How soon might a Labour Government put 20% VAT tax on private school fees?

[jennylamb1]

That really. Given that an election date has been declared for July, how soon might a Labour Government set their first budget?

It will go some way to leveling the playing field and making it slightly more fair
Private schools are not charities
Private schools are a luxury
Therefore it is just and right ,they pay VAT

The paper worth reading is the Adam Smith Institute.

You need to update your model as follows:

• not 20% but 15%, allowing for reclaim on purchases
• contraction of tax revenues on independent school expenditure - the sector generates £5.1bn of direct, indirect and induced taxes so just take off the migration % of £5.1bn
• As somebody else pointed out, the loss of both tax revenue and economic value-add / multiplier when families don't choose to work for the fees they no longer need

Breakeven's going to be more like 10-15%

Even if the policy brings £0 into the state?
0.25 teachers per school isn't going to have am impact.

Education of children should be equal, regardless of ability, or disability or the bank balance of their parents.
Anything else is a unjust unfair society

Well actually some are charities and take their charitable aims very seriously but that has nothing to do with VAT in any event.

And levelling the playing field means some children suffering. How is that fair? I appreciate that you have been let down by the state system (I was too and it ended up with severe mental health issues) but make others suffer is not the answer.

Agreed thar every child should have access to high quality education. This policy won't achieve that.
Instead we should be requesting a Royal Commisdion to look into state education and have cross party agreement for the long term funding for education. VAT is a distraction to move the focus away from Labour doing anything meaningful.
The shocker is that no party values education.
There will always be disparity in incomes which means disparity in outcomes for children because ultimately the outcome for each child depends on education of parents and the homelife.

But what does “equal” mean? It can’t be equal because children have different needs. Some will flourish in schools of 1000+ pupils, others need much smaller environments. Some need specialist SEN support, others can manage in a mixed ability class. Some need a super academic school (like my state school son) and have no interest in more practical subjects.

So what do you plan to do with the inbalance in state schools?

DD's comp offers 4 languages including Latin, 6 different visual arts options plus music and drama, horse riding, fencing and archery and huge numbers of other extras. Some schools only offer 1 language, 1 art option and no music and very few extra curriculars.

How about selective state schools? Are you going to ban grammars?

How about tutoring, private sports coaching, private music lessons?

How about expert parents who can teach their own children - is that banned too?

What about schools like the Royal Ballet School where the government pay the fees?

How about the children of Armed Forces or Crown Servants who are currently educated in private boarding schools? Where do they go when you have banned private schools?

Are you going to ban parents from sending their children to Eton-sur-Loire when you've closed them down here?

Or stop them from group home-schooling with ex Public School teachers as tutors?

Did your parents not teach you from a young age that life isn't fair?

Actually I can't disagree with most of that ,you are right ,but the politicians don't need to value education,they are busy using private schools themselves .
And yes houses ,and expensive holidays , designer clothes widen the gap between all children being equal
But I strongly feel education should be the same standard for all our children,so they all have the chance to be the best they can be .
All children should have access to the standard of education that is private ,not just those who's parents have the privilege of finding the spare money to send little Xander to private school .
How much his prospects will prosper, compared to the child who's mother is at a food bank every Thursday.
That is absolutely not fair

So then how about parents who use tutors to get their kids into grammar schools?
Parents who can afford to move into the catchment areas of great state schools?

All of these people are perpetuating inequality yet nothing is said about stopping them!
There is entrenched inequality in many state schools already. VAT won't make an ounce of difference to this.

I agree that all state schools should be brought up to the level of private schools, if that happened then most of us wouldn't use private. No political party is trying to make that happen though. Labour's policy is merely smoke and mirrors behind the facade of "tax the wealthy".

Labour is just the nearest policy to doing slightly something about the inequality of private education
I agree it's not enough,it doesn't go far enough
I've fought my LEA till I'm exhausted and mentally ill
Just trying to get some sort of normal for my kids ,
I guess that massively colours my view on a child's education being something that can be paid for .
Nothing will change my mind on that
To be honest,I'm not expecting labour to go through with it,I suspect to many of them have their own kids in private school
If labour change their mind about this policy,I will switch my vote.
I'm just one person,and my views have no impact on what labour do ,so this is just wasting time really

It is terrible that you've had such a hard tind and I can completely understand how that colours perceptions. I fear you are wrong and that they will bring it in but they will definitely then face legal challenges etc.
Instead they could actually spend their time looking into correct funding of education through general taxation which would result in much larger annual amounts and would ensure sustainability. I would happily pay an education tax through raising income tax as that would be spread out fairly seeing as we all benefit from good education.

I don't really understand this 'fair' argument (perhaps that's because I'm not a socialist?). I could say it's not fair that some people I know have bigger house or better cars or nicer holidays than me, but it's not true is it? They've had different opportunities or made more of them or made different choices - isn't that just life? I don't think it's right that so much disparity exists in our state funded education system where some families are priced out of catchment areas for good schools and some schools are underfunded because of falling birthrates and many children don't have the teachers they need becuse there are so many vacancies.... but I don't see how this policy is going to resolve any of that and there's a good chance it will make things very much worse both in quite a widespread way, and certainly for individual children, schools and famillies.

The irony is that the very type of private school that some people are railing about is exactly the type of school that isn't going to be affected by this - the ones where the parent demographic is so wealthy they don't care about a rise in fees. So if you really feel that private schools are elitist and unfair, this isn't the way to fight that at all.

it would’ve been far fairer if labour had policies that widened access to private school rather than made it harder. Diversity in education is important - one size fits all fails many.

It will just mean an influx of children into an already failing state system which will mean any support your children already get will be even more stretched as I bet you they will increase class sizes further. This is lose lose for everyone and I have no idea why people can't see it. I am paying for two places in state school that my children are not using. If they have to return to state education then that 'extra' money will go on educating my children. Also, if private schools were to be abolished then tax revenue would go down as many people would stop working (like me! I literally work to pay school fees (as an administrator at a local council)). Everyone does the best they can possibly do for their child. This is what is best for my children. Why can't people be allowed to choose? Private education DOES NOT take money from state schools. Every person with children in private schools are still paying towards state schools, plus freeing up spaces.

Clearly state education should be excellent but it just isn't, and this is not the answer. There needs to be a complete overhaul. This just won't provide enough revenue as only 7% of kids are actually in private education and many will leave. Plus, many state schools are over subscribed. If you can't get into your local school, the LA has to pay for transport to take your children to the closest one - so you're about to have a load of ex-private school kids being ferried around in taxis paid for by the already over stretched LA. Bonkers! I can see the headlines now!

Why don't we go after people using private health? This is apparently a luxury. according to some?

Why don't they tax gambling instead? That doesn't improve anyone's lives?

Also, Labour could tax pensions if they get in......shocking.

You've made a mistake here, I think. The way you've used X in the formula isn't the percentage of private kids who shift to state: it's the percentage of all school kids that who shift from private to state.

So the breakeven according to your formula is when 2.8% of all kids shift - ie 40% of kids currently at private school (2.8/0.07)

You can do a quick sense check on that, which is that every child who remains in private raises 3.6k. Each child who switches costs 5.5k.
If you had 100 kids, and 40% of them left then you'd raise 603.6k = 216k
But you'd need to fund 405.5k = 220k

But, that doesn't tell the whole story. As pp mentioned, you need to include a whole load of other things like:

• VAT offset from things private schools buy
• Reduced income tax if parents work fewer hours to support state + extracurriculars (and simply because they'd rather work less if they don't need to cover fees)
• Reduced income tax on teachers salaries if not all the jobs lost in private switch to state schools (wrong geography, wrong subject or personal preference)

The Adam Smith institute estimated that 10-15% of private schools kids switching (ie 50-75k fewer children at private school than now) would be the point at which the policy starts losing money. They seem quite careful not to overstate how people will change their behaviour, it's worth a read: https://www.adamsmith.org/s/Short-Term-Thinking.pdf

Why should your son have his education,just because you can afford private,when mine missed years of education
....
Labour should go further and abolish all private schools

I just want to be perfectly clear here. You feel that, if only one of the two can be educated properly, you would prefer that neither be educated properly. Is that correct?

Actually I understand but my presentation is not good enough.

"If less than 2.82% (around 2 out of 5) go to state schools"

2 out of 5 already implies 40% of private school students shifted.

Merely attempt to understand the problem and give a rough idea under different scenarios.

More than happy if anyone could help to correct and enrich my model.

Ah, my mistake - I didn't see your "2 out of 5"

Do read the Adam Smith report. There were things in there I certainly hadn't thought of.

user that is a very common attitude - would rather everyone had a bad time than some didn't. In fact people are happier at work if no one gets a pay rise than if they do but the person on the next desk gets a bigger one. It is interesting psychologically.

Labour will find it quite complex to draft the new VAT legislation for this. I don't really see how they can easily put VAT on the boarding school element of fees (as they have said they will do - which is about half the fees for a boarding school) and how would they stop a school simply not housing the children but the children find accommodation near by not provided by the school? Same with VAT on school lunches at day schools - pupils presumably could go off site for lunch or bring lunch in to avoid VAT on that part. Music lessons one to one are often charged by the individual external teacher in many private schools including those I know and those schools which don't do that can move to that.

Labour will find it quite complex to draft the new VAT legislation for this. I don't really see how they can easily put VAT on the boarding school element of fees (as they have said they will do - which is about half the fees for a boarding school) and how would they stop a school simply not housing the children but the children find accommodation near by not provided by the school?

They couldn't stop a child having accommodation near the school rather than boarding obviously but I can't see this being a massively popular option. I mean it exists now I'd imagine but it's a different kettle of fish to boarding school. Are you suggesting some boarding schools might stop providing boarding but expect parents to have some weird convoluted arrangement with offsite accommodation. I actually don't think you're this stupid Lyds. Do you know any rich people?

It's quite self-sabotaging really. Since the ASD child who is getting an education could be eg a successful engineer delivering projects and bringing in the tax funding in 20 years time which will support the ASD child who sadly was failed by the state 20 years previously. The alternatively - if neither gets an education - is that there will be less money for the welfare state and more people who depend on it.

But I can see that @Monstermunch2 is very hurt and angry at how her DS has been failed and is lashing out. I feel for her, even though she is deliberately trying to harm my own DC in her misplaced anger.

That's an interesting one about boarding. Might the school split into 2 businesses? One provides only boarding services - but children are only offered a (paid) space if they are attending the school.

Many boarding schools are exploring innovative approaches. Eg selling then renting back halls of residence, or waiving fees for parents willing to house overseas students.

Having seen KS couple of nights ago with RS I have no idea how or if labour will put anything into a place. He looked like he came to a meeting unprepared. Or perhaps it was deliberate…

if school fees are too much we may switch to state education and my ds (who has a diagnosis) will need extra teachers attention and time. This will be taking teachers time from your child. We can currently just about afford it like other who I imagine are in the same boat.

as many above have already said this is not the answer to your child’s improved education and is not for anyone’s benefit, I therefore have no idea why isn’t everyone fighting not to have this implemented… albeit it may take a very long time if they do…

Please don't assume that your child will be taking time away from other children.

I very much doubt your sudden arrival in state education will mean you will get this right.

Others will have needs. It won't just be about yours.