Will VAT on private school fees lead to a partial collapse of the sector?

[mids2019]

Will VAT on school fees coupled with cost of living drive a lot of parents from the private sector or will the majority absorb the cost? Are the numbers that potentially end up in the public sector going to offset any gains to the treasury through VAT?

Labour are working at about 4-5% transfer rate to the public sector but is this an underestimate?

It’s a tricky one isn’t it - neither individual private schools nor councils have a particularly good incentive to publish kids moving for fear of creating panic. I can only hope that ‘behind the scenes’ the message on impact is getting through to labour.

ENT are working hard to push the message through but need everyone to help. The Leadership are still refusing to engage although many individual MPs are in support with the campaign to prevent VAT.

The other big issue not being faced by Labour is where a larger proportion might be seeking state education and whether this is in areas where schools are likely to have spaces, or not.

Labour wants lot more house building. We don’t yet know where. This radically alters school population . In my nearest town a new secondary is filling up from y7 onwards. There’s a new primary on the same site. It could well be schools in the area all remain partially full. We don’t have independent secondaries where dc will come out and populate the schools.

Promary might be different but there could be surplus school places. However preferences kick in. Parents need to live where they want a school for YR. The popular ones will fill up. The dc not high enough in the admissions policy will be displaced. To the least popular schools. It really won’t be school spaces equals DC coming out of independent schools. There will be pinch points. It could be Labour voters feel are the ones who don’t get their preferred school.

If someone was to say to Starmer - since you are putting VAT on education does that mean you are ruling out ever rejoining the Single Market because you are going to create a huge mess only have to revoke it if and when we do rejoin. That's bad policy-making.

My DS is in a SEN specialist secondary school which has worked miracles for him. Despite falling behind severely in his previous school because of his specific learning difficulty, he was refused an EHCP. About 70% of the 600 pupils in his school have one and have their school fees paid by the local council.
This is true for most private SEN schools.

It is becoming ever-increasingly difficult to access an EHCP because of the shortage in SEN funding, so many parents who started off paying fees have spent an extra 20k plus for solicitors, ed psychs and other specialists to fight their councils into providing their child with an EHCP.
The better off who had that money available up front to put at risk, over and above the school fees could do this. Many succeed and are now having their fees (over £20k per year) paid for by the council. This is one of the cheaper SEN schools - many charge over £35k p.a.

We really struggled with paying fees and didn't have that extra available - if we'd won, we could have saved over £100k over 5 years, but if we'd lost, we would have been unable to pay the following year's fees - so didn't risk it and still fork out term by term.

We are not the only ones in this position - many families feel they have little choice but to move their child with SEN into private because of the abysmal lack of support in state schools.

I am aware of a recent increase in the number if families applying for EHCPs because of the threat of vat on fees for those without.

Those that win will have their private school fees paid for by the council.
DS is in the sixth form now, so no point in trying to get one at this point, but had a vat imposition happened earlier, we may have thought it worth a try.
I've been wondering what proportion of the £1.6 bn made through vat will have to be spent on extra private school fees for parents who as a result of possible fee increases, think it worth paying for legal help.
Also, every extra EHCP given out to parents with the means to pay for solicitors means one less for a poorer kid in a state school.

A very unfair SEN system that favours only those with means is about to get worse.

we won’t be applying to join the single market in the next Parliament or the one after. And they might not have us anyway.

Time enough to worry about taking VAT off (and making the thousands of other changes we would need to make) if that actually happens

I very much doubt this, given the high numbers of pupils with EHCPs at these type of schools. They'll effectively be taxing themselves for the Local Authority-funded pupils. Poorly thought through.

With respect, that’s not what a lot of people want to hear. The millions and millions of people that want Brexit to start to be reversed and the country to start growing again are not going to be interested in excuses about how complicated it might or might not be. Adding VAT to education is just one more PITA policy that they will need to change so why do it? It puts him on the horns of a dilemma. Do I confirm Labour is a Brexit forever party or do I piss off the class warriors by dropping it?

With respect, that’s not what a lot of people want to hear.

I would like nothing better than to rejoin the SM/EU. But it isn’t happening this decade, or probably next. I don’t care whether people want to hear that or not. It would be foolish to plan policy with an eye to rejoining the EU in the short to medium term, just as it would be foolish to base trade policy on everyone being nice, or something

Do I confirm Labour is a Brexit forever party or do I piss off the class warriors by dropping it?

We have exited. There is no longer any brexit.

A party would have to campaign on a rejoin/SM manifesto, win a resounding endorsement for this and then attempt to open talks with the EU, who have had enough of our nonsense and would need to be strongly persuaded to even try and find a way through. Said party would also need a mandate to join the euro in due course, and Labour hasn’t supported that for a very long time.

VAT on one particular service that can be removed if required is an insignificant barrier compared to the above.

We can all make predictions. I'm not making predictions. If I was, it would be that if Labour are, like the Conservatives, the government of zero growth forever, they will lose power after one term. They won't have a choice but to rejoin the single market and customs union to get investment or they will lose power. They will be replaced by authoritarians on the left or right. But I'm not making predictions. I am talking about politics. There are and will be a bigger and bigger majority of people that want to get back the freedoms we had before Brexit and those people need to be told that this policy and Starmer are a barrier to that - that's all really.

They tried adding VAT onto private schools in Greece but it was a complete disaster. What is Starmers response to this?
https://www.schoolmanagementplus.com/admissions-marketing/what-the-greeks-can-teach-us-about-vat-on-fees/

Lib Dem’s have pledged to rejoin the Single Market.

Labour have made this a campaign about staff shortages in the NHS and teaching.
Rejoining the Single Market and Freedom of Movement would lead to both growth and less staff shortages. It is an absolute no brainer.

Labour are just too chicken to do it because whilst the Tories called the Brexit Referendum, it is actually lots of traditional Labour voters who voted for Brexit.

There’s a long history of Euroscepticism in Labour. Brexit and a tax on education would fit very well into the 1979 Labour manifesto.

They won't have a choice but to rejoin the single market and customs union to get investment or they will lose power.

There are and will be a bigger and bigger majority of people that want to get back the freedoms we had before Brexit

Nor am I making predictions; I'm explaining that the EU wouldn't want us back without a lot of persuasion and that is a much bigger barrier than a VAT policy. Whether Labour, Tory or Count Binface's team are the ones in power. Your rhetoric, like many in the debate, is that it is just up to Britain to say it wants to rejoin. It is not.

I'm explaining that the EU wouldn't want us back without a lot of persuasion and that is a much bigger barrier than a VAT policy

@SheilaFentiman that’s true, but if Labour win the forthcoming election, then maybe the increase in support for the right - as demonstrated by recent EU election - means that the European Commission might be more welcoming to a socialist led country to give some balance?

I think we are talking about the VAT policy here. It’s a step backwards. It’s a Lexit populist one in the eye for your class enemies policy which is self harming in the long run. I don’t know what other EU members would do in a future negotiation. For getting this policy stopped, that not so important right now.

I mean... you were the one who started the 'this will stop Brejoin' discourse.

But we are well off track, so I will leave it there.

Pure practicality - it's not in this manifesto so there's no way it will happen in this Parliament. Depending how the next 4-5 years go, is it possible for a future manifesto to include a referendum on rejoining? Maybe.

But EU will, first a foremost, want to know that Britain is settled on coming back and staying in. One Labour win won't outweigh that.

Yes, and it retains its relevance. Labour has been very deceptive in its Brexit position. It can’t keep that up. This policy outs them as Lexiteers and people can make their judgements if they want that.

I suspect the EU would take one look at the UK and say no thanks.

The polls aren't exactly showing that Labour is popular - they're just not the others. Reform is also not in the low single figures.

My guess is that Labour is going to be one hell of a disappointment to those who think they'll be able to do things, and may well be a one term wonder. An extra three million workers will be dragged into the 40% rate of income tax over the next five years thanks to fiscal drag, and looks like there will be increases in council tax. Add that to zero money to splash about and they're not going to find it easy to impress.

it seems to me that the partial collapse referred to in the thread title has already started.

https://www.telegraph.co.uk/politics/2024/06/01/labour-tax-raid-forces-another-private-school-to-close/

https://www.schoolmanagementplus.com/bursars-finance/new-wave-of-independent-school-closures/

https://ursulineprep.org/admissions/

If anyone does care about the vat issue, read more about it and sign here :

https://www.change.org/p/stop-labour-from-adding-20-vat-to-private-school-fees-and-forcing-kids-to-change-schools/u/32672954?cs_tk=An7Iy1Sp4okMBb7UcWYAAXicyyvNyQEABF8BvE7huEk9vVrX8Yg0wNRkMX8%3D&utm_campaign=d2ae502bce934219954a5d593e74cfe7&utm_content=initial_v0_7_1&utm_medium=email&utm_source=petition_update&utm_term=cs

essentially there is no way that kier starmer can get the money he has proposed through this. I have seen several comments online, even on here where people who don’t send their kids to a private school but “know people who do” have said it’s fine because no one scrimps and saves and goes without holidays and school plenty are plenty because of falling birth rates!!! Some of the most obvious childless labour plants talking nonsense. The Isc report (the only one that matters because it is polling real private school parents who will be the decision makers) shows many will leave and it is likely that military families and children on EHCPs will not have to pay the charge - which is absolutely the right thing imo. When you work out how much money he will get once pupils drop off and include the exempt ones, he won’t make very much at all.

The other thing is it will not stop a two tier educational system. As people have said here the really wealthy will continue to send their children to the big schools and many of those large schools will swallow the fee anyway. The other statistic that was interesting is the amount of people who send their children to a really big school which has international campus's because you can still educate your child at one of those and pay no VAT to the UK. A win win!

Just so you know, you have wholly misrepresented what she said (in 2015, btw).

https://www.logicallyfacts.com/en/fact-check/misleading-no-this-labour-mp-is-not-endorsing-mass-migration-ahead-of-the-u-k-general-election