I doubt there would be a mass exodus overnight; however, schools which are struggling will fold and so in some areas you will be likely see suddenly a large number of children needing to be accommodated at once (there was a thread recently where this happened and it was in an area with no other schools).
Some parents will struggle to keep their children in a school, or at least get to a good exit point (say end of GCSEs), but if a school closes then they are likely to move into the state sector.
I imagine a lot of private schools (especially with charitable status removed) may in the short term partner with equity firms and produce a product to get round this (so you will be able to borrow x years fees and pay them in a lump sum, avoid VAT, and then you pay back at say 6/7% interest over a longer period). Private schools could then possibly invest this sum to raise ongoing capital to then keep fees at a certain level, or invest in some big capital products sooner and offset against VAT and again to minimise the impact for several years.
My husband is from South East Asia and all his family would literally do anything to get their children into private school (work every hour, live in tiny flats in "rough areas") they can not understand this hatred of them. I guarantee even if they put VAT on fees all of them will keep their children in (take another job, lodgers etc).
It will create some problems over the following 5 years:
- People who weren't sure will choose a state school place (as others have said using that money to buy next to good schools and forcing other children out)
- People will delay entry (so rather then 4+ will go in at 7+, or not do juniors and save for secondary.
- House prices will go up round "good" primary schools, state secondaries and grammar schools (pricing out poorer students)
- See below, I anticipate you will see an increase in middle class parents pushing for EHCPs to try and get places private school places funded. I don't criticise this, but again it will be these parents who can fund reports and lawyers and can therefore push through.
Ultimately, middle class parents will be fine and the policy won't improve things for poorer students. It will create a lot of chatter, but (a) won't raise significant funds and (b) won't probably reduce private school numbers. I remember when labour abolished assisted places and Tories were saying it would lead to huge numbers of kids in state schools, because schools would not be able to cope and Labour said it would raise all this money which they would invest in state schools.
Labour funded the infant school cap not because of this money (they allowed kids to finish their education so they didn't suddenly get £100 million over night), but because the economy was in a good position and they could spend the money. Private school numbers remained actually similar.
The big public schools will be fine: (a) because they have extremely wealthy families, but also (b) they will be able to offset huge amounts of VAT on capital projects and so reduce fees (the indications are the impact will only be 10% on public schools versus nearer 15% for most day schools). You may see some days school folding - so the gap will just increase in terms of inequality in education.
This would be different because it would be a hit at one go, but as I say there are ways round the increase in the short term.
It's a voter winner because a lot, particularly of "middle class" voters (the floating voters Labour needs to win over) in this country hate private schools (my experience the most hatred tends to be people who could probably afford if they lived in a smaller house/SAMH went back to work). Interestingly there is not a clamour for VAT to be put on private tutoring, extra-curricular activities (which is generally what a lot of people advise when it comes to private school, "buy in a nice area, spend the money on tutors and extra-curricular activities which you would have got in the private school".
I only hope there is some provision for children who are neurodiverse/disabled whose parents have chosen to educate them in the private sector (often to ensure smaller classes sizes and smaller environments) will be able to get a VAT exemption (in the same way you can when you are buying other products for a disabled child). Children who are below threshold for EHCP but are only able to cope in education because they are in small supportive schools (which just aren't available in the state sector - or at huge cost via EHCPs), often these parents are struggling to pay fees. Given they are already "saving" the government money by paying for a private school place, it seems wrong that they then get hit with VAT. Labour are saying they will improve SEN provision; however, that won't happen overnight.