20% vat on fees

[namechangedforthisone35]

IF Labour get in and IF the 20% does get added to fees, how many private school pupils will be moved to state? I have three kids (one not school aged yet) and in private school. One of many reasons because I didn't want them in a class of 30. I couldn't afford the vat increase so would have to move them but then that class of 30 becomes, what, 40?! In an already strained and unresourced system?!

Wwyd?

Y - I'd have to move kids to state
N - I'll pay the vat

Bit like university then, or tutoring or swimming lessons.

It's thin end of the wedge... don't be surprised when other forms of education suddenly get more expensive and potentially unaffordable for the least well off.

“Or do you think you are perhaps a tiny bit of a crapweasel?”

Personally @SheilaFentiman - I love a bit of Friends/popular culture and establishing that we must be of the same generation and that therefore, you may be able to explain to me why we should vote for Labour if Keir cannot control the rabid dogs in his own party? Because we know that is dangerous. From our recent past. We know they bite. How is he any better than Rwanda Rishi?

What it really means is that poorer children have less chance of going to a highly rated schools, as families like ours take up the grammar places (the grammar exam is a test of how much you paid for tutors, not of intelligence)

Remind me again, why do we have grammars in some areas when they are proven to exacerbate socio-economic inequalities?

I think you have answered your own question.

Let’s not pretend there is agreement on grammar schools in the Labour Party.
https://en.wikipedia.org/wiki/Grammar_schools_debate

Nice and simple explanation for all here…

“LabourIn general, the left-wing such as the Labour Party oppose selective education,[27] whereas the right-wing such as the Conservative Party have traditionally supported it.[28] In March 2000, following the failure of the policy to close grammar schools down by balloting, the then Education Secretary David Blunkett sought to close down the debate by saying "I'm desperately trying to avoid the whole debate in education concentrating on the issue of selection when it should be concentrating on the raising of standards. Arguments about selection are a past agenda."[29] However, in his autobiography A Journey, former Labour Prime Minister Tony Blair asserted that the way grammar schools were abandoned in favour of comprehensive schools was tantamount to "academic vandalism".[30]

Wikipedia further informs that there are still 164 grammar schools educating 5 %. So not as insignificant as you would like us to believe.

And thank you to David Blunkett for pointing out the obvious “should be concentrating on the raising of standards”.

“Privilege” is not one small pot politicians get to divide as they see fit across society. People are born with privilege. Those born without need Education to elevate them. The former already have wealth, educational privilege, connections etc anyway.

Vote how you like, Araminta. You can’t seem to make up your mind whether you are voting Tory for the first time, are going to stick with labour despite your qualms etc.

You know where the internet is if you want to read the manifestos once published.

“You can’t seem to make up your mind whether you are voting Tory for the first time, are going to stick with labour despite your qualms etc.”

No, that was another poster. I would never vote Tory.

I think I am more Lib Dem these days. I agree with most of what Munira says
https://schoolsweek.co.uk/munira-wilson-lib-dem-education-spokesperson/

I don’t really care if they are not going to win. They might win in the future. Most of my friends are now Lib Dem camp too now. And no, not ex Tory either.

UK universities already have to charge VAT on university fees relating to their Dubai campuses - granted, it's only at the Dubai VAT rate of 5%, but the point is that there is precedent for charging VAT on higher education.

VAT on school fees is just the start. I can’t see the Labour Party stopping at that when they work out how much they could raise by adding it onto university fees or private health care for example.

Private health care is the obvious one - after all, the basic product is provided for free, and so many people have it as part of a work package so it will be easier to hide the increase.

I'd be shocked if they don't

Exactly. According to Statista, “private household out-of-pocket and voluntary health insurance spending amounted to 46.4 billion British pounds in 2022”. Adding 20% VAT to that would raise over £9bn - a huge amount more than VAT on school fees will raise. It would affect those who pay the insurance or fees themselves, as well as those who get a healthcare insurance benefit through their employment (the taxable benefit in kind figure will be higher).

It would probably be a lot easier to implement than VAT on education as well.

It is illegal in the EU. If Labour are so keen to remain aligned with Europe and potentially rejoin the EU how will they justify it?

Taxing private providers when you have state monopolies is not a good look from a competition law perspective. I wonder whether some of the private schools are going to try to find a competition law angle. Private healthcare provider chains probably would, or at least, look into it.

An excellent and persuasive argument. Shall we all write to Sir Keir and suggest it?

The same tax rate applies to the fees paid by parents to state schools, so I fail to see what your point is.

@jgw1 - are you being deliberately obtuse or you genuinely just don’t understand the competition law aspects of the NHS and how it interacts with the private sector and how the NHS is meant to be competitive itself?
Can you genuinely not see how the state education sector should also be competitive? The question is if Government impose punitive taxes on private schools is that anti competitive? At what rate and how would it be anti competitive? As there is no precedent worldwide for a 20 per cent value added tax on education I wonder what the OECD’s view would be.

And whilst we are at it, can someone explain the difference to me between the way state academies are typically set up vs private schools? Sure they have their own funding agreements with the State, but their legal nature is similar? I can envisage this causing issues? Is the actual drafting of VAT legislation really going to be straight forward?

I think the funding is a grant rather than a charge for a service and would be outside the scope of VAT. But i dont know. I think the legislation would be a nightmare to write to not have loads of unintended consequences.

I am well aware of the competition you describe in the NHS. I would like to share with you one example of how it works in practice.

Birmingham Children's hospital in opened a new hybrid cardiac operating theatre in I think it was 2011, may have been early 2012. One of the first of its kind in the world. What that meant in practice was that patients, all of whom are extremely unwell, could undergo key hole and open heart surgery in the same operation, whereas previously the key hole part would have been done first, followed by the patient being heavily sedated on ICU for several days until the open heart operation could be carried out.

The way that the NHS is funded means that with the hybrid theatre the senior cardiologist and his team who carry out the key hole part of the surgery do not get paid for the work, only the surgeon and their team do. So on a hybrid operation the hospital is making a loss. They could instead choose for the patient to have two anastetics and a significantly longer stay in hospital, but be made more for worse outcomes for the patient. Worth noting in passing that each of these kind of operations comes with significant risk, we are talking about a 1/20 chance of death or life changing complications each time. Why would you design a system that gives a very ill child a 1/10 chance instead of a 1 in 20 chance?

That is the way the NHS is funded.

It is bonkers.

@jgw - I agree that is “bonkers” and very emotive. Ill children always are. And it is wrong morally.

However, to get back to the legal and practical aspects of VAT on private schools. I want to know exactly how it will be implemented, how much Parliament time it will cost or not, how many laws it may infringe etc etc all to fulfil some die hard lefties wet dream.
How much is it going to detract from actual real life politics and sorting out the real problems on the ground? Because our politicians have form for that. Years of wasted time and money on Brexit and Rwanda, in breach of international law and at huge costs, not just tax payer money, valuable political time? When they should be actually sorting out proper problems we do have. International credibility. However, I am sure the media has made a ton of cash out of the whole fiasco.

So when are we going to get back to proper politics? Have they had clear legal and tax advice considering every aspect before they put this proposal in the final Manifesto? I really need to know that. We have been saying for months and years that removing charitable status is not workable in practice. So I want to know that there is clear advice that this is simple VAT Notice change easily implemented etc. I want to understand the practical aspects and costs as well. The emotive stuff of SEN children in the private sector, people losing their jobs etc, evil private schools is a whole other matter.

Or will this be the usual nonsense - bang it in the Manifesto, press rile up the public to care about the top 5 evil % and then blame the lawyers, judiciary, legal system that it is not workable? All those private school judges - yeah!!! When will people actually start to understand that law & process underpins everything. The muppets are the politicians lying to us constantly. When will this stop? It is a joke.

@jgw - and if the leader of the Labour Party is a lawyer and has many years of experience, surely you need to make sure that it stacks up? Otherwise you are massively undermining your leadership.

I agree that is “bonkers” and very emotive. Ill children always are. And it is wrong morally.

So lets remove artifical competition from the NHS, which serves no useful purpose, and then lets also do the same in education. An excellent plan.

I think Labour haven't thought this all the way through or even halfway through. This will face a legal challenge. And he's only putting up a barrier to reentry into the EU.

I think the thing that saddens me the most is that after years of the Tories pillaging this country I was truly looking toward Labour to turn things around. We need proper policies that will lift the standards of the whole country not petty pet policies. It's very disheartening to have this as an example of their best thinking. It makes me think they will squander their chance to make meaningful impact. They are going to be handed a country in dire straights. They need to focus on the big issues and show some bloody leadership and vision not get tangled up in their own bile.

This is a tiny issue that will affect a tiny minority of people and which is being blown wholly out of proportion on this thread, primarily by libertarians who aren’t affected.

It will raise some cash that state education badly needs. It’s not Labour’s only policy - though some people appear to think it is.