VAT on private school fees - will it change how you vote?

[Iwishicouldflyhigh]

Following on from the other interesting thread about whether it will be implemented, will this policy change how you vote either way?
For me - i've voted Labour and Tory over the years, but Tory for the most recent GE's. This year, i've been thinking seriously about how i'd vote at the next GE and it wasn't definitely a Tory vote - i was definitely a floating voter.
However, my children are at PS and so i will now most definitely be voting Tory (not just because how the VAT will seriously impact us - child number 3 will now not be going to the prep that we had lined up for her, she'll enter the local primary until secondary school - but how i think that it will affect schools negatively and children negatively).
I have a lot of left leaning friends who educate privately and whilst they cannot bring themselves to vote Tory, they won't vote Labour either at the next GE because of this policy.

It seems to me that this policy is only a vote loser (ie many Labour voters and 'floaters' who school privately won't vote for them at the next GE) and not a vote winner (ie i can't imagine that many Tory or 'floaters' will vote for Labour solely on this policy).

AiBU to think that Labour have really shot themselves in the foot with this idea?

Some politicians have used top state schools they had good outcomes anyway

Anyone not able to get a house close enough no difference

The best state schools are also suffering badly from lack of money nowadays.

You might find somewhere that offers D&T Product Design at A level?

Maths and physics will be the key A levels for the majority of engineering degrees - FM would also be helpful for many courses, and if your DC is thinking of Chem Eng then chemistry is required.

Well people will find it harder to get in one when higher earners use purchasing ability to knock them down the list

And how much are you expecting exactly from this policy?

What percentage of overall budget?

As I said I think any move to state schools will be gradual and it could mean more become good. I'm not expecting a huge change and it's not the reason I will vote labour. I just don't think it is a terrible idea although I think it will need to be introduced carefully and probably not a sudden 20% VAT rate.

@EasternStandard

When you do scenario modelling like this you use a deterministic model. You cannot run it stochastically, as you do not have enough information about the distributions of the various parameters.

That has its own set of problems, but in this case, because you have no historical data to back-test your results on, the confidence intervals are exceptionally wide, which makes the results have very low credibility.

None of this is a surprise. But the people in this thread have zero interest in the numbers. They just want to bring "the people that aspire to be more than them" down to their level.

I'm a progressive liberal, but the left in the UK is astonishingly economically ignorant, so they are to be avoided at all costs. They will just make the country poorer with their collectivist policies.

Whereas the Tories have a brilliant understanding of economics, hence Brexit.😂

Yes, in the league table of dog whistle politics taking precedence over economic reality, Brexit is definitely the winner.

Doesn’t mean this policy isn’t stupid though, just because Brexit was even more stupid.

Can I remind everyone here pointing to 'selection by postcode' by way of trying to imply that there's as much inequality within the state sector, as there is between the state sector and the private sector, that the very very highest ranked state schools still have roughly half the number of teachers per pupil as pretty much any private school, and more pupils eligible for free school meals than any private school in the entire country.

Taking the best performing state schools according to league tables, Wilson’s has 2.9% on FSM, St Olaves 2.4%. Private schools often have around 20% on means tested bursaries. Not all of those children would qualify for FSM, but it’s likely that some would. There is more inequality between the lowest and highest performing state schools than there is between the highest performing state schools and the average private school.

From the Sutton Trust

• This study looks at the proportion of pupils eligible for free school meals (FSM) at the top 200 secondary state schools' (6% of schools), and - to gauge the extent to which these schools reflect their local areas - the levels of FSM eligibility in the postcode sectors in which the schools are sited.
• The study finds that the overall rate of FSM eligibility at the top schools is 3.0%, compared to a national secondary school average of 14.3%. Only 6 schools - or 3% - within the top 200 have FSM rates which are equal to or above the national average; two thirds have 2% or fewer of pupils eligible for FSM. The intake of the top 200 is significantly more affluent than the school population as a whole.
• The findings also suggest that the top schools do not reflect the social make up of their immediate areas: the average rate of FSM eligibility in the postcode sectors of the top 200 schools is 12.3% - almost 10 percentage points and more than four times higher than the schools' average rate. In only 11 of the top 200 schools does the FSM eligibility rate reflect that of their local area.
• Eighty-percent of the top schools are grammar schools, and although these were found to be more socially exclusive - with an overall proportion of pupils eligible for FSM of 2.1%, compared to 6.0% at the comprehensives - much of the difference can be explained by the fact that grammar schools are sited in more affluent areas, with average FSM rates of 11.7%, compared to 15.7% for comprehensives. The overall gap between school and area rates is similar for both school types - at just under 10 percentage points - indicating that the intakes of both are similarly unrepresentative of their local areas.
• The reasons for the under-representation of children from poorer backgrounds at top state schools are undoubtedly complex. It is clear, though, that the admissions system is not operating equitably and is in need of review, and that more needs to be done to raise standards earlier down the educational chain. The unevenness of the state school system serves to exacerbate existing inequalities, and we see its consequences in the under-representation of those from lower social classes and poorer areas in higher education, particularly at the leading universities.

"Taking the best performing state schools according to league tables, Wilson’s has 2.9% on FSM, St Olaves 2.4%. Private schools often have around 20% on means tested bursaries."

Wilson's and St Olave's are super selective grammars that admit double the national average of pupils from private primaries. You won't find me defending the 11+ .

The fact you had to use an example of two super selective grammars to make your point is a bit lame.

And fewer than 1% of bursaries that are awarded to children at private schools are full bursaries.

BTW - thanks for all that evidence from The Sutton Trust. It's irrelevant to the point I was making which holds - state schools have double the class sizes of private schools and often less than half the income per child. In other words there is huge inequality in terms of resources between state schools and private schools.

I'm not going to argue btw that there are no problems when it comes to social selection in regard to state school admissions. But it pales into comparison when comparing it to the degree of social selection in private schools.

Would also argue that when you talk about 'top schools' the stats look very, very different when you look only at progress 8 scores, which measure progress while at a school, rather than headline results in year 11 and 13, which by and large reflect the characteristics of the pupil cohort. Take high achieving middle class kids in, turn out high achieving middle class kids out.

The best progress 8 scores are at Michaela School in London, where 26% of kids are on free school meals.

The fact you had to use an example of two super selective grammars to make your point is a bit lame.

It’s not lame at all. Who do you think will try to access super selectives with this VAT policy in place?

"No way of predicting human behaviour?"

Yet thats exactly what you and others have done but repeatedly telling us all that there will be a mass exodus from the PS sector.

how do you know this?

or is it an assumption? along with "oh you lot don't understand economics, but we all do...." pathetic.

The best progress 8 scores are at Michaela School in London, where 26% of kids are on free school meals.

A good example which highlights how some children can access a school providing excellent outcomes, whereas others from similar backgrounds end up at schools where children have outcomes which are no where near as good. It proves the point that education is very much a postcode lottery and causes huge inequality. How come some schools have massively better outcomes despite having children from similar backgrounds and with the same state resources?

I haven’t said there will be a mass exodus. I’ve said some will move, likely at natural breakpoints in education. It’s already happening. I have merely pointed out that the IFS report and forecasts are unlikely to be accurate.

Why?

I find this level of questioning is bordering on arrogance, the IFS is a highly respected organisation.

If the IFS had said it was a poorly thought out policy, i would be with you but they didn't.
Evidence shouldn't be dismissed just because it disagrees with your political beliefs.
This is how we ended up with Brexit "Don't need experts ..."

I thought you did "Schools will close" type stuff.

From my understanding, the IFS figures assume that for every child that leaves the private sector, every penny saved on school fees would then be spent on goods and services subject to the standard VAT rate.That’s not going to happen. Some will be spent on foreign holidays, pension contributions and savings (none of which attract VAT). That’s why I’m sceptical about the forecasted figures.

Also, some schools will close; the cheaper schools often catering to SEN children. Some private schools have already closed due to increasing financial pressures. Our friends had to suddenly find a new school when they were told theirs was closing.

Absolutely agree Another. I’ve just had a look at the IFS report. It has massive massive holes in its reasoning. Annoyingly I can’t cut and paste but there is a paragraph where they basically say “we have assumed there is no change in labour supply decisions or saving decisions” and “if parents stop spending £15k on school fees they are likely to spend it on other goods and services generating VAT”.

Knowing a lot of private school parents I find this incredibly unlikely.

First, I suspect there are a lot of parents who would simply choose to work less if they weren’t paying school fees (eg one parent would stop working or go part time). So that would affect the income tax take, as well as not generating VAT. Indeed such families might reduce other spending too.

Second, a lot of parents would choose to save the money - pay off mortgage, top up pension. No VAT there, and in fact, increased savings and pensions may lead to these people leaving the workforce earlier, so again a reduced income tax take.

Another likely use for any “freed up” money is tutoring and extra curriculars, which don’t generate VAT.

All of this is IMO far more likely than the IFS assumption that these parents will just spaff the extra £15k a year on VATable goods.

Anyone who thinks this policy will make money based on such a thin and flawed analysis is barking.

Private school numbers are up year on year.

Of course not every penny but holidays do attract taxes, they are often booked through uk agents, which bring employment, uk hotels are used pre flight, as is car parking, others will spend on home improvements etc etc, all adds to UK gdp.

My point is the IFS have a good rep for making accurate forecasts.

We shouldn't just pick n chose which ones be believe.

Private school % has remained constant for 20 years. The IFS says so

@Another76543

That assumption "every penny saved on school fees would then be spent on goods and services subject to the standard VAT rate" tells you a lot about how the IFS approached this.

If you set it at 100%, you are basically saying that the result is the maximum amount of revenue you could possibly receive all other things being equal. Thats the £1.5bn- £1.7bn you often seen quoted on here.

Setting it at 50% (for example) would have to be justified (many options like pension, salary sacrifice, savings, investments etc), and the IFS was not asked to do that. They were asked about maximum potential revenue, and not on a realistic basis.

It really does not take an economic genius to understand that the 100% is not going to be correct, and that the modelled £1.5bn-1.7bn is likely going to be sub £1bn once you adjust the modelling for changes in economic behavior (my own view is about c£0.7bn).

There is some information out there on this behavior so Labour likely have these figures, which is why they have been rephrasing their electoral messages with "up to £1bn" messaging.

So, just to be clear:

£0.7bn (sub £1bn) will fix absolutely bupkis in the state sector.

You need 15x that amount to even touch the sides of the problem. This can only be done via the income tax structure via a hypothecated tax specifically for education.

This is a poor policy and the people supporting it in principle need to take a good look in the mirror because the politics of envy will just end up making the country less educated in the aggregate sense, and economically poorer to boot.

it’s this paragraph on the website;

“If demand for private schooling reduces as a result of increases in post-tax fees, the additional tax revenue raised would likely be unaffected. This is because any reduced revenue from VAT on private school fees will likely be made up for by higher VAT revenues on other goods and services, holding overall consumer spending constant. If parents decided to stop paying for private school fees as a result of the extra VAT, this would release spending on fees that would likely be spent on other goods and services, thereby generating extra VAT revenues.”

That’s not what the IFS is saying though. They are saying that VAT lost on school fees when parents move to state will be wholly netted off by VAT revenues on goods and services. They specifically say VAT. If you are talking about other taxes though, what about pension contributions which are likely to increase? Not only does that not bring in VAT revenue, there is a cost to the state through income tax relief.

Thanks another, I was looking at the pdf.

I see that later on in the report they do talk very briefly about possible behaviour changes like saving more or working less instead of spending on VATable goods.

But saving more is dismissed with “this would be spent eventually so same thing” (which ignores the reduced income tax if pension contributions are increased, plus delayed spending is really not equivalent to immediate spending from a govt perspective!). Working less is barely mentioned despite this having all sorts of negative impacts on tax take/the overall economy.

I agree it’s not necessarily the IFS’s fault - they were clearly told to stay within certain parameters. Trouble is those parameters are unlikely to be correct.

They way I see it is : Is private education a luxury - Yes.
Will VAT on private education sort out the state school crisis - No
Should there be VAT on Private education. Yes.

The whole argument that children in private schools free up places in state schools is asinine and really disingenuous. That's not why parents send their kids to private school. They do so (largely) because of the inherent advantages that being able to afford private schools brings children.

A fairer society would abolish private schools, perhaps there'd be a greater impetus to improve state schools if they were the only option to all.