If labour win the election can they introduce VAT immediately?

[londonparent321]

(For school fees) Or do they need to go through the courts which could take years /never happen?

Ha at compliment, as you wish, any attempt to insult just shows a reaction ;

No, I’m not seeing any vindictiveness at all from those against the policy just realism about behaviour change.

After all a fair few were pointing out grammar would become more competitive. Some, maybe you included, scoffed in the same way

And it has. So I don’t think we’re off really after all

@Newbutoldfather i didn’t read the post about giving less to charity as vindictive or emotional. In the cold light of day, most parents will prioritise the needs of their own children. I think it is completely reasonable to prioritise the educational continuity of your child over discretionary charitable giving - we will certainly be doing so because my obligation to my child comes first.

introducing such a substantial tax will have inevitably have consequences on people's behaviour, and some of those behaviour changes will have consequences for society more broadly. For some it will mean a change in plans for schooling that have downstream implications for both competition in ‘better’ state schools as well as reduced incentive to work, for others who choose to stick it out in private it will mean less money to spend in ways that might benefit others (charitable giving or economic activity). Depending on how the law is written there is the potential for significant impact on SEN resourcing that might reduce the tax take estimate but also might increase pressure on Local SEN provision and assessment access. What is the net impact of those changes? I don’t think anyone knows because it hasn’t really been looked at.

I have issue with this proposed policy because so little energy has been spent trying to understand the potential impact, and Labour don’t seem particularly interested in doing so, stating they will put this into place immediately. The IFS study is fine in that it presents a starting point for further research, analysis and discussion, but it is insufficient on its own to drive policy decisions.

DS went to independent for primary - I know 4 boys in his year alone (and there were only 42 in the whole year) who were offered a place at the boys grammar and ultimately went to a private instead. Multiply that across the number of private preps in the city and you're potentially looking at 20 places possibly more as DS was at the smallest independent (I've left one prep out as it's girls only) The grammar is one of the best in the country and has 120 places per year.

There's no question in my mind at least that if professional, well off parents can't quite stretch to the private fees then competition for grammar entry and houses in the best catchments for other schools will heavily intensify.

I don't think it will mean that state schools in general will improve as a result of parental involvement / investment but I think it likely that a certain enclave will benefit and the gap between state schools will intensify.

if you expect me to pay a extra 3k a year, I will spend £150k on a new property instead

If you have three children then the payment on an interest only mortgage of £150k would be less than the vat on school fees.

Very true!

In terms of work participation, a bigger mortgage requires a higher salary which should result in people working more (and hence higher income tax take) but it may just shift work participation in time:
-As you point out, the interest on the bigger mortgage is much less than private fees, and doesn't require significantly increased income (once you've got the mortgage agreed)
-Repayment does necessitate a higher salary during those years, but owners will downsize at some point with the bigger asset possibly supporting earlier retirement. Working more days over fewer years results in more tax than part-time over more years though.

In terms of change in behaviour leading to higher house prices, I'd expect that to gradually build up over the next 10-20 years: although the timescale might vary regionally since in areas with less expensive houses (much lower stamp duty) it might be worth doing even partway through your kids' school life, and the change will come about more suddenly.

In the SE, changing house is crazy expensive! Most people buy their 'family home' just once. Often just before having kids, but may be right up to the end of primary. They will usually be planning for both primary and secondary: thinking about their options and looking at school catchments.

So if fewer parents plan for private, I'd expect house prices close to favoured state schools to gradually ramp up over the next 5-10 years time for primaries and 10-20 years for secondaries.

Interesting point @SaffronSpice about increased house prices in the catchment of favoured schools resulting in more tax take for stamp duty! In the SE that will typically be 10% (£1-1.5m band, bearing in mind house prices are steadily increasing so more and more will hit the higher bands) of however much the house prices increase for school preference, so maybe £20k per household. That will of course apply to everyone who buys in that area. £20k extra stamp duty is getting a bit close to Labour introducing fees for better state schools! Obviously the exact opposite of what they intend with this policy.

The behaviour impact is certainly pretty complex, and will take effect at different rates over the next 10 years and even longer (ie the work participation impact in 20 years time due to house price inflation). The Labour party really should actually do some analysis on this before bringing it in!!

Obviously only a one-off £20k extra tax per household (at most twice), so much lower than actual school fees. But still a barrier to lower income families accessing the most popular state schools.

I know that people buying access to better state schools through buying houses in expensive catchments has been brought up before, and that this will get worse if people are displaced from private to state.

Maybe silly question but if labour get in is there any chance of the above not coming into power ?!

I think there is a degree of fantasy going on here.

The truly wealthy, who really push house prices, won’t even notice the VAT.

I wonder how many will leave private due to the non dom changes (leaving the uk), although the transitional arrangements are pretty generous.

Of course, anecdotally, a few may plan ahead and buy close to a ‘good’ state, although obviously the grammars are selective, and not by catchment area, anyway.

My bet is that the IFS estimate of 3-7% leaving due to the fee change is pretty fair. But a lot forget that fees have pushed up more than inflation every single year (bar 2023, when average was a little below) since I was at my £700/term public school in the early 80s.

Every year the demographic in private schools has been changing with more foreigners and truly wealthy, and fewer children of ‘ordinary’ professionals (GPs, normal solicitors, academics etc).

The thing is that, during this period the wealth distribution has totally changed, with the gap between the wealthy and everyone else growing, which is how private schools are more subscribed than ever.

Yes, this will be bad for small private schools out of London and the South East, but will just accelerate the consolidation that is already happening. Schools under 500 are increasingly unviable, even before this.

There’s no need to imagine what house prices do around good state schools

I take it some posters are not in the areas that already have this effect

If they were they could easily see how motivated parents are around the income of just about affording private and now not

@Newbutoldfather - economic change is about what happens at the margins.

The consequence of 20% tax on the majority who don't change their behaviour is fairly easy to predict.

But assuming 3-7% leave private due to affordability - and perhaps the same number decide not to start - that's where the change happens. If in 10 years time we have 10% of kids who would have been educated privately are now educated in state, what does that change? That's the question.

@mrssunshinexxx - nobody really knows exactly what the impact will be. We can look at what people are already doing and try to extrapolate that, but even with all the relevant numbers it would be hard to predict. But it is clear that the Labour party haven't even tried - and they really should, since it will affect everyone, not only private school kids.

Just listening to EDSK report on potential VAT ramifications Times radio

Private nurseries, SEN and capital rebate going back ten years all raised

There’s a report today

@strawberrybubblegum ,

‘latest census (2022) shows that 544,316[1] pupils now attend ISC schools, up more than eight per cent in the last decade and a record high number. This is despite notable fee increases over time. Pupils at independent schools consistently represent about six per cent of all pupils, although this figure doubles to about 12 per cent for sixth formers.’

So, this is from Civitas. Therefore, if even 7% leave, this affects about 0.4% of all children in education. So I don’t think it changes too much!

The real problem is the lack of funding in the state sector. The 7% who move could well make a contribution to the schools they end up at, both academically and financially, should the parents even donate a fraction of their current school fees to the state school.

All schools fundraise, even the most exclusive private. At the school I taught at for a few years, one meal raised £1mio+ towards a new building. At the state primary where I was a governor, the total parental contribution was lucky to get to £20k.

I am not someone who believes that private schools shouldn’t exist and I think they play a valuable role. However, they need to take seriously their responsibility to the community around them, not just suck up the best teachers in scarcity subjects and try to protect their own privileged pupils. They need to take bursaries seriously (currently only 1%of private school pupils are on a full bursary, with a further 2% being given 75-90% reductions).

In addition, they should offer extension A level classes to talented state school students (this is win win, as it really stimulates the private school students. When I did this, I think it was a real wake up call to my students as to what an Oxbridge student looked like). And finally they need to open up sports fields and pools to the wider community when not in use.

Some schools (Westminster for example) are doing all of the above. I do think that if private schools stopped ducking their community responsibilities, they would have a strong case to lobby for the VAT to be taken off.

The 7% who move could well make a contribution to the schools they end up at, both academically and financially

They already are, through their taxes.

Some schools (Westminster for example) are doing all of the above. I do think that if private schools stopped ducking their community responsibilities, they would have a strong case to lobby for the VAT to be taken off.

newbutoldfather I disagree. Keir Starmer has to appease the far left in the party by punishing toffs and the two popular ways are hunting and private education. He promised to remove charitable status and then realised this was too difficult (surely he should’ve checked this before making the promise) so VAT on fees is an alternative which those on the left would not give up.

However, they need to take seriously their responsibility to the community around them, not just suck up the best teachers in scarcity subjects and try to protect their own privileged pupils.

Newbutold, when you were teaching in a private school did you make your views clear to the school authorities and pupils? If so, what were their views?

@Newbutoldfather - where is the evidence that bursaries and outreach go to those who actually really need it? Rather than pushy parents whose kids would have been fine anyway. I would exclude all professionals (lawyers, doctors, engineers) and teachers automatically from bursaries for a start. All of it should go to parents with low educational levels themselves - it should be about children who are naturally bright whose parents cannot fill the gaps. This is not happening in reality and it is not always the school’s fault. Same with Oxbridge admissions.

Personally, I think private schools with funds and knowledge like Westminster and Eton should not be focussing on a select few bursaries but should be going as wide as possible with resource sharing and teaching etc to as many as possible. Why spend 30-50k a year on one educationally privileged (parent driven in my opinion) but cash poor child when that cash would benefit far more bright FSM children, especially in the regions.

@Barbadossunset ,

Yes, and the head basically agreed.

But it is like turning the titanic.

Heads rarely understand budgets at a deep level, and I think they were put off some of the more radical stuff by the bursar.

To be honest, I think the toughest fight is persuading parents who are already paying a lot of fees that some of this should go towards helping others who are not paying. I have known some fabulous parents, though, who have done an immense amount to help the community and funded full bursaries, but you have to be both genuinely rich and philanthropic to do that!

It is often the bursary students who get into the top universities, although not always.

Newbutold thank you for answering my question.

@Araminta1003 ,

Westminster invite the Harris academy kids to study the Oxbridge extension classes with them. They also offer A levels like Art History completely for free to the same pupils.

They intend to go entirely needs-blind by 2040 (I think). Of course they are lucky with their funding in many ways, but they are taking their responsibility to the community seriously and doing some admirable work.

Araminta1003 · Today 09:41
Personally, I think private schools with funds and knowledge like Westminster and Eton should not be focussing on a select few bursaries but should be going as wide as possible with resource sharing and teaching etc to as many as possible.

That sounds a good scheme but given the scorn and sneering that private schools, especially Eton, attracts on here, maybe plenty of parents would object to their dc having anything to do with it.

Most private schools do not have the resources of the elite London schools. These elite schools might not blink at VAT increases. The schools impacted are the small provincial private schools. The ones whose resources and results do not meet those of the top state schools in London. Whose reserves are tiny and fees are set to just about cover costs. Whose parents cut their cloth, often quite significantly, to meet the fees.

@Newbutoldfather - Harris Westminster already has outstanding results and is highly selective at Sixth Form? Why is it better concentration your resources in this already privileged demographic in London rather than providing lots of Zoom teaching lessons to the North and North East regions and gifted and talented pupils identified there who do not benefit from the London education factor?

I personally know a lot of parents who got bursaries or into selective London state schools, none of their children need the help. It is parent driven primarily. The focus has to be on helping children succeed despite their parents. Pushy educationally motivated parents even if they are not rich - those DCs tend to be fine, especially in London where the state schools generally are really quite good.

@SaffronSpice ,

You do know that, for the average state school secondary pupil, a state school receives just over £5,000.

Even the cheapest private is £5,000 per term or so, so three times as much (it is a little more complicated as states don’t need to buy buildings-but they do need to maintain them). But still,at least twice as much per pupil.

If they are struggling on this, they need to make some changes.