Education is zero rated for VAT across the EU. It is not permitted to add VAT on top of fees for education. End of. So forget adding VAT to school fees to subsidise the/any government's cheapskate instincts.
There is, or should be, a real societal debate about what proportion of tertiary education is needed to keep the economy revving well. I suggest that it's lower then the 50% Tony Blair wanted, but well above the 7% who went to university with me in 1974. For the sake of balance, set the line at the top 20%. But when I went to uni, we had means-tested grants (no fees), so my parents paid the maintenance (living cost) element until they were divorced, after which I had a full grant.
What does society want and expect from education? Is it to enrich the individual, or to enable wealth creation, or to enrich society?
What proportion of the population value education as a means of improving society?
Is education always and only about social mobility?
Is school a method of socialising young people until they are fed to the economic machine, to pay tax? Or child care to release employees into paid work and paying tax?
What responsibility should parents bear in getting their children ready (daily) to be educated?
Is there a cultural/social benefit that flows from having a well educated population?
What is a good (as opposed to a functional) basic education?
Considering that a significant % of students leave secondary education (now aged 18) with only a frail grasp of reading, writing and arithmetic, why are we keeping them in school past their intellectual ability to learn? Prove that you can pass a standard level test to leave school, and if you want, leave. You can read and write.
Most of these questions did not matter much to most of the population even 50 years ago. But they matter, and how they are fairly paid for matters even more. We need the best minds, but can't discriminate against the dullards, who have an equal right to live a dignified life.
Increasingly I think that a universal very basic per capita income from age 16, without social housing, or any extra benefit entitlements for children or accommodation, is the way ahead. I can already hear the screech of indignation from the disabled and mentally infirm; but am unsure how society protects the most vulnerable.