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?

Did you read the posts? The poster initially said

"It’s politics of envy. Say good bye to the Big Society. Society will be even more divided under Labour because this is effectively class war! So if someone declares war, war it is!!"

Then followed up with

"There are things we can all do about it. They are charitable organisations but the reality is that the part of the endowment that is paying for these charity often don’t go as far anymore. That’s why you have fund-raising activities for the bursary. We can all start by stopping to contribute to these activities."

This seems to suggest actively targeting bursaries as a weapon in a class war. That is something quite different from a situation where a school has to reduce them as a result of a different fiscal scenario. Very different from a conscious "war it is" mentality where the victims would be assisted place children.

@strawberrybubblegum you also said that this is "Not vindictiveness, just natural consequences". Really?

VAT is simply the wrong tax to use. We get that the Labour Party want to get at elite private schools. But using VAT and VAT on education is simply completely misguided.

They need to go consult with some proper tax experts and come up with a super elite private school tax if they must.

Agree @Araminta1003 - are they saying that private schools add more value than state ones? You'd think they might want to change that fact by not reducing the private school value add.

What really gets me though is that over 70 percent of our school costs are teachers salaries and pensions, so this is, in large effect, a tax on that.

Not really great as a concept.

This is a public forum, and there are some people who are angry and vintictive on both sides.

I don't condone the pp saying not to do any fundraising, nor the couple of posters on another thread who suggested applying for state school places they don't need.

It's no better on the other side: I've seen posters saying that they can't wait for private school kids to be pulled out and they hope they'll get given sink schools and be bullied for being poshos.

I believe (still the optimist) that these views are in the minority on both sides, and that the individuals are angry. As a minority, they are also powerless. None of these vindictive suggestions(on either side) are actually going to happen.

I believe the people making actual decisions will be more measured.

... That schools will still support the community as far as they are able to, even though their funds will be more limited as they provide hardship funds to existing parents and try to keep fees down.

... That the Labour Party doesn't actually want to harm private school kids, even though they're willing for a cohort who already suffered covid to be sacrificed.

But despite that, there will be real consequences to this policy. That's not threats, that's not vindictiveness, it's just prediction. It's a substantial new tax on an area which currently provides huge social good, and targeting a demographic who are already under financial pressure (as everyone is) but have significant options available to them.

Every policy has negative consequences.

Pretending they don't exist - not thinking through whether the cost is worth it for what you'll gain - is poor government.

www.google.com/amp/s/www.dailymail.co.uk/news/article-13568341/amp/Labours-plan-free-breakfast-clubs-primary-schools-unlikely-tackle-classroom-absences-help-family-budgets-says-leading-think-tank.html

Then we run into a different problem. The super elite private schools are international businesses that bring in money and soft diplomacy, and cannot be separated from general treatment of the super wealthy in the UK. Much as people would love to hammer them with taxes, they hold a lot of cards. The first one being their mobility. And when they move they don’t just take their expensive cars with them, they may take business worth billions to the UK economy and thousands of jobs.

Going forward, parents who keep their DC in private schools will be forced to contribute an additional 20% of tuition fees to society. From the standpoint of their budgets, and of morality, why would it be unreasonable for them to reduce their charitable giving by a similar amount. They will be providing the same amount of benefit to others, just different others.

I am well aware of the difference between VAT and charitable status, I spent years advising on these issues

If and when the VAT exemption and business rate reductions are removed private schools, what would be the remaining benefit in remaining a charity for a school which was planning to use all its surpluses on educational expenses anyway? Just Gift Aid? Could much of that not be captured by a standalone "Friends of..." charity?

So, you acknowledge that it is indeed vindictive but now qualify that (minimise it) with the arguments that it is just a minority (based on your own optimistic opinion) and that it is displayed on both sides (two wrongs don't make a right) and that as a (supposed) minority they can't do much.

Okay, so suggested sabotage of bursaries is no big deal then and yet you go on to say "even though they're (Labour) willing for a cohort who already suffered covid to be sacrificed "

Quite apart from the hyperbole that a whole cohort of private school children will be "sacrificed" (they won't, many will stay in private education) does the sacrifice of one group of children (the ones whose parents pay for education) matter more than another (the ones whose parents can't)?

Yup-the government-to-be started it by drawing a line between “working class” and “non working class” with something as basic as education. It’s a divisive government-to-be. That’s the whole point of policies. Policies drive behavior. When people are prepared to spout divisive messages to get into power, that is how society will become. You can’t have your cake & eat it. Society? What society? The government-to-be will be laying the role of “society” by way of enforcement. There will be no need for society.

This is nonsense. There are many middle class DC in state education and some working class DC in private education. Why do you wish to interpret it as a class war and condone nasty behaviour at an individual level on these grounds? I am very middle class and a high earner. I am also a Labour voter and my children went to state school and are now at Oxbridge. I don't think VAT on school fees is a good policy. What side of your "war" am I on?

The definition of “vindictive” acknowledges that someone started this. And that someone is the government-to-be, creating divisive policies to create sound bites and win votes. So I’m not sorry to be labelled “vindictive”.

I didn't use the word vindictive. Another poster did.

That's a bit of an asymmetrical argument. So you are suggesting targeting school bursaries to get back at the Government. Do you realise that it is bursary children in your school who will suffer and not Keir Starmer? Hardly revenge on the protagonists.

In any war, there will always be people who don’t pick a side. It is what it is. You do you. Doesn’t take away the fact that we now have politicians creating policies and sound bites that are divisive and inflammatory to win votes.

“This is nonsense. There are many middle class DC in state education and some working class DC in private education. Why do you wish to interpret it as a class war and condone nasty behaviour at an individual level on these grounds? I am very middle class and a high earner. I am also a Labour voter and my children went to state school and are now at Oxbridge. I don't think VAT on school fees is a good policy. What side of your "war" am I on?“

ok @ForlornLindtBear - I am a similar demographic although I have already voted LibDem by post.
Let’s unpick this- do you agree with me that Oxford and Cambridge are also hugely elitist institutions? What to do about that? Once you start this kind of thinking and accepting it, where will it end? Are you happy for those unis to also get it in the neck in due course?!

@Araminta I studied at Oxbridge and I think it was very elitist way back then. I think they are doing a lot to change that with widening participation. When I look at my DC's group of friends, there is a diversity that was generally lacking when I studied there. So in terms of demographic, I think it's changing but it still has a very elite bubble feel to it, if that makes sense. Varies quite a lot by college though. Who knows what changes are ahead in the tertiary education sector but I don't think we can assume some unis will get it in the neck by extension to a VAT on private school fees policy. Some of these colleges are so wealthy that they would be very well insulated against 'getting it in the neck' in any case.

“Some of these colleges are so wealthy that they would be very well insulated against 'getting it in the neck' in any case.“

That is the same for the elite private schools with endowments. They are insulated from Government interference and ideology. But the smallest and weakest players are not and therefore, I am happy to take sides and be against this policy. I am happy to go as far as saying it has lost them my vote. I am angry they are not committing to helping state education properly and that yet again, it’s all about the NHS. I am also angry that there are no plans re higher education and the difficulties there.

There is a lot of anti elite thinking going on and using a concept of “elite” as the bogeyman. It leads to a road of precisely nowhere. It comes from a far left point of view of closed borders - which is not the situation we find ourselves in. Far from it.

I do not like this policy but I am not a single policy voter.

Everybody votes on policies that matter the most for themselves. If this is not relevant to you, it’s not relevant. Vote on something else. But I think that this policy symbolises a lot more than money and is a deliberate attempt to create sound bite that will create a more divided society. Responsible people standing for office should think through issues like this, and create policies that bring people together, not create different labels for people and put a target on their backs because of perceived “elitism” to win votes. If they don’t, then they are not fit enough to govern.

I'm not really interested in a purity spiral.

I'm interested in predicting consequences and governments thinking through good policies.

The trouble with Labour (speaking as someone who voted Labour under Tony Blair) now is that it is firmly positioning itself as a party for the working class. What about the rest of us? Hang everyone else to dry? Who’s looking after the rest of us?

Then you must be at the wealthier end of the private school spectrum (which is a wide spectrum). Most people I know are trying to work out how to avoid a hard and immediate exit but are planning to make sure they get offered a spot of the best local state school at the next natural break (years 3, 7, sometimes 9 and 12)

This policy is very important though. It is a gateway policy and it will, sooner or later, touch something you really draw a red line at.

I agree, new labour left private schools alone for a reason, new labour model 2 has a tougher climate going in, but I wish they'd raised income taxes instead of breaking a principle on education and screwing over children they say are outside the people they care about. They're nowhere near as good as the new labour team.

No, I don’t agree with income tax. The only way out of this is to grow out of it. When the pie is bigger, you don’t need such a big slice of the pie. And it encourages investment and inflow of people who can generate more valuable/productive exports.
At the moment, we’re all fighting for a slice of the pie that has remained stagnant for years. We have an aging population, so we need more allocated to healthcare. But the size of the pie hasn’t grown. So we just keep squeezing it from other parts of the economy. And we’re busy fighting between ourselves for a bigger slice of this pie.
Ask yourself, how is it that less companies are choosing to IPO in London. We used to be good in financial services, even that is slipping away. If New Labour was Education, Education, Education, we should now be saying “Export, Export, Export” and lower taxes.
All the politicians care about is defining who is “working class”, who is not. Who is “elite”, who is not. Keir Starmer understands “perceived elitism” because he was part of that segment of the society. They are doing it because it’s sound bites to win votes and power. Which tells you a lot about them.