Labour’s private school tax raid ‘likely illegal’

[Zizzagaaaaaww]

Thought some may like to read this article

archive.ph/i1XD3

Sir Keir Starmer’s planned VAT raid on private schools is likely to breach human rights law, The Telegraph can reveal.
The Labour leader risks falling foul of European Court of Human Rights (ECHR) law <a class="break-all" href="https://archive.ph/o/i1XD3/www.telegraph.co.uk/money/tax/labour-private-school-tax-moronic-policy/" rel="nofollow" target="_blank">over his party’s flagship policy, one of Britain’s top constitutional and human rights lawyers has warned.
Lord Pannick, who has taken on some of the UK’s most high-profile court cases, backed legal advice warning that making private schools subject to VAT was likely to breach ECHR law.
He told The Telegraph: “It would be strongly arguable that for a new government to impose VAT on independent schools would breach the right to education.

“That is because all other educational services will remain exempt from VAT and the charging of VAT on independent schools alone is designed to impede private education, and will have that effect.”

The KC and crossbench peer said that the Labour policy risked breaching two articles in the ECHR which protect the right to education.
He referred to legal advice written in response to Labour policies as far back as the early 1980s, when the country’s most senior lawyers warned that plans to end tax exemptions for private schools or abolish the institutions altogether would likely breach international human rights law to which Britain is signed up.
Previous leaders of the party have floated the idea of taxing private schools as part of plans to integrate them into the state sector. Under former party leader Michael Foot, the Labour manifesto of 1983 pledged to “charge VAT on the fees paid to [private] schools”.
The policy to abolish the schools was eventually shot down by senior lawyers, who argued it could be at odds with the ECHR and spoke specifically about the risk of imposing VAT.
While Sir Keir has ruled out abolishing private schools, he plans to force the institutions to pay business rates and 20pc VAT on tuition fees.
In an unearthed legal opinion from 1987, seen by The Telegraph, the late Lord Lester and Lord Pannick, prominent human rights lawyers, concluded a government “could not lawfully prohibit fee-paying, independent education or remove the benefits of charitable status or impose VAT in respect of such education” while a member of the court.
A foreword to the opinion written in 1991 by Lord Scarman, who served as a Law Lord in the precursor to the Supreme Court, said it would “encourage a challenge which could be mounted by taking the argument to the [ECHR]… if ever a government should seek to abolish or discriminate against [private schools]”.
The opinion was jointly written by Lord Lester and Lord Pannick as advice for the Independent Schools Council (ISC) and later published in its journal. Lord Pannick confirmed his belief that the argument still stands today.

People have strange attitudes to the things they want the state to have a monopoly on and the things they don't. Education - loads of people seem to think it's totally unacceptable for some people to pay for a better school than others. Housing - totally acceptable that some people live in state provided housing but others pay lots of money to live in much nicer houses. Healthcare - a bit of a mix - the NHS is still the dream, but nobody really judges others that much if they pay for a private procedure. Childcare - everyone gets a bit for free but nobody bats an eyelid that some people pay for more (or for a more expensive nursery). Social care - again, nobody seems to judge at all if an elderly person pays for a private care home (and I don't see Labour calling for VAT on those).

Why the massive differences in opinion?

Nah. I'm fine thanks op.

Why the massive differences in opinion

I think there are accepted 'right-thinking' opinions, which are based on historic political ideas and campaigns, and people can't see past that to actually think through the consequences. It's tribal.

The areas where these (completely equivalent) things are acceptable are those where there has been no historic policy and rhetoric.

@timetobegin there are better ways to fund this than expecting a handful of parents to pay through the nose, turning upside down the lives of some. I don't think it's as much as £200 anyway, more like £120-£150. The same revenue could be raised by asking everyone in the country to contribute £9 annually. Instead, the rhetoric has been stirred up lay the bill at the foot of a few who are not necessarily the most able to pay, simply because of the choice they have made. It's easy to see why the policy comes across as spiteful when you look at it that way.

Makes you wonder if it has to do with controlling the minds of the next generation, or perhaps the relative strength of the different unions.

Spite is an odd word to use about a change in VAT rules. I don’t think anyone feels any malice towards children in private schools. Have you looked at the books? Do your school/s make a profit? Is that profit more than 20%?

For the 100th time on these threads - schools don't make a profit (not unless they're actually companies). They don't have shareholders. If they make a surplus (and they often make very very little surplus), this is reinvested in education.

(And to suggest that there's been no malice or glee on this topic is just wilfully selective reading.)

In some ways however the government here is formalising something that has been going on for ages in some of the other sectors that you mention.

In both nurseries and nursing homes costs are passed on to private users of the service to make up for inadequate government funding.

Spite is an excellent words to use. And jealousy.
And what will be the outcome?
More money or less money to the state system? Might easily be less. All those charities - or should we say public schools - give now. True it is to their local children although some like Eton are more widespread. Will they stop being charities? Will the parental “fee donations” stop or will that portion of their fee be VAT free?
And presumably more unschooled children - or adhoc schooled. If you left the state system because it did not work for your child you won’t return. If private school fees are too high then what? An unregulated school? Home tutor? Groups in community halls? It happens now - so more of that? Not good.

Arf at, it’s not profit it’s “surplus”. Ghastly. However many times you try it.

what is it you think people who disagree with you are jealous of @Rabbit62? Why do you think people won’t be able to find a state school to go to if they left one previously? People move schools all the time.

As a homeschooling parent I already pay VAT on all educational activities.

We have been considering moving back to the UK next year after many years overseas for secondary. We were looking at private schools, but now very concerned. Will my child walk down the street and be jeered at for wearing a private school uniform, will the school remain viable? Not looking at the big fancy schools either. Just small and cozy (at least that was the idea).

It sounds like Labour have sewn a division that wasn't necessarily there or so "considered" by most people before.

This policy seems so ill through through. Why not up taxes a little more to pay for better state education all round?

It's making me very nervous as to whether the upheaval is worth it. Our children are in international schools - while not perfect they are happy - at least nobody here is making us feel crappy or vulnerable about the choice of schooling, and whacking VAT on education would be unseemly here. In fact, the government even tops up the school's budget here! Nobody quibbles about it.

@lavieenwhisperingangel I don’t think jeering at school uniforms is particularly common.

Of course, I would very much hope not, but it's the highlighted difference of choice of schooling which is evident in a school uniform.

As I say, the worry is this is sewing a division which wasn't so widely considered before.

Yes, I've checked the books. Of the two schools one carries a surplus of one term's fees and the other enough to pay the VAT on two terms - that's it. Not enough to not have to pass the cost onto parents. No one should be having to re-mortgage to pay tax, but that is what we may have to consider. Malice towards children? Perhaps not. Cold indifference? Absolutely. As I say, the same revenue could be raised by everyone paying £9 a year, so why go for the high risk option which really screws a minority of it's not about judging their choices?

In another group I'm part of this is absolutely already happening. There is a huge amount of hostility.

Unfortunately I think it's more common than you might think. Mine have definitely experienced it. They have been jeered at, sworn at, called "snobs" and "posh" whilst walking down the street, just because of the uniform they were wearing, by children attending a local state school. This has got worse since the Labour Party have been going on about this policy, stirring up hatred and spite towards children whose parents have chosen the private sector. You only have to read these threads to see some of the hatred aimed at innocent children.

As far as I know children in private schools face reverse snobbery and the insults are accepted and not challenged. The children in private schools carry the burden of it once at university too. Things like private school twats and insults like that just because they went to private school. I have assumed this was always like this but may be is a new thing.
We decided to move out of the U.K. for the next academic year and our kids would look to universities abroad. I must said I never heard of this happening anywhere else but the Labour government using this division to come to power was the clear signal of how this country has really gone. In fact the only country to add vat tax to private education in the world.

@timetobegin Just realised what I am referring to is reserves not surplus. The surplus will be far less as the reserves are topped up over time not carrying that amount extra every year. Why are you so sure that schools are making 'profits'? Have you actually looked into it in any meaningful way, or have you just been told that by the media?

A "huge appetite"? Only around 1 in 3 voters voted for the Labour Party, so it's hardly "huge".

@Another76543

"Unfortunately I think it's more common than you might think. Mine have definitely experienced it. They have been jeered at, sworn at, called "snobs" and "posh" whilst walking down the street, just because of the uniform they were wearing, by children attending a local state school. This has got worse since the Labour Party have been going on about this policy, stirring up hatred and spite towards children whose parents have chosen the private sector. You only have to read these threads to see some of the hatred aimed at innocent children."

I am really sorry to hear this, how awful for your children to experience this. I'm afraid it doesn't surprise me much either and this is what I was referring to, the fact it will increase due to this sewing further of division.

So there is no VAT on children's clothes but if your kid has big feet they have to buy adult shoes where there is VAT. Same with clothes. If you are a kid and you buy shoes shouldn't the fact that you are a kid deterrent the taxable status of the shoes. It annoys me every year.....

Can you please explain how the policy is undemocratic?

In real life at University, young adults don't care which type of school the people they meet went to. If I were to ask my children they would not have a clue who of their friends went to private school and who did not. If you are moving abroad because of this, I would think again.

"Arf at, it’s not profit it’s “surplus”. Ghastly. However many times you try it."

I'm not sure why it's ghastly to point out a basic fact (though it's true that supporters of this policy don't seem to like facts very much - it really is Brexit all over again. Politicians playing on prejudice and using meaningless soundbites to get through a financially illiterate policy.)

But anyway, the point is that private schools aren't making a big surplus. For many it's tiny, and actually far less than a business would consider acceptable as a basic protection against unforeseen events like Covid or the roof falling off. Where schools have big reserves, these are often ring fenced for things like bursaries.

I think what people who don't use private schools don't understand is how much they're like - you know - schools. Sure, they might have nice buildings and great facilities (often donated or inherited rather than paid for from fees - why do you think they have all those donor plaques up on the walls?), but essentially they are still just schools. They employ teachers, they teach children.

Like state schools, the vast majority of their expenditure is on staffing. When Labour sneeringly call on private schools to just 'cut their cloth' if they're worried about VAT, then cutting staff will be one of the main ways to do that: to reduce teachers in non core subjects, to cut the number of decorators or gardeners who look after those big grounds, or catering staff, or sport and music coaches. Those are all stable jobs in the local community that are currently funded by wealthy parents. A Labour party calling for redundancies - great look.

The other way for schools to 'cut their cloth' is to start acting more like businesses (you know, the thing that people already criticise them for). So, those three afternoons a week that the local primary schools come in and use your swimming pool or your theatre or whatever for free? You stop doing that and hire it out commercially instead. The hours of staff time spent supporting local sponsored schools or charities? Can't afford that any more. Some schools don't do much of this, but some do a lot. Parents who are currently supportive of some of their fees being spent on this kind of stuff will become a lot less happy about it if it's a choice between that and their fees going up 20%.

I think what you'll see is more vulnerable schools going to the wall (with a subsequent impact on local state education and jobs), while the big schools do a combination of cutting some staff, making themselves much more commercial, and becoming affordable to fewer families. I'm not sure who wins from this.