiny. The Court placed significant weight on the fact that the provisions in question were a clear manifesto commitment, which had been debated in Parliament and had been ultimately accepted by the electorate in voting for a Labour government. The Court was persuaded by the fact that the Government had acknowledged and addressed the possible impacts of legislation (including many of those raised by the Claimants) but still considered the benefits of the increased taxation revenue to outweigh these concerns.
3. the legitimacy of aims and rational objectives of the removal of the Exemption. Applying the Bank Mellat v HM Treasury No 2 [2013] UKSC 38 four-stage test to proportionality, the Court considered the removal of the Exemption to be proportionate.  The aims of the provisions – which included raising revenue for public services – were regarded as legitimate aims for the purpose of A2P1, and the removal of the Exemption was rationally connected to these aims.
   
   The Claimants argued that less intrusive measures could have been used to achieve these aims including: (i) introducing the provisions at the start of next academic year rather than in January 2025; or (ii) providing exemptions to groups of students. The Court, however, considered these alternatives measures to be an unacceptable compromise of the objective of the measures, given the concerns over reduced revenue and the practicality of providing an exemption to some students.

Drawing boundaries: what counts as “proceedings in Parliament”?

Some claimants sought to rely on excerpts from parliamentary reports which fell into two categories: (i) reports from parliamentary committees; and (ii) a report from the NAO. The Speaker of the House of Commons (who was an interested party to the proceedings) objected to the admission of these excerpts, arguing that it infringed Article 9 and the wider principle of parliamentary privilege, as the reports would have been relied upon to establish facts that were in dispute. While the parties eventually agreed that the parliamentary committee reports were protected by parliamentary privilege, some claimants sought to use the NAO reports to adduce evidence of disputed facts, which the Government opposed. 

In considering the arguments, the Court noted five key principles relevant to the issue:

1. the scope of Article 9 is a matter for the courts. When considering these issues, the courts will pay careful regard to views expressed by Parliamentary authorities, however, these are not determinative.
2. meaning of “proceedings in parliament”. The Court noted that “proceedings in parliament” mean the actions and decisions of the Houses of Parliament, including the “formal conduct of their members which informs and triggers those actions and decisions” including “voting, giving notice of a motion, or presenting a petition or report from a committee”. The basis of this definition is that the Parliament must be free to conduct its legislative business without interference from the Crown or the Crown’s judges.
3. separation of powers. The Court reiterated that parliamentary privilege is underpinned by the separation of powers, requiring the court to “abstain from interference with the functions of the other, and to treat each other’s proceedings with respect”.
4. parliamentary privilege extends to those who give evidence before committees. The privilege is not limited to only the words and actions of members of Parliament but also to those who give evidence before the committees established under their standing orders.
5. parliamentary privilege extends to reports. In particular, this includes reports that are presented in compliance with the direction of His Majesty, following an address presented to him as resolved by the House of Commons.

On this basis, the Court held that NAO reports qualify as ‘proceedings in parliament’. Applying R v Chaytor [2010] UKSC 52, the Court focused not on the activity’s exact connection to Parliament’s core business, but on whether denying privilege would adversely affect parliamentary business. The Court found that admitting the NAO reports as evidence of contested facts would risk such an impact. 

As to the admissibility of the reports, the Court was content in allowing the reports to be used in evidencing facts that are agreed by both parties (as was the case here, with the parties presenting an agreed schedule of facts). To the extent the excerpts of the report were to be used to evidence contested facts, these would be inadmissible.

Takeaways: judicial restraint, political choices

The Court’s judgment sends a clear signal: shifts in taxation policy, especially those backed by a democratic mandate, attract only limited judicial scrutiny. For parents and schools, the decision underscores the firm boundaries of property and education rights under the ECHR. Ultimately, the balance between political choices and individual interests in taxation remain firmly in Parliament’s hands. At the same time, the decision is an important reminder of the breadth of parliamentary privilege. Parliamentary privilege is not always asserted when committee and NAO reports are submitted as evidence, and practitioners should bear in mind its considerable scope.

[1]    Thlimmenos v Greece (2000) 31 EHRR 15