Jack Wheelan
Labour have dropped their commitment to scrap charitable status for private schools, but have kept their promise to put 20% Value Added Tax (VAT) on private school fees.
Money raised would be reinvested into the state[…]system
This is a shift from the Labour Party position previously, where they had a commitment to end charitable status for private schools (meaning they would then pay tax on their annual profits), in addition to the 20% VAT on fees.
All of the money raised would be reinvested into the state school education system.
Labour claims that they can still put VAT on private school fees without removing their charitable status.
A net positive of approximately £1.4 billion a year
The Institute for Fiscal Studies estimated that putting a 20% tax on private school fees could lead to 5.2% of the private school population, or approximately 28,304 pupils, dropping out of private school due to unaffordability, when using the latest Independent Schools Council (ISC) figures.
By considering the average amount of money that would be generated by VAT across the private school student population (taking into account the average private school fee and the pupils lost to the state sector, as mentioned above), and then factoring in the added cost to the state school education budget from children moving back into the public sector, the policy would raise a net positive of approximately £1.4 billion a year.
“Recruitment of more than 6,500 new teachers and ensuring access to mental health counselling” [Lilian Greenwood]
Sir Keir Starmer, Leader of the Labour Party, has stated that he does not believe that private schools would have to pass the extra cost onto fee-paying parents, and that would be a choice private schools would have to make.
Impact asked local Labour MP for Nottingham South, Lilian Greenwood, for comment and she replied with this:
“A Labour Government won’t get bogged down in the complexities of changing the charitable status of Eton and other private schools: we will end the tax breaks they enjoy and instead invest in excellent state education for every child … [such as] funding the recruitment of more than 6,500 new teachers and ensuring access to mental health counselling in every school”.
Impact also asked the Nottingham University Conservative Association of what they thought of the change of policy, and their president Ted Grainger had this to say:
“This policy will mean that only the very wealthy in society will still attend private schools” [Ted Grainger]
“It is utterly unsurprising that [Sir Keir Starmer] has renegaded on the plan to remove charitable status from private schools … I sincerely hope that he will soon flipflop on the plans to introduce VAT on school fees.
It is a childlike plan to address a perceived unfairness in society without any apparent realisation that the policy will only create a race to the bottom … this policy will mean that only the very wealthy in society will still attend private school and force the taxpayer’s record high burden to increase.”
Jack Wheelan
Featured image courtesy of Heidi Fin via Unsplash. Image license found here. No changes were made to this image.
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