Labour confused and arguing among themselves over VAT on school fees

[Another76543]

This policy is getting more ridiculous by the day.

We have the shadow Attorney General who doesn’t understand the basic concept that the VAT position and charitable status are entirely separate issues. She also doesn’t understand that it’s parents and not schools who will pay the charge.

“the question is, is it appropriate in these circumstances for schools, such as in Eton or Winchester or whatever, to be seen as a charity and that, therefore, they should not be paying VAT on the huge fees”

This statement is factually incorrect on two things.

She also seems to think that any money raised will be spent on breakfast for children. The potential money has already been allocated to new teachers. They seem to think they can spend the same money twice.

https://www.independent.co.uk/news/uk/emily-thornberry-labour-institute-for-fiscal-studies-education-secretary-winchester-b2559439.html

The Party are also now fighting among themselves over this proposal.

https://www.independent.co.uk/news/uk/emily-thornberry-bridget-phillipson-labour-david-lynch-london-b2559684.html#

“sign of divisions within Sir Keir Starmer’s party over the policy”

My issue with the Labour statement that the birth rate has fallen since 2014 being provided as a justification for the proposed policy is that children in secondary schools were born before that, in very high birth years - and so it’s irrelevant, but it doesn’t seem to have occurred to them.

However the spaces being in the wrong areas, as in the example compounds that. I live in a rural area where this year children that have applied on time for their local secondaries are instead next term having to be bused more than 20 miles away to alternative schools where there are spaces, and even those are full now.

Finally an education story in main stream media that isn't about VAT and that affects the 93% of kids in state schools and their teachers. Well done Guardian.

https://www.theguardian.com/education/article/2024/jun/12/labour-teachers-union-head-strikes-by-autumn-daniel-kebede-neu

Do please read the blog. It's about bright kids and about families.

But why does it talk about bright kids. I don't want to open something that is only about one type of child? All types of children will be moving from private to state. It put me off before I even got past that bit. Its almost like the writer things that all private school pupils are bright.

Are you familiar with concept of CATs? Cognitive Abilities Testing? It is accepted that one can't tutor for it so is believed to be a true refelction.

My DC non-selective private primary runs it annually starting in Year 4. No prep is done for this, no VR, non-VR taught at that stage. Year group average was 128. National average is 100.

Edited to add - many privates quoted here just don't accept children below certain CATs level, e.g. St Pauls, Westminster require 135+ scores. So yes, it's prudent to assume that statistically these kids will be brighter than average. This does not mean that state kids aren't bright, please don't attempt to twist my words, but talking averages

@nearlylovemyusername Of course I do, I work in education and have three children at a comp. Why?

Any teacher pay rise needs to be fully funded otherwise schools will be on their knees financially

@nearlylovemyusername I can't tell from your post if you are trying to suggest that private school children are brighter based on one year groups CATS.
I was at a top girls selective boarding school that still rides high in the league tables many years on. Despite it being selective many of my cohort struggled in different areas. Some found maths easy but struggled with essay subjects. Other the other way round. Some struggled with getting on with self study, others loved the routine of revision. Some found a particular passion for eg biology or music and excelled. Our A level grades were pretty varied, and not wholly in line with what you would expect based on the selection criteria. I was on a minor *10% scholarship but didn't do particularly well at A's, but actually redeemed myself a bit at Uni. Most of us have gone on to have fairly average careers with the odd exception - a few done really really well and a few struggled with careers.
What do we mean by bright and why was the blogger making the assumption that the children going from private to state will be whatever this elusive version of 'bright' is. When I am working in state schools I see an enormous array of intelligence and the naturally bright ones don't have rich parents. Yes some children come across as more polished than others as they have engaged around the dinner table or get taken to cultural events outside schools, but they are not naturally 'brigher'.

Also you do know that state schools do CATS don't you? Mine all did them and were placed in sets in year 7 from that.

@Oakandashsplash would you mind sharing average year group CATs in your school?

Why? You are not really going down this path are you? What are you trying to prove? You want to compare one primary school with another secondary school and form what sort of conclusion?

I’m unsure which part of my post makes you think that I disagree with that. My kids are in private education and I’ve stated many times on this thread that I believe the state should step in to support families that need it.

Please read the blog. It's actually a response to the IFS which makes precisely the assumption you don't like (and I quite understand why, and I agree with you).

Just read it, please.

The issue at stake is that more and more parents won't be able to afford to do that.

What about the remortgaging idea for those who feel stuck financially and don't want to remove their children - clearly it isn't ideal for people and I feel sorry for people who feel forced to make this choice, but isn't it better than disrupting a child mid education?
Also what will all this remortgaging do for the economy? I am clueless about such things! Is it positive or negative for economy. I know lots of people saying that the economy will lose out as they are going to quit jobs and stop using local businesses etc. Is remortgaging a win for the children and the economy (if people can do it obvs, not possible for everyone)
https://www.telegraph.co.uk/money/property/mortgages/labour-private-school-tax-raid-forcing-parents-remortgage/

Article can be seen on archive PH if can't be accessed due to paywall

The majority of children in independent schools are not in the big well known independents who will be largely unaffected by this policy . They are instead in local ex grammars /direct grant/GDTST day schools, most of these have fees which are still < £20K pa . Contrary to what you read on MN most of these schools are not raking in the surpluses and many are predicated on pretty sensitive business models, this won't break them but it will affect how they run and most have been modelling the consequences for some time. ( I know because I have been one of the people doing this work)The exact effect will vary according to location, size, selectivity, type of school (prep/boarding/all through/coed etc) and alternative school provision in the area, London is a completely different marketplace.

The reality is that most of those to move back to state will be what's known in the trade as 'first time buyers' ie the children whose parents had no background in private education and have ended up there due to SEN, bullying, school allocation etc . These people are largely funding out of income and are quite literally on the brink. It will not be the wealthy , high achieving children of London lawyers because largely those parents will grit their teeth and soldier on. I have also heard of a surprising number who are intending to home educate if the fees get too much and i know of several teachers who are increasing their tutoring as providing they are below the VAT turnover threshold they will not be required to charge VAT .

Remortgaging? thanks but no thanks

In a very weird way I feel strangely relieved that I don't have to continue working through burnout to pay the fees and now someone else (other taxpayers) will pay for my DC education. The years of great education enabled them to get grammar place (which could have gone to a child whose parents can't pay for private anyway).

Labour are coming for the last penny of middle and high earners (PS VAT, CGT, pension relief, IHT, etc), there is just no point in working anymore above the level of providing for very basic existence

@MrChips

As far as the data I have seen shows its 1in 5 children in Surrey are in Private schools not 1/3.

Catchment size matters because of the distribution. If privates take children from a far wider range of distances than state, there is unlikely to be overcrowding in state schools if a few % migrate from private to state because they will be distributed between a wide range of state school catchments. It is not likely that the impact will be far more widely dispersed than one or two schools having to add classes?

Using the data from Surrey themselves, about 40,000 children in all are independently educated. If the IFS data is correct and about between 5 and 7% of students move schools this means that there will need to be places for 2,800 students. If we divide that across each year group that gives us about 215 students per year across the county, divided between 125 schools giving 1.72 extra students per school.

Now I know that it won't work exactly like this and there are more students at private secondaries than private primaries but it gives a baseline indication that there won't be huge amounts of extra accommodation needed. It might be higher in some schools and lower in others, but also as Surrey has a range of boarding schools so some of those leaving may not be migrating to Surrey schools.

CGT is paid by a very small % of people - 3%ish? Fewer than 5% pay Inheritance Tax. These taxes are paid by a tiny group, who are by definition the most wealthy.

"School fees £25k (average across primary and secondary, you'd be hard pressed to find a cheaper school in London at least)
Mortgage £20k
Living (all bills, food, cars, holidays) £30k - not exactly lavish

This is doable and leaves you with £6k savings/emergencies"

Do you not think that a family with one child that has 2.5k discretionary income per month will be able to make different choices with that which allow them to find 300 pounds a month for school? Seriously ?

You've also carefully crafted these figures to reach your desired outcome, many people in the top income decile are earning far more ( which is why when you get to the 95th percentile only 5% of the children are privately educated, half in the 99th)

@MyNameIsFine

"This poster has been on here for a week now trying to prove to people that thousands of pounds isn't a lot of money, based on the completely illogical argument that if you're spending a lot of money, you must have loads more! I think we should probably just stop responding to him at this point."

Its a genuine point and I've demonstrated that even with the budget laid out above it is possible,

Actually the more your wring your hands about a few thousand extra the more my stomach churns;.

Can't you just stop having avocados for breakfast and put the heating on less? This is the advice higher earners always give the poor/those who say that they can't afford private school.

This is the very last time I am going to respond to you. I would never dream of telling people who are struggling with cost of living to turn their heating down or stop eating avocados (who'd want to eat avocados anyway!). I'm not sure where you got the 2.5k from. 6 divided by 12 is not 2.5k. I don't believe you have children, or any idea what you are talking about. The fact that you took a salary from a private school, despite despising the parents who were paying it, make my stomach churn.

@Aladdinzane again, this is your interpretation.
I'm speaking based on my knowledge of at least few school cohorts. £2.5k discretionary spending when it has to pay all bills, insurance, commute, car etc, esp in London, doesn't stretch too far.
.
@bergamotorange these might be a tiny group but it's still all the same group targeted here. And it's that straw that breaks the camel's back. Just FYI - most of properties in Lon exceed IHT threshold

". £2.5k discretionary spending when it has to pay all bills, insurance, commute, car etc, esp in London, doesn't stretch too far."

Who are you trying to kid? All bills plus insurance commute and you last included, holidays.

You are telling me that a family that has a discretionary income of 576 a week is going to struggle to change their spending so they can save 11% ?

The median household disposable income before mortgage and school fees etc is 621!

@nearlylovemyusername

Also, you are still allowing for savings in your calculations of 500 a month.

Really? Like there is SO much flex in that budget it is unreal.