Independent schools and Labour government

[Turquoisesilver]

Has it actually been outlined what the proposals are? I believe there would effectively be a 20% fee increase, is that correct?

As the UK is not a communist state and does not have a dictatorship, people with money will find a way to buy the best education for their kids. Those who don’t go the private school route will buy tutoring and housing in the areas that are already top notch. With the declining school age population the pressure on places at outstanding schools won’t be so great as to push these folks to poorer performing state schools.

The theory that Labour is working to will not pan out in reality.

In the end, the ridiculous tutoring system will enjoy a rapid increase in fortunes, with lots of rogue tutors benefiting and children coming under immense pressure by their ambitious parents to get places at top state schools.

I can’t see, in reality, not just theory, what problem Labour will solve if it does not at the same time put controls on house purchase near good schools and do something about tutoring. It would have to do a comprehensive dictatorship type policy or series of policy to control the entire system that exists around the school education.

The other thing to consider is this; with things as they are, universities are paying more attention to those coming through the state system. If Labour implements it’s policy and more well-off kids go to state schools, then the whole idea behind prioritising state educated kids for the purpose of socio-economic diversity breaks down or at the very least becomes very clouded.

Health care is a service. We don't charge VAT on people who 'buy their way out of the mess that is public healthcare'. These are both areas where people are free to choose to pay for a more luxury version of an essential service that is available free of charge from the state. The fact that the government chooses to target one rather than the other suggests to me that this is purely politically motivated.

NB the point that a PP made about emergency services is a good one. Everyone has to rely on it. It's still awful.

@Scaevola are you confusing me with another poster or something?

Well-off educated parents will always find a way to work with the system or around the system to gain advantage for their kids.

a lot of parents send sen kids to private schools because main stream schools are not always catering for them fully - kids who without sen would have gone into main stream.

I don't think this poster has conflated anything. She is just explaining the usual rules for input and output VAT https://www.thevatpeople.co.uk/services/general-vat-queries/advice-hub/what-output-and-input-vat

Assuming that Labour simply bring education services into the existing regime then private schools will be able to recover their input VAT so meaning that the net impact will be less than 20%. How much less will depend on the particular school.

I agree with other posters that the impact will probably not be very large either way.

I actually wish Labour would go after grammar schools, more than this. The 11 plus system really is pretty awful.

VAT is nothing to do with whether something is a luxury and never has been.

Holidays are luxuries, but there's no VAT on flights!

First class train travel is a luxury, but no VAT on public transport.

Caviar is a luxury, but no VAT on food.

If they get in and do this it will come on top of heavy increases in fees due to rising costs, our fees are increasing by 7.5%. This along with contextual uni offers will mean parents will buy into a good catchment.

I don't believe this will raise standards at all. Within my local academy it is well known that they dump the trouble makers into one of their schools, keeping their flagship school parents happy. And yes paying their 'support' fees for the advantage.

Whilst I understand the problem with the charitable status, frankly the 'unfairness' in the state system is shocking. The same kids missing out whilst the sharp elbows of the middle classes buying advantage. This will exasperate the issue.

We see who Labour really are by where they send their own children. As usual politics of envy.

I agree completely.
Anyone should be free to spend their own money on anything that is for sale ( legally!)

But why should the taxpayer fund schools that the majority of those taxpayers’ kids cannot access ( when they live within the locality). There’s no way the state should be supporting this sort of archaic ignorant system

There is going to be a gradual drop-off in private school numbers anyway, due to falling numbers of kids and the cost of living crisis, not to mention the desire of parents to give their kids housing deposits instead of private education, and the fact that a lot of middle class parents started or increased their use of private tutoring during the COVID school closures and, having seen the results of tutoring, some will decide that supplementing a state school education with private tutoring is a more affordable alternative to private schools.

This will almost certainly result in some smaller, less-famous private schools closing, especially some prep schools (except in 11-plus areas).

When this happens, it will be blamed on Labour and its policies, but most of it will have happened anyway. Trying to work out what % of the increase in state school pupils is actually due to Labour policies will be quite tricky.

The impact won't be large but it will bring in extra money. The policy will be popular with the majority of voters who will never be able to afford private school.

We will always end up with a system where the rich can pay for a better education. If it’s not via private school fees, it’s via housing.

This is already a thing though particularly as many have been priced out of private but house prices are so prohibitive that younger people are moving out of expensive places &/or not having dc.

Also haven't some private schools opted out of TPS as it's too expensive, the smaller ones are certainly going to struggle.

You said "20 percent VAT would be applied to fees but schools will also be able for the first time to recover VAT on certain costs, lowering their expenses"

It is the latter part of that assertion which is conflating the two issues.

This.

And this!

This.

We can't deny people buy their way into catchments.

However where I live all the new housing means that people private renting, buying or in SH are moving into these areas and can be closer to the catchment than already existing housing.

You can't buy your way into occupied housing.

I think we would have better social mobility and state education if it remained consistently well funded and of a high standard rather than changing every decade or so dependent on the idealogies of the sitting government.

Maybe the answer is a system where the nhs and education and social care are protected whatever government sits?

I’ve yet to see any detailed proposals. A lot of people seem to think it’s as easy as just removing charitable status overnight. It isn’t. A lot of independent schools don’t have charitable status even now. To add VAT onto fees would involve having to re-write VAT legislation. I’m not sure this is as easy as people think.

Independent schools, if VAT registered, could reclaim input VAT. They could reclaim VAT on capital expenditure going back several years. The schools with the highest capital expenditure tend to be those seen as the more “elite”, and those with higher fees. so they would be able to reclaim more VAT than smaller schools.

For those who claim that independent pupils moving to the state system would drive up standards, I’m extremely doubtful of this. What will happen is that you’ll end up with individual state schools filled with pupils whose parents can afford high house prices in good catchments and tutors to pass selective entrance tests. It will push out those from more disadvantaged backgrounds who are currently at those schools.

For those saying the state system will “have” to accommodate extra pupils, how? Are the Labour Party going to magic up extra space in state schools? There’s not enough space in many state schools already. Even if the full 7% of children educated privately moved to the state sector (it wouldn’t be that many) how is that going to be enough to drag standards up?

What will happen is that the surviving private schools will become even more exclusive, with only those with deep pockets able to weather the fee increase.

The Labour Party won’t be happy with just adding VAT onto fees. The Labour Party has proposed banning private schools entirely in the past. Proponents of this include the current Deputy Leader and Shadow Chancellor. They haven’t just changed their minds overnight. They’ve merely put Keir Starmer in his position to give the illusion of being a more Centre party. In reality, the hard left are still in the Labour Party with exactly the same views they had during Corbyn’s time.

Would people be happy for private healthcare to have VAT added or, indeed, banned? After all, we have a state alternative for healthcare and perhaps banning private healthcare would force standards in the NHS up (using the same argument about private school pupils driving up standards in the state system).

The Labour Party would be better focusing their efforts on improving the state system rather than using all their energy stamping their feet and shouting “it’s not fair” about the private system. Any perceived tax receipts gained by adding VAT onto fees are a tiny percentage of the state education budget; certainly not enough to have any meaningful effect on state school standards.

She is just referring to the rules on deducting input VAT. That is nothing to do with charitable status, it applies to any organisation that applies output VAT (see my link above).

Exactly. The air passenger duty on flights in many cases is far less than a 20% VAT charge would be. I bet a lot of people saying that VAT should be added on school fees would be the first to complain when the price of their holidays increased if VAT was added to air fares.

Some food is VATable.

Ah used to love teaching law students about ‘the Jaffa cake’ case, is it a biscuit in which case it does attract VAT or cake, which bizarrely is VAT free.

We’ve used private schools for our DC’s secondary but state for primary.

While at the primary school my involvement and children’s presence did not drive up standards. I wanted a quicker pace and more academic demands on the DC. A lot of other parents disagreed. In the end, we went our own way where we could find an option that was in tune with our family’s attitude to education. We were lucky to be able to do do and to afford it.

I wonder what it will be like with a bunch of pushy parents in state schools with very different attitudes pressing for a divergent agenda.

Unfortunately I just don't see any legislation that will be nuanced enough to just hit fee-paying schools.

As usual the details will be hazy and there will be unintended consequences like VAT added to all educational settings or services (university fees; preschools; tutoring; sports and swimming classes). I just don't see any government, labour or Tory, who can produce sensible policies that 'hit' the intended target. Ever. They all produce badly thought through decisions (can you tell I'm getting old, grumpy and disillusioned?).

Also I agree that the tax intake will most likely be offset by private schools reclaiming VAT so actual benefit to the county's purse will be negligible. But it's a crowd pleaser for an election.

Voters aren't as stupid as you think. They didn't believe all Corbyn's promises (gimmicks).