Page 30 | Will VAT on private school fees lead to a partial collapse of the sector?

mids2019 · 2024-05-11T16:37:43+00:00

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?

EasternStandard · 06/07/2024 09:15

potionsmaster · 06/07/2024 09:12

In the end, this is a risky policy whose effects are simply too unclear. It will drop a bomb in the education sector and nobody really knows how big that bomb will be. It might be a tiny little firecracker that nobody notices much. It might be a great big bomb (at least in certain pockets of the UK).

But why do this now, when it's pretty obvious that it's not going to raise much revenue, and it's going to soak up a load of government attention, just at a time when the new government has a million other things to worry about?

Tony Blair understood the way to approach this. You completely ignore the private sector, and you accept that what you have to do is use general taxation (increased if necessary) in order to improve state education. You allow private school parents to carry on choosing to spend their money on saving you the cost of educating their children. You recognise and probably regret that this means that richer children are getting a better education - but you also recognise that if you want wealth creation (which Starmer says he does), then you have to allow the people who facilitate this wealth creation to spend their wealth on making their own lives better - otherwise they'll go elsewhere. So you let them carry on, while you use the wealth they're creating to make state schools better. In the long run, if you do this, then you will ultimately achieve a higher proportion of children in state schools, because parents will vote with their feet - if state schools are reliably good, then only the very richest will choose to pay to go private. And actually, nobody cares very much if some kids are still going private, as long as everyone is getting a decent education.

The problem is that KS has moved his party towards the centre in order to make it electable, but a lot of his members are not happy about being there. This policy is just one example of that. They still hold the Corbynist view that equality is what matters above all, at all costs, and that if the route to achieving greater equality is (in the medium term at least) to make things worse for those at the top rather than better for those at the bottom, then thats what they want to do - even if the 'equality' they ultimately achieve is actually worse for everyone in the end. It's the very definition of levelling down rather than up.

I'm not a Tory defender, not at all. They let the private school sector carry on without doing nearly enough to improve the state sector. But if KS is going to be a centrist than he has to actually act like one.

Edited

Yes Blair got is and generally he knew you needed people to pay for stuff so he didn’t actually do these types of policies

This is a gimmick which could damage a sector and not bring in anything. And likely wasn’t needed to win anyway

Newbutoldfather · 06/07/2024 09:17

The arguments from private school parents are so self-serving.

The main one that they really care about (but won’t write down) is that they don’t want to pay it and it might cost some skiing holidays (or delay a house extension, or reduce meals out from twice to once a week).

The ones you will see lots of though are:

It will add strain to the state sector-not really true as schools will welcome the extra funding. And, most importantly, they never even gave the state sector a moment’s thought before now, except to avoid it like the plague.

It will make the private sector ‘even more exclusive’- true, but we passed the point when it was accessible to the traditional middle classes many years ago. That ship has long sailed.

The state sector should ‘just level up’- this one is really offensive. The state sector work very hard to overcome a severe lack of funds and a severe lack of basic parenting skills.

It is ‘the politics of envy’- said about every single tax which affects only the wealthy. It might be true, it might not. It is a bit of a Labour dog whistle. But that doesn’t make it unfair or wrong.

I do think it is unfair to suddenly introduce it, and I suspect and hope that they may phase it in or delay it. Schools should have a proper chance to prepare (after they know for a fact it is happening), and pupils education shouldn’t be disrupted. But, as the vast majority of private school parents know, pupils leave every single year due to family circumstances changing. Divorce, businesses going under and redundancy can all lead to a pupil being forced to change to the state sector. That is the downside of private schooling; if you can no longer afford it, it impacts your children’s education.

Pictionary · 06/07/2024 09:32

Newbutoldfather · 06/07/2024 09:17

The arguments from private school parents are so self-serving.

The main one that they really care about (but won’t write down) is that they don’t want to pay it and it might cost some skiing holidays (or delay a house extension, or reduce meals out from twice to once a week).

The ones you will see lots of though are:

It will add strain to the state sector-not really true as schools will welcome the extra funding. And, most importantly, they never even gave the state sector a moment’s thought before now, except to avoid it like the plague.

It will make the private sector ‘even more exclusive’- true, but we passed the point when it was accessible to the traditional middle classes many years ago. That ship has long sailed.

The state sector should ‘just level up’- this one is really offensive. The state sector work very hard to overcome a severe lack of funds and a severe lack of basic parenting skills.

It is ‘the politics of envy’- said about every single tax which affects only the wealthy. It might be true, it might not. It is a bit of a Labour dog whistle. But that doesn’t make it unfair or wrong.

I do think it is unfair to suddenly introduce it, and I suspect and hope that they may phase it in or delay it. Schools should have a proper chance to prepare (after they know for a fact it is happening), and pupils education shouldn’t be disrupted. But, as the vast majority of private school parents know, pupils leave every single year due to family circumstances changing. Divorce, businesses going under and redundancy can all lead to a pupil being forced to change to the state sector. That is the downside of private schooling; if you can no longer afford it, it impacts your children’s education.

I disagree with your opening paragraph. Actually, personally we can afford the VAT. However, I'm concerned about those who cannot and therefore make schools unviable. It will be horribly disruptive to those students and parents, and Especially those who attend private schools due to their Sen. Labour won't have a magic wand overnight to help these kids out and it's pure ignorance (and lacks compassion) that these kids will comfortably slot back into large mainstream schools. These are the students who will be most vulnerable. My dc is due to go to a small private school due their SEN (no ehcp) but if it closes down because of this policy, because of falling rolls and those pulling out as they cannot pay the VAT, it will cause a lot of grief and stress.

I also think it is bringing up another level of divisiveness which is proven in these online forums let alone in real life.

Such a loathsome policy.

potionsmaster · 06/07/2024 10:23

"The state sector should ‘just level up’- this one is really offensive. The state sector work very hard to overcome a severe lack of funds and a severe lack of basic parenting skills."

Why on earth is this offensive?? Nobody in their right mind is blaming the state sector for not being good enough. Or claiming that state schools aren't already working their arses off to overcome massive challenges. And it's not 'just' levelling up - it's a massive, massive task. But this policy won't achieve it, and may make it harder - all it will do is level down.

What the state sector needs is loads more money, much better government management (better, not more), and the tackling of the fundamental problems that contribute to underachievement. This policy will achieve none of those things

lavenderlou · 06/07/2024 11:30

twistyizzy · 06/07/2024 09:00

There isn't a low birth rate in current secondary though and that's where the bulk of leavers will come from

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The specific post I was replying to talked about how many at private preps would wait until the secondary transfer age in 5-6 years.

Araminta1003 · 06/07/2024 11:35

There was nothing in the new education secretary’s opening speech on VAT on private schools, most of what she said was quite reasonable.

Interestingly she referred to maths teaching in primary schools (not secondary). I think they should focus on making maths a daily practice thing at home as well, as they do with reading. That will be a cheaper and easier way to make sure most kids are numerate by the end of primary school. It’s in the culture of numerous Asian countries and we can easily and cheaply copy that here. As well as daily dance/exercise in primary schools. It need not all cost a ton of money. They need to get their thinking hats on and copy other countries and do effective but cheap policies. Kids who are numerate can use sites like Dr Frost maths later on in secondary.

Poor parenting is as much to blame as screen addiction/ultra processed foods/lack of exercise. This is where Surestart comes in. You can’t plonk a baby/toddler in front of screens and not talk to them and then think speech & language services will sort out your failings. Parenting is hard work. Those who had shitty role models themselves need and deserve the support.

Araminta1003 · 06/07/2024 12:20

https://schoolsweek.co.uk/the-proudest-day-of-my-life-phillipsons-full-speech-to-dfe-staff/

I think they will realise that VAT on the private sector just has a bad impact on the most vulnerable there and I think it will be delayed. They just cannot charge parents of children with higher SEN VAT, it goes against anything a Labour Government stands for.
VAT is pro elite not anti elite and they must understand that.

'The proudest day of my life': Phillipson's speech to DfE

Education secretary says she has 'greatest job in government', but warned of 'scale of the challenge ahead'

https://schoolsweek.co.uk/the-proudest-day-of-my-life-phillipsons-full-speech-to-dfe-staff

Avarcas · 06/07/2024 13:22

twistyizzy · 06/07/2024 09:07

Well considering Brudget Phillipskb refused to engage with the indi sector prior to, and during, the election I'm not getting my hopes up. She was invited on numerous occasions but flatly refused and has never stepped foot in an indi school.
Now as SoS for Education she represents ALL forms of education in the UK so it will be harder for her to continue to refuse to engage but it really shows where Labour's head is at with this
I wouldn't mind so much if Starmer and his wife plus 8 of the front bench hadn't benefitted from private education. It reeks of pulling the ladder up after them ie it was fine for us but not for your children. He admits that he owes a lot to his education and now seeks to deny that opportunity to all but the truly wealthy who won't notice that 4K+ additional cost per year.

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What has Starmer's wife's education got to do with anything? I notice you say nothing about his children. They are in state school.

How many times does it have to be said that Starmer went in good faith to a state grammar school that became independent while he was a student there and so he was not required to pay fees? The school would have effectively been the same provision, just with a different name and price tag. He had a full scholarship to get through sixth form. It wasn't as if his family chose private education.

twistyizzy · 06/07/2024 13:26

Avarcas · 06/07/2024 13:22

What has Starmer's wife's education got to do with anything? I notice you say nothing about his children. They are in state school.

How many times does it have to be said that Starmer went in good faith to a state grammar school that became independent while he was a student there and so he was not required to pay fees? The school would have effectively been the same provision, just with a different name and price tag. He had a full scholarship to get through sixth form. It wasn't as if his family chose private education.

Edited

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The school gave 2 years advance notice prior to him starting that it was becoming private. They still chose to send him. That's more notuce than we have had. The point is that he was happy to benefit from that education but now seeks to prevent others from doing the same. That's the issue.

Ozanj · 06/07/2024 14:13

Araminta1003 · 06/07/2024 11:35

There was nothing in the new education secretary’s opening speech on VAT on private schools, most of what she said was quite reasonable.

Interestingly she referred to maths teaching in primary schools (not secondary). I think they should focus on making maths a daily practice thing at home as well, as they do with reading. That will be a cheaper and easier way to make sure most kids are numerate by the end of primary school. It’s in the culture of numerous Asian countries and we can easily and cheaply copy that here. As well as daily dance/exercise in primary schools. It need not all cost a ton of money. They need to get their thinking hats on and copy other countries and do effective but cheap policies. Kids who are numerate can use sites like Dr Frost maths later on in secondary.

Poor parenting is as much to blame as screen addiction/ultra processed foods/lack of exercise. This is where Surestart comes in. You can’t plonk a baby/toddler in front of screens and not talk to them and then think speech & language services will sort out your failings. Parenting is hard work. Those who had shitty role models themselves need and deserve the support.

Maths is already a daily practice in most primary schools. It just doesn’t go far enough. The jump between year 6 and year 7 is huge.

Araminta1003 · 06/07/2024 14:13

“The school gave 2 years advance notice prior to him starting that it was becoming private. They still chose to send him. That's more notuce than we have had. The point is that he was happy to benefit from that education but now seeks to prevent others from doing the same. That's the issue.“

Keir’s parents were clearly massively aspirational for him. Called him after Keir Hardie, the first Labour Party leader. He excelled at school. He played the flute and football — one delicate, one savage — and became a lawyer. His siblings called him “Superboy.” (Quoting from Google).

The last thing Keir Starmer should be doing is coming after aspirational parents of any sort.

Araminta1003 · 06/07/2024 14:14

“Maths is already a daily practice in most primary schools.“

@Ozanj - it is not enough. It needs to be reinforced at home as well, just like daily reading. To really become secure.

Avarcas · 06/07/2024 14:49

twistyizzy · 06/07/2024 13:26

The school gave 2 years advance notice prior to him starting that it was becoming private. They still chose to send him. That's more notuce than we have had. The point is that he was happy to benefit from that education but now seeks to prevent others from doing the same. That's the issue.

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Starmer won a place at Reigate Grammar in 1974 after passing the 11-plus entrance exam and the school became independent in 1976 so even with two years notice of this his parents, depending on the actual months, they may not have known that the school was to become independent and almost certainly not when he sat his eleven plus. Could you please share your source that they knew when he started?

It is not more notice than you have had. Labour's intention to impose VAT was reported in September 2023. You will have had two year's notice if it is not implemented until September 2025.

twistyizzy · 06/07/2024 15:07

Avarcas · 06/07/2024 14:49

Starmer won a place at Reigate Grammar in 1974 after passing the 11-plus entrance exam and the school became independent in 1976 so even with two years notice of this his parents, depending on the actual months, they may not have known that the school was to become independent and almost certainly not when he sat his eleven plus. Could you please share your source that they knew when he started?

It is not more notice than you have had. Labour's intention to impose VAT was reported in September 2023. You will have had two year's notice if it is not implemented until September 2025.

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I do have a source, will dig it out. They will have known prior to him sitting his 11+ because that will have been less than 12 months to his start date. The issue I have is that it was acceptable for Starmer to benefit from ambitious parents, an ambitious school but now he wants to deny access to people just like his parents ie normal working parents by making it financially unaffordable.

2023 there was no election date. Labour have changed their position on indi schools many times.
First it was to abolish them then it was to end charitable status, now it is VAT. If a party (that isn't in power) can't stick to a coherent policy then how can people plan?
The other pint is that Labour have lied, it is illegal to levy tax on education. They know that yet have put it as a manifesto pledge.

Avarcas · 06/07/2024 16:00

twistyizzy · 06/07/2024 15:07

I do have a source, will dig it out. They will have known prior to him sitting his 11+ because that will have been less than 12 months to his start date. The issue I have is that it was acceptable for Starmer to benefit from ambitious parents, an ambitious school but now he wants to deny access to people just like his parents ie normal working parents by making it financially unaffordable.

2023 there was no election date. Labour have changed their position on indi schools many times.
First it was to abolish them then it was to end charitable status, now it is VAT. If a party (that isn't in power) can't stick to a coherent policy then how can people plan?
The other pint is that Labour have lied, it is illegal to levy tax on education. They know that yet have put it as a manifesto pledge.

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So he won his place in 1974 and the school became independent in 1976 and you claim (although still no source and it doesn't come up in a google search) that the school gave two years notice before becoming private. The timeline does not make it clear that they knew. In any case it seems ridiculously petty to go into something his parents would have decided fifty years ago! More importantly, the current situation is that his children attend state schools.

This article was in September 2023 Labour will add VAT to school fees. Anyone with any sense knew Labour would win the General Election when it came. The fact is it was earlier than expected and you still had two years' notice regarding their mooted policy before its implementation. Even if it was not clear what exact form it would take, it is disingenuous for people to claim that they didn't know it was coming.

It would have been illegal if we were in the EU but we are not. I think with Starmer's career history, he will be able to work his way around the UK legal red tape to get it implemented. Labour were very clear in their manifesto that this is a key policy for them and they have won with a massive majority on the strength of this manifesto. I hated Brexit but it happened and I had to accept it. This is the same on a much lesser scale.

Labour will add 20% VAT to private school fees within first year of winning power

Plans could raise £1.7bn to spend on lifting educational standards across the state sector, party says

https://inews.co.uk/news/politics/labour-vat-plans-hit-private-schools-next-year-starmer-prepares-immediate-rollout-2640753?gad_source=1&gbraid=0AAAAABfPv1qK1CbDnKoeOcZnqSJ8wvGLP&gclid=Cj0KCQjw1qO0BhDwARIsANfnkv-Ab0pYebqS6TMClppyp1MdUkcgvCZWSpRiInypgkdq4XsqLIaSMpYaAgtPEALw_wcB

twistyizzy · 06/07/2024 16:06

Avarcas · 06/07/2024 16:00

So he won his place in 1974 and the school became independent in 1976 and you claim (although still no source and it doesn't come up in a google search) that the school gave two years notice before becoming private. The timeline does not make it clear that they knew. In any case it seems ridiculously petty to go into something his parents would have decided fifty years ago! More importantly, the current situation is that his children attend state schools.

This article was in September 2023 Labour will add VAT to school fees. Anyone with any sense knew Labour would win the General Election when it came. The fact is it was earlier than expected and you still had two years' notice regarding their mooted policy before its implementation. Even if it was not clear what exact form it would take, it is disingenuous for people to claim that they didn't know it was coming.

It would have been illegal if we were in the EU but we are not. I think with Starmer's career history, he will be able to work his way around the UK legal red tape to get it implemented. Labour were very clear in their manifesto that this is a key policy for them and they have won with a massive majority on the strength of this manifesto. I hated Brexit but it happened and I had to accept it. This is the same on a much lesser scale.

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This will be the UKs first divergence from EU law as we have carried many of the EU laws with us:

https://www.lawsociety.org.uk/topics/brexit/retained-eu-law

Completely separately, we are a signatory to the European Convention on Human Rights (which has nothing to do with the EU whatsoever - don’t be fooled by the name) which contains other protections around education and discrimination.

Labour know all this.so they are the ones being disingenuous.
Actually they haven't got a huge majority based on their manifesto, a lot of votes were a protest vote against the Tories.

Retained EU Law

The Retained EU Law (Revocation and Reform) Act makes major changes to the body of retained EU law in UK domestic law.

https://www.lawsociety.org.uk/topics/brexit/retained-eu-law

thred278 · 06/07/2024 16:25

user1477391263 · 06/07/2024 02:17

The solution re grammars is simple and is already being carried out in some areas; focus on kids from poor families.

In fact, if grammars are supposed to be about this sodding “social mobility,” OK, let’s just make them literally for the poor kids. Look at all the FSM kids, and offer a grammar place to the top-performing 30% (or whatever) of this group. Nobody else allowed in grammars - just the top-performing FSM kids. Totally feasible solution if we actually want grammars to be about social mobility.

Most grammar school parents, of course, would be horrified if we did this. Because for all the vague whining about “ooh, grammars are about social mobility! They are full of rough-but-bright kids!” the reality, as we all damn well know, is that grammars are about middle class parents wanting a private school that is free.

Edited

The ridiculousness of the policy though is that this acceptable. Middle class and richer families tutoring for grammar entry is acceptable or moving to the catchment area of outstanding schools is fine but using private schools is the thing that needs to be further taxed.

Seems bonkers to me.

Dabralor · 06/07/2024 16:28

I suppose it could lead to a partial collapse.

In the same way that unviable luxury businesses in other sectors fail, so too will some of these unfortunately.

In many areas, though, there is significant slack within state provision due to people moving away from areas that are too expensive and having fewer children.

Avarcas · 06/07/2024 16:28

twistyizzy · 06/07/2024 16:06

This will be the UKs first divergence from EU law as we have carried many of the EU laws with us:

https://www.lawsociety.org.uk/topics/brexit/retained-eu-law

Completely separately, we are a signatory to the European Convention on Human Rights (which has nothing to do with the EU whatsoever - don’t be fooled by the name) which contains other protections around education and discrimination.

Labour know all this.so they are the ones being disingenuous.
Actually they haven't got a huge majority based on their manifesto, a lot of votes were a protest vote against the Tories.

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Hanging on to the legal red tape just smacks of clutching at straws, similar behaviour to denying that VAT was coming (despite that being clearly stated in black and white last autumn) and then claiming no notice was given. Best to accept it is happening and plan accordingly.

The reasons behind their huge majority are actually academic. The point is that Labour have one. Even if people were voting as a protest vote, they clearly cared much more about getting rid of the tories than a private school VAT policy or they would have voted differently. They didn't.

twistyizzy · 06/07/2024 17:13

Avarcas · 06/07/2024 16:28

Hanging on to the legal red tape just smacks of clutching at straws, similar behaviour to denying that VAT was coming (despite that being clearly stated in black and white last autumn) and then claiming no notice was given. Best to accept it is happening and plan accordingly.

The reasons behind their huge majority are actually academic. The point is that Labour have one. Even if people were voting as a protest vote, they clearly cared much more about getting rid of the tories than a private school VAT policy or they would have voted differently. They didn't.

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You were the one who said "Labour ... have won with a massive majority on the strength of this manifesto" yet now you are saying it is academic why they won. You can't have it both ways.
Fighting to stop something happening that isn't currently legal is not "Hanging on to the legal red tape". It isn't beauracratic fine print, it is the law.

Avarcas · 06/07/2024 17:20

twistyizzy · 06/07/2024 17:13

You were the one who said "Labour ... have won with a massive majority on the strength of this manifesto" yet now you are saying it is academic why they won. You can't have it both ways.
Fighting to stop something happening that isn't currently legal is not "Hanging on to the legal red tape". It isn't beauracratic fine print, it is the law.

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Apologies if what I meant to say was lost in translation. My emphasis was on the fact that they have a clear and huge majority. The truth is that people either loved their manifesto of were accepting of it alongside whatever made them cast their Labour vote. Either way, it is a fact that the majority does not have strong feelings against VAT on private schools. Only a very small minority does and Labour knows that. Labour has a clear mandate for it. They will most likely get the legislation to work for it. And if they can't, they will find another way to extract tax. They have five years to find another mechanism. It is now reality.

Araminta1003 · 06/07/2024 17:31

No @Avarcas - some of us think they won’t get away with implementing VAT on private schools and that it was just electioneering. For starters, they have to deal with the SEN question first. They really cannot shaft a whole lot of SEN schools when our successive Governments failed to build and keep enough SEN schools going. They have to figure out how they deal with that.
And no I do not think they can simply charge VAT on independent schools. Some sort of private school supertax maybe, but not VAT.

twistyizzy · 06/07/2024 17:32

Avarcas · 06/07/2024 17:20

Apologies if what I meant to say was lost in translation. My emphasis was on the fact that they have a clear and huge majority. The truth is that people either loved their manifesto of were accepting of it alongside whatever made them cast their Labour vote. Either way, it is a fact that the majority does not have strong feelings against VAT on private schools. Only a very small minority does and Labour knows that. Labour has a clear mandate for it. They will most likely get the legislation to work for it. And if they can't, they will find another way to extract tax. They have five years to find another mechanism. It is now reality.

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And in the meantime it wil end up costing more than it brings in.
I'm not a complete idiot, the chances of them forcing it through are high however it will be challenged legally and it wil end up being a pointless waste of money. They have already had to exempt SEN and state boarding schools, those won't be the end of the exemptions.
In any case it has to go through OBR first as they are committed to this. However i am angry that they have sold it as "easy" to do when they know it won't be. Maybe if they had engaged with the sector previously they may have been more aware of the challenges however Phillipson has previously refused any requests to engage. Now she has a duty to ALL parts of the sector she will have to start engaging.

Avarcas · 06/07/2024 17:37

twistyizzy · 06/07/2024 17:32

And in the meantime it wil end up costing more than it brings in.
I'm not a complete idiot, the chances of them forcing it through are high however it will be challenged legally and it wil end up being a pointless waste of money. They have already had to exempt SEN and state boarding schools, those won't be the end of the exemptions.
In any case it has to go through OBR first as they are committed to this. However i am angry that they have sold it as "easy" to do when they know it won't be. Maybe if they had engaged with the sector previously they may have been more aware of the challenges however Phillipson has previously refused any requests to engage. Now she has a duty to ALL parts of the sector she will have to start engaging.

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How "forcing" it through. They have the electoral mandate to do this. It is now a real policy that was part of their manifesto that the current Government will enact, or find a way of reaching the same outcome. Nothing out of the ordinary. Okay you don't like it, but the majority is fine with it clearly. It is what it is.

Avarcas · 06/07/2024 17:39

Araminta1003 · 06/07/2024 17:31

No @Avarcas - some of us think they won’t get away with implementing VAT on private schools and that it was just electioneering. For starters, they have to deal with the SEN question first. They really cannot shaft a whole lot of SEN schools when our successive Governments failed to build and keep enough SEN schools going. They have to figure out how they deal with that.
And no I do not think they can simply charge VAT on independent schools. Some sort of private school supertax maybe, but not VAT.

"Get away with". It is a manifesto policy for goodness sake. It is not just electioneering. They clearly feel strongly on it and the majority must be okay with this or they would not have been elected. They are making SEN exemptions so I am not sure what you are talking about. I don't think it really matters what you think they can do, let the courts decide.