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AIBU?

Do you think labour will actually implement 20% vat on school fees?

1001 replies

labpit · 28/01/2024 18:51

We have two in Year 7 and year 10 and I am not sure what we will do if this happens. It is a certainty do you think?

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Am I being unreasonable?

236 votes. Final results.

POLL
You are being unreasonable
51%
You are NOT being unreasonable
49%
Newbutoldfather · 31/01/2024 08:00

@Absolutely45 ,

You are spot on.

We need to raise more money and also get a lot of the long term sick back to work. Ultimately, we need to raise more and try to pay out less to healthy people who don’t work.

No one seems to like the IFS study, but they are a respected economic source, and they say that 3-7% of pupils will probably leave and the policy will net/net raise 2% of the education budget, a not insubstantial amount.

The ISC is far from independent, in fact it is a pressure group for the sector.

So, as for ‘illiteracy’ of any kind, I think understanding the independence of sources comes quite high up the list!

The reality of this is that it will be a tax on the wealthy, probably equivalent to raising top rate tax 2% or so. Personally, I always think taxes on expenditure are better than taxes on income.

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Araminta1003 · 31/01/2024 08:03

The 2022 ISC census will be out of date now. There was a temporary rise in privately educated kids in some areas due to Covid and many state schools failing to provide any online learning whatsoever. There were also large relocations out of London/SE due to Covid which may skew the figures further.

Since then we have had a cost of living crisis and higher mortgage rates so the private school parent group will also be affected by that. And we now have a demographic issue with not enough children being born.

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EasternStandard · 31/01/2024 08:08

It’s interesting Reeves has said no to bonus cap today

My take is Labour brought in popular but economically poor policies too early and now they, and we, are stuck with them.

What a shame

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Araminta1003 · 31/01/2024 08:10

@Newbutoldfather - the IFS has since published a YouTube basically highlighting that the estimated income generated is small in the overall scheme and that one may want to do this for “ethical” reasons.

They are clearly uncomfortable with their research being so widely jumped on by Labour Politicians when there are many caveats highlighted in it anyway.

Obviously the ISC represents its members but if they highlight that a number of players are likely to go bust then one should listen.

This is clearly not a fully thought out policy but I doubt they can backtrack now.

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Absolutely45 · 31/01/2024 08:12

EasternStandard · 31/01/2024 07:56

And I get it’s bugging you but as you say you want facts. So don’t include yourself under the term

There’s many more who do not want the analysis

More rudeness!

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Spendonsend · 31/01/2024 08:13

The ISC is lobbying hard against this proposal and will be presenting a worst case scenario but they do have feel for the size and nature of their membership.

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EasternStandard · 31/01/2024 08:14

Absolutely45 · 31/01/2024 08:12

More rudeness!

I’m saying you want facts you are different to many who don’t

Rudeness to you? Ok…

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Newbutoldfather · 31/01/2024 08:16

@Araminta1003 ,

But I don’t really get the issue of schools closing.

Schools in the state sector are forced to close or merge all the time. If a school cannot attract enough pupils to be viable, it closes.

By definition, there are always enough private school places to fulfil demand. If that were not the case, new ones would open (as they do all the time). That is why the annual scramble for places is such a farce and why you find pretty dumb (not the most educationally sensitive word) pupils at supposedly academically competitive schools (not the very very elite ones, but 95%).

This is where the ISC is disingenuous.

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Absolutely45 · 31/01/2024 08:16

Araminta1003 · 31/01/2024 08:03

The 2022 ISC census will be out of date now. There was a temporary rise in privately educated kids in some areas due to Covid and many state schools failing to provide any online learning whatsoever. There were also large relocations out of London/SE due to Covid which may skew the figures further.

Since then we have had a cost of living crisis and higher mortgage rates so the private school parent group will also be affected by that. And we now have a demographic issue with not enough children being born.

Possibly, though numbers are up over the last 30 years too.

As i said if the policy is counter productive, needs to be dropped, Labour seem able to U turn, Bankers bonus caps, will not be re introduced by Labour, which does drive a coach n horses through the "envy and jealously" argument.

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Spendonsend · 31/01/2024 08:28

Newbutoldfather

It is a market that will fluctuate due to demand.

But as someone working in a state school with falling rolls and the consequences of that, i think you will find local communities, parents and staff do get pretty upset about it!

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EasternStandard · 31/01/2024 08:31

Slightly different topic but since the thread has been going a while

A few mentions on inequality by pp on this thread - how do you feel about Reeves no bonus cap?

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ChardonnaysBeastlyCat · 31/01/2024 08:31

Absolutely45 · 31/01/2024 07:51

You *and others) keep insulting people with "Economic illiteracy" why? adds nothing to the discussion & what makes you so sure you re right?

I consistently say 50/50 on this as i want to see Labours workings.

Taxing the better off is how it has to go now, the UK has too many people who have SFA.

Income, property, assets and unearned income will have to be taxed more, as the IMF have just said the UK needs to re build it infrastructure and build in more monetary resilience.

Even hunt is now saying he has little room for tax cuts.

Analysis by Civitas of Office for National Statistics (ONS) data from 2020-21 showed a record 54.2% of people (36 million) now live in households which received more in benefits than they contributed in taxes. This includes non-cash benefits such as NHS and education services.

This is why it's illiterate. There are more people taking out than there are contributing.

Maybe focus on that, instead of trying to work out how to squeeze this who are paying even further? Encourage them to work, for more than the requisite few hours a week? Make sure the employers don't rely on zero hour contracts?

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Dothefandangos · 31/01/2024 08:46

‘We have two in Year 7 and year 10 and I am not sure what we will do if this happens. It is a certainty do you think?’

yes, so plan. Or speak to the school, they’re a business and you’re a customer.

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IgglePiggledidawiggle · 31/01/2024 08:47

@Absolutely45 This is why it is economic illiteracy. You have 554,316 children in independent school. This means that considering it costs £7,690 in funding per child, that means that those within the system save the Treasury £4.262bn. Now obviously not all of those kids will go into the state system, but let's say 20% do suddenly that's an extra cost of 852m compared to a supposed tax raise of £1.5bn. Not so much anymore is it?

Now considering that's the tax raise, that assumes that an average school fee is about £13,530 (which I guess is reasonable) but start adding 20% - that becomes £20k in two years and growing. This means more and more will be dumped out of the system so whilst on principle the Treasury take will increase with the fees that won't happen as it will be an ever smaller pool and the Govt will be paying for educating kids with less money in the same size schools as before because no, the schools won't just hand over their land as it's their property and we aren't a communist state where property can just be requisitioned.

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bluewanda · 31/01/2024 08:53

It’s interesting Reeves has said no to bonus cap today

Ugh. Labour really are just the Tories by another name, aren’t they?

I’m 100% for the rich paying more tax, but TBF not everyone who sends their kids to private school is loaded. I know this from personal experience. I’d rather see bankers and the like, who are earning enormous salaries (and ARE very rich) get an income tax rise.

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Newbutoldfather · 31/01/2024 08:53

@ChardonnaysBeastlyCat ,

It is funny how certain industries (finance in particular) believe in unbridled capitalism and ‘talent’ in the good times, but wholly support full on redistribution (bank bailout) in the bad.

A lot of our issues spring from an over reliance on finance and a small number of related service industries. Yes, people in these businesses pay a lot of tax, but they pay a lot of tax because they have extracted a lot of money from more economically productive industries and individuals (pension investments)

Brexit also didn’t help us, and there is a lot of greed and corruption about.

Why we have got in our current economic predicament is multifactorial and complex, but it really isn’t just the ‘talented’ having to bail out an increasing number of scroungers. To believe that really is economic illiteracy.

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ChardonnaysBeastlyCat · 31/01/2024 08:58

Newbutoldfather · 31/01/2024 08:53

@ChardonnaysBeastlyCat ,

It is funny how certain industries (finance in particular) believe in unbridled capitalism and ‘talent’ in the good times, but wholly support full on redistribution (bank bailout) in the bad.

A lot of our issues spring from an over reliance on finance and a small number of related service industries. Yes, people in these businesses pay a lot of tax, but they pay a lot of tax because they have extracted a lot of money from more economically productive industries and individuals (pension investments)

Brexit also didn’t help us, and there is a lot of greed and corruption about.

Why we have got in our current economic predicament is multifactorial and complex, but it really isn’t just the ‘talented’ having to bail out an increasing number of scroungers. To believe that really is economic illiteracy.

It's the reality at the moment.

And no one talks about "talented" people bailing others out. Work ethic has nothing to do with talent. No one talks about 'scroungers" either, but rather about the reliance on zero hour contracts and the inability of the JC to help people into work.

You are bringing your own illiterate bias into this.

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EasternStandard · 31/01/2024 09:02

bluewanda · 31/01/2024 08:53

It’s interesting Reeves has said no to bonus cap today

Ugh. Labour really are just the Tories by another name, aren’t they?

I’m 100% for the rich paying more tax, but TBF not everyone who sends their kids to private school is loaded. I know this from personal experience. I’d rather see bankers and the like, who are earning enormous salaries (and ARE very rich) get an income tax rise.

Private schools really are being roasted, the sacrifice for the public vote

A tiny amount of people hit hard to make others feel a bit better

Little to no gain

The FS is to be fostered, bloody hell they’re really going for it on battering education

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Another76543 · 31/01/2024 09:12

EasternStandard · 31/01/2024 08:08

It’s interesting Reeves has said no to bonus cap today

My take is Labour brought in popular but economically poor policies too early and now they, and we, are stuck with them.

What a shame

I agree. Perhaps it has dawned on them that those they have previously being against are actually adding quite a lot to the UK economy. I think there are quite a lot of voters (either swing voters, or previously Conservative) who would genuinely have thought about giving their vote to Labour, but won’t because of the VAT on education policy. It’s not even just about that one specific policy. It’s to do with the fact that people worry what will come next. You can’t keep taxing the minority more and more to pay for the rest of the population. There comes a tipping point where people say enough is enough. The wealthiest and the higher earners are precisely the ones who will find it easier to move abroad. I’m already encouraging my children to look at jobs, and perhaps universities, abroad. I genuinely can’t see why they would choose to stay here.

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Papyrophile · 31/01/2024 09:23

Swing voter here, and DC is now an adult so I don't have skin in the game any more. But I agree with @Another76543 saying that people will move abroad. We're in the process of retiring but still paying 45% tax which I appreciate is privileged but it's also the proceeds of 45 years work and entrepreneurial risk taking; there have been a lot of very lean years over the decades. And yes, we can move overseas, and are seriously considering it.

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Newbutoldfather · 31/01/2024 09:27

@Another76543 ,

Abroad where?

If you truly want lower taxes, there is only really U.S to move to, or maybe Switzerland or a tax haven if you are truly wealthy.

The vast majority of similar countries will tax you just as much, and not have a pampered private school system.

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Araminta1003 · 31/01/2024 09:29

It’s interesting Reeves has said no to bonus cap today

It means our banks are competitive against EU banks. And if we want to join the SM/CU we have a negotiation point? (One the EU may actually care about?)
Previously you just had unproductive bankers insisting on too high salaries which also exposes banks as they cannot go up and down with salaries quickly and given current interest rate and exchange rate volatility it may help them.
But really this is about global competition. HMRC needs that cash from financial services and the 45% tax rate payers (plus NI) on top. So as long as they are paying that and they have to account for it (we can rely on banks to do that) I am OK with this for now. As a country we are losing a lot of tax revenue on the black market. At least banks are not a black market as far as PAYE is concerned.

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ElevenSeven · 31/01/2024 09:30

The wealthiest and the higher earners are precisely the ones who will find it easier to move abroad.

This is absolutely the case in my organisation (finance). Multiple people in my teams have put their hands up for transfers to other offices in Asia and ME.

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EasternStandard · 31/01/2024 09:31

Araminta1003 · 31/01/2024 09:29

It’s interesting Reeves has said no to bonus cap today

It means our banks are competitive against EU banks. And if we want to join the SM/CU we have a negotiation point? (One the EU may actually care about?)
Previously you just had unproductive bankers insisting on too high salaries which also exposes banks as they cannot go up and down with salaries quickly and given current interest rate and exchange rate volatility it may help them.
But really this is about global competition. HMRC needs that cash from financial services and the 45% tax rate payers (plus NI) on top. So as long as they are paying that and they have to account for it (we can rely on banks to do that) I am OK with this for now. As a country we are losing a lot of tax revenue on the black market. At least banks are not a black market as far as PAYE is concerned.

It’s fine by me from either party - although I have seen some pro Labour posters already applaud it when they were likely the opposite under this gov. That’s loyalty for you

So sure go with it but it spotlights even more the ludicrous stance of damaging another successful sector for little economic gain

They probably don’t even need it for votes anymore

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Papyrophile · 31/01/2024 09:32

Probably via a property purchase or pension visa scheme, possibly in Asia.

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