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”

The expansion of nursery provision is going to be in existing primary school buildings I think.
Pupil numbers are down so there is spare physical capacity in a lot of schools. Focus on nursery is perhaps a move towards creating a new Sure Start type programme. It will be popular.

@twistyizzy “Magic money tree springs to mind”

I now prefer “the feeding of the 5000”. It is pure religion at this point.

I never thought I would get to my mid 40s and watching an Election was like watching Big Brother in the 90s.

"Perhaps it's because highly educated people often value education to a degree that can seem insane to everybody else and will go without almost anything else to pay for it (this is particularly true of immigrant families). "

I truly think this is insane

"This is particularly true of immigrant families"

I've always taken issue with this, it depends on who the migrants are and where they come from. Bangladeshi/Pakistani immigrants and their descendents get some of the lowest educational outcomes, as do Carribean. African Migrants, migrants from certain countries and certain circumstances do well. There is a Harvard paper on this addressing the same thing in the states about the model migrant myth.

The nurseries will need to be staffed though surely? Where are the staff coming from? Just over £11000 per year per nursery is less than £1000 per month. Even the cleaning costs will take up a fair bit of that!

As when he pointed out that her "chief" economic adviser counseled that unfunded tax cuts would likely lead to increased interest rates:

"I have lots of economists [who will back what I want]"

The uncertainty in the social "sciences" is so great that you can usually find a study or "expert" to support whatever you like.

You need to read less papers and meet more actual real people!!!!

@MyNameIsFine I don't think it's super rich, it's more about taking the edge of those groups who value education above all and usually do well so would be eventually Tory voters. And to please communists with equality agenda which will never materialise.
Btw, manifesto numbers assume about £2.5k pa per child in case of current 600k PS pupils. With average PS fees of £18k it seems to imply 25% exit to state. So ironically my assumptions were correct.
Well, we shall see

as always, sums it up perfectly
True and real Big Brother

I agree, more detail needed. But presumably the per pupil funding that schools receive to cover staff running costs will include their nursery provisions. As the total cost of funding schools has gone down due to falling rolls, there may be some extra capacity in that original budget to cover the increase in pupils at nursery age across the country. Separate from this new tax. I don’t know.

@MyNameIsFine

I've been meeting actual real people all my life, having worked in state education for years and state schooled my children, then in private education, as well as volunteering in my extremely diverse community.

Thanks

To the extent that Labour offers a financial justification for VAT on private education, it's that it might raise £1.7bn which will be allocated to school funding (among other commitments). The government estimates that a 1p increase in the higher rate will raise £1.25bn in 2024-25. Therefore, you would have to raise the higher rate by 1.4p to generate the same £1.7bn of revenue.

At some point, probably around £300k-£350k income, it would be cheaper for a taxpayer to pay the additional VAT for one child rather than the additional income tax required to raise this £1.7bn.

@nearlylovemyusername

The average is only 18k for secondary.

At this stage I'd pay to know which school. Esteemed teacher of economics quoting Harvard's racial research to support their argument. Just dying to know

I wasn't quoting Harvard's research, I was saying there is similar information in the states that is laid out by this paper.

Again, you haven't dealt with the point, just making sneering remarks. The data I've used on attainment from certain ethnicities is correct, so it does bring in the " migrant families value education" to question, if anything it is a great sweeping generalisation.

The "migrant families value education" point was also used to try to dismiss some of the success of the London Challenge in 2000s, it was pointed out by others, that many of the communities that were supposedly doing well because of cultural reasons, rather than the impact of the challenge policies, actually got poorer than average results outside of London.

There was a poster on another thread who said that they were happy about the tax, because it meant that there would be less academic competition for her children, which meant they stand more of a chance of getting into a great private school. They seem to be forgetting that standards are high at some schools precisely because they’re very selective!

Anyone else think they want a French style nursery system? Get the poorer kids in early and fully subsidised but inevitably higher child to preschool teacher ratios? Will it be safe?

They're probably being rational. A school with the highest standards is of no use to a parent if their DC have no chance of getting a place. By definition, very few parents, even very rich ones, will have DC who are so outstanding that they will definitely get a place at such a school. If the standards at the "most outstanding" school drop a bit but their DC have better chances of getting a place, so much the better; it'll still be the most prestigious school.

Yes, I can entirely see their point of view. If you just want a good educational environment where your child is going to come out with good, but not exceptional, grades, that's hard to find. Private schools are becoming more broad ability to appeal to a wider group of parents to survive.

BTW, in case people haven't joined it yet, there's a facebook group called 'Education not Taxation'. People have been sharing on there what they have left in the monthly budge and how much more fee increase they can cope with. (It's just feet stamping, of course, they're making it up)

ENT is more than just foot stamping!
It is a way to engage with parents across the sector and a call to action. Some great success so far in engaging stakeholders and a lot more going on behind the scenes.
The ONLY people who refuse to engage are Starmer, Reeves and Raynor.
The fact they ignore requests to engage from their parliamentary constituents is terrible.

She has an MSc in Economics from the LSE. She then worked at the Bank of England.

I was being ironic about the foot stamping! I'm feeling kind of hopeless, though. The fact is, Labour has made their own calculation, which goes something like 'Private schools have increased way beyond inflation and parents have kept up, why should a bit of tax make a difference?' and I can't see any reason why they would change course.

Technically it is a benefit but the value of the benefit is the marginal cost to the employer of providing the benefit which in the case of one extra pupil when the school has space in a year group is very small indeed. This has been tested in the courts in Pepper v. Hart (1992)

https://en.m.wikipedia.org/wiki/Pepper_(Inspector_of_Taxes)_v_Hart

This principal applies to all benefits you receive , it’s the cost to the provider not the value of the benefit to the recipient which is taxed.

I have PM'd you but there are lots of ways you can help to raise this issue and ENT are doing a lot behind the scenes.

Remember everyone- Sir Keir is not raising tax on working people! Do you lot not work then? Just living off ya trust funds?! And he is not raising VAT either.

Now how does that square with a 20% penalty on working parents with kids in private schools. I am finding it difficult to follow.