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 only category I would agree with here is military and diplomatic personell, and there only for those who have been and/or are likely to be forced to move their families for their posts. Even for them, I would argue that the government should simply pay for those DCs education, as it is the government which is requiring the disruption to their education.

As for the other employment categories, if you believe that society is undercompensating them, as I do, seek to compensate them directly for their work, whether they are childless or have ten children. Not via a backdoor.

Can I add to the list.

There are some private boarding schools where selection is based purely on non-academic ability, examples include specialist music schools/ ballet schools/drama etc. Places at these schools are frequently funded by generous scholarships/bursaries from wealthy benefactors which enables children to attend irrespective of their financial background.

If you assume that these bursaries come from a trust fund set up many years ago, it’s the return on their investments that fund the places each year. Add VAT and you are reducing down how many pupils can be funded by 20%. The trust fund isn’t a magic money tree to generate the additional 20% needed.

Many families send their children to these schools by applying for grants/local business support. They aren’t in the “wealthy” bracket that some posters seem to think all private school parents are.

Another category is sportsmen /women competing at a high level. Many of these attend boarding school for access to facilities, more flexibility around training requirements etc. Our local state school refused a pupil time off to attend a weekly training session as it would impact on their attendance figures. She had no option to switch to private, partially funded by sports grants, in order to carry on her training (national level).

I’m against this policy, and have never been involved in private education. However, if it is going to be implemented I would like to think that schools/pupils of this nature are excluded so talented children, whatever their background, are able to attend. Increasing the fees further will increase the class divide for those who can afford to go, thereby increasing inequality and limiting options for those from lower income families.

"I won't bet on Starmer staying till the end on next parliament, they can replace him with Rayner and then hello USSR."

Oh Jesus, this isn't even worth replying to.

I expect tax raises on inheritance tax to be very slight and have a small increase in revenue generation, even as it is most estates don't pay it, this might incresae by a few %.

CGT? Well there are multiple arguments about that in each direction, but it seems unfair to many in the country that those who are taxed directly on their labour pay a higher rate.

Pensions? Well, most teachers now won't be able to claim their teacher's pension till normal retirement age, which is 67. I don't think they'll change much to pensions to be honest.

@Wetellyourstory - yes thank you. All specialist music, ballet, drama and sports schools should of course be excluded as well.

I think the difficulty comes with schools like Millfield which are both a well known private school but also a specialist sports school for some kids. So I think it may in some cases have to be treated on a case by case basis. But obviously. Purcell/Chetham/Royal Ballet School must absolutely be excluded full stop. Just like state boarding schools - that one they have already acknowledged.

If you were an economist, like me, you'd know about permanent income. Even the IFS nonsense paper accepted that savings are just part of lifetime income.

"Using the data, the top 10% of households, but with far more in the top 5%. The proportion of children who are educated privately outside of this is close to 0 in every other income decile."

That's simply wrong. But I think we've established economics isn't your forte.

can someone please explain why a child who is particularly talented at dance or sport should be exempt, but one who has academic talents shouldn’t?

But permanent income would take into account paying higher costs during school years no? If people are consumption smoothing, they will build up savings prior to and then use this to allow them to consume at a similar level once students are at school.

In the same way, people will be able to then use their incomes to prepare for retirement so that they will have relatively the same living standard throughout. Most privately educating parents make their decisions on whether to send their children there based on the idea of what their future total incomes are going to be no?

@MrChips

That's the data from the UCL study.

The proportion of children in privately educated in each income decile is close to 0, apart from the top income decile, where it only rises above 5% once the 95th percentile of income is reached.

Shame that you keep trying to attack me, my economics is just fine, and I'm well paid for it :)

By the same token, every parent who chose private school could and can choose to avail themselves of the state option. Including those whose DC have SEN and would struggle in the state sector. Including those whose only state alternatives have very poor results. Including those who simply prefer an independent school environment for their DC.

They just don't like that choice and what they believe the outcomes of that choice would be for their DC.

And parents who can currently afford private school tuition will have other choices that might fall in between private school and their current state alternatives. They might be able to pay for home schooling, or heavy tutoring, or to move to the catchment areas of better state alternatives.

But, since they've already made the choice of private school, it's pretty much a given that they don't prefer those options either.

For parents who have chosen private school, the imposition of VAT will make their options worse, their choices more difficult. But let's not confuse a lack of preferred choices with a lack of choice.

Wierd, previously posters have argued that nobody saving (over years) for private education would have factored in both the recent increases in private fees and an extra 20% in tax. You suggested PE was all funded from (massive) income anyway, so not an argument 🤷‍♀️

"Overall this policy does not impact that many people." I agree, it will very severely harm a small number of people and have at best a trivial benefit to others; more likely it will harm the public finances and cause a small amount of widely-spread harm to everyone. So why do the people who aren't significantly affected care about it so much, to keep defending it as you have? "This policy isn't a big deal to me either way, so you should accept the significant damage it does to you?"

Your acceptance, or others rejoicing, about the severe harm to others is a tragic sign of where this country has gone. I could live with a sensible debate about improving state schools by, like Finland, sharing the cost among all higher earners not just those saving the country £8-12k per child. Your comment makes me wish I'd left this country years ago and taken my lifetime 7-figure tax contributions elsewhere.

Other families' challenges are completely irrelevant to this debate. Labour have successfully persuaded you that it's because A is rich, that B is poor, and that making A worse off somehow helps B. We used to know and agree this was deranged. How did we (you) lose the plot so badly?

"let’s face it despite all the posts here saying how we should be grateful you are saving us so much money you are not sending your kids to a private school as a favour to us all you are doing it because you know they will get a better education and have better life chances in a private school."

So what? "I don't want you to do me a favour unless it hurts you." Doesn't seem like a very sensible way to organise our affairs.

Shame that you keep trying to attack me, my economics is just fine, and I'm well paid for it :)

Im glad you’re well paid for it - it can’t be a very onerous job as you seem to have plenty of time on your hands to post on here.

@Barbadossunset I know right, it is amazing.

Same as all these other high earners and business people who work such long hours but can post here too.

@Runor - I can answer that one easily. Because they will want to save face and need some red meat and nobody is going to feel sorry for the academic scholars at Westminster School whose parents are bankers.
So it is a cliche, but damage control has to come first and SEN children etc and the children of doctors etc have to take priority or we are all screwed. But if the child has ASD then they would be covered. And if they are on a full academic bursary then in any event, no VAT would be payable (although if it is funded from the endowment or externally I am not sure so that is a valid point). Children who are truly gifted should also be excluded but I do not know how to define that and there are no specialist gifted schools except for places like Westminster. And like I explained, that will not wash.

Some of us in the state sector think this fight between private schools and politicians is good, because they will be so enthralled in it that they won’t go and reinvent the whole curriculum and GCSEs all over again thereby adding to the workload of teachers who are already on their knees and we can barely get any to work in our state schools. So the last thing we need is politicians meddling again who have 0 clue about how things actually work.

So you just need to learn to fight the game in the way they want to play it and play into all the public cliches and the narrative this country has taken. Because at the end of the day, we all do actually want what is best for our country and the children at large. And we as parents (whatever sector) need to work together to protect children because frankly our politicians have abysmally failed the lot of them!

"because they will be so enthralled in it that they won’t go and reinvent the whole curriculum and GCSEs all over again"

Oh, the way the wind is blowing on that, I have bad news there.

Anecdotally - two of my colleagues, both with two kids at GCSE and A-levels each, both working four days a week, both have SAH partners with no health issues (we share health struggles in the team very widely), both in their late 40s.

Both cry daily about how bad school provision is but not trying to do anything about it, pay for tutoring or God forbid go private. Never occurs to them to up hours or for partners to take some jobs to support kids.

I just don’t understand this mindset. I agree that not everyone can afford private school, in the same way that not everyone can afford to buy a house or have days out. So many people on here say “but we have to put up with the state sector because we have no choice”. The fact is that many do have a choice. They just don’t want to accept that they do.

I've been thinking the same thing! It's not half term. Is he between jobs, or something?

The proportion of children in privately educated in each income decile is close to 0,

No it's not. That's the sort of thing people say who are bad at statistics.

It's between 2 and 3% in the 2nd and 3rd deciles, relative to a baseline of 6.5% That's a small number of children, but it's a significant proportion of private school children. So the line you're peddling "private school is only for the top few % is complete rubbish.

Even in the top 1% (from your data) half are at state school. That should give you a good clue. When people talk about the "richest 6.5%" it's plain wrong.

@MyNameIsFine

Ahh another nasty remark, not between jobs, funnily enough I haven't seen you questioning all these other high income posters why they are able to post a lot.

"because they will be so enthralled in it that they won’t go and reinvent the whole curriculum and GCSEs all over again"

Oh, the way the wind is blowing on that, I have bad news there.

Of course you do, because they want to make this about themselves rather than school children and teachers.

And who benefits every time they reinvent the wheel - kids in private schools because they have enough cash to figure out what to do quickly to play the game properly on behalf of their pupils.

Except, that with this VAT stuff, are private schools going to keep going on exams dictated by politicians? I am not sure.

"No it's not. That's the sort of thing people say who are bad at statistic"

That's almost exactly what the report says?

And yes half of the top 1% have their students in private school, wouldn't this indicate that children from this demographic are massively over represented in private schools, even if its 2-3% of students in the 2nd and 3rd?

"Of course you do, because they want to make this about themselves rather than school children and teachers."

Who wants to make it about themselves rather than schools or teachers? Haven't labour pledged to use this to fund schools and teachers?

“Who wants to make it about themselves rather than schools or teachers? Haven't labour pledged to use this to fund schools and teachers?”

The 1.5 billion subsidy from private school parents pie in the sky (aka the feeding of the 5000) will not stretch as far as whole new resources and training in state schools to completely reinvent the curriculum yet again.

Do a consultation with academy heads and you can all keep each other busy pontificating over how to educate us masses. But in the short term, Labour should stay away from creating even more work for state school teachers! Is that not really obvious?