Labour’s private school tax raid ‘likely illegal’

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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.

Would you be able to share those figures you refer to please? There is lots of tutoring in the private sector. Aside from the tutoring to get a place in selective independent schools, there are many DC who are tutored right through their education. It is also true that a large proportion of DC in the state sector have parents who could never afford tutoring.

I am fully apprised and aware that zero further research has been conducted.

https://www.suttontrust.com/wp-content/uploads/2023/03/Tutoring-The-New-Landscape.pdf
This is from March 2023.
But have seen other reports.
Also see the Guardian 8 Sept 2016 says 40% of London children have a tutor at some time.
But a bit more digging would show you. My understanding is that in London - richer place - almost double the rest of the country. But I imagine more likely in all richer places.
I have also seen info that shows greater percentage of ethnic minorities use tutors - but that might simply be because that reflects the London population. Once saw something saying about 80%.
And that is all before you see the house prices around good schools.
i imagine some house prices will rise by the equivalence of the 20% VAT.
Yup - money buys better educational success.

I've changed my mind on this. I'm pleased VAT will be added as it will make it more elite and hopefully stop busseires and state schools using the facilities at my DC's school.
With the little VAT that will be rasied I'm sure councils up and down the UK will be able stop people leaving the teaching profession.

On the after school and holiday clubs it did strike me as a bit silly and Labour wanting things to be awful - provide nothing useful and just mind children in a room and that is no VAT. Actually help them in there ie be a good after school or summer camp and VAT. it is rewarding that which is most useless but VAT has always had difficult edges to it - what is a cake, what is a biscuit etc.

Anyway I hope any legal challenge to the plans succeeds.

But this isn't even an 'is it a cake or a biscuit question'. It's more like 'You have to pay VAT on baby clothes if you buy them from GAP, but not from Primark'.

The irony of you not understanding that this will create even more of a rich poor divide which will impact state school children- the middle class will in 3years plus move into all the nice areas with good schools- driving house prices up and hence the poorer families will be priced out. Grammar schools will become even more competitive with the middle class parents tutoring to get in and moving house to be in catchment- just look at Buckinghamshire!

Straight away class sizes will get bigger and there won’t be enough teachers- already we have a 2000plus shortage, how are they going to magic 6500? And if more SEN children move across- this will take even more resources and teacher time.

If private schools close- catering, cleaners, gardeners, teachers, TAs, admin and support staff will all lose jobs. Local food suppliers will lose customers. Lose lose scenarios.

I will just suck it up- but make sure that I don’t donate to charity and ensure that I badger the school to get rid of any new bursaries and reduce current ones, and make sure we charge full rates for any state schools or other community groups using our facilities- I will no longer pay for others like we have done previously. I will also move my child to state for A levels and then use the extra money to tutor. Taking places for the better schools that otherwise would go to current state school pupils.

Bridget Pholipson won’t be able to play hockey on the pitches she does now.

See how it now impacts everyone??!

There are already many affluent children already in state schools with parents of equal if not greater means than those with children in private school. It seems a bit over confident to believe that they can all breeze in and take the expensive houses and the best school places. Neither would I assume that they will be able to take grammar school places from bright state school kids. State school parents can tutor too, you know. It is not a given that state school class sizes will get bigger. Schools can turn children away. A more likely scenario is that places are offered in schools that are less sought after as they will have spaces. There is not too much movement in state schools within key stages so it could take longer than three years to get a place in a good school if not at a natural transition point, no matter how much cash one is waving around.

It will only be a minority of private schools that will close. The ones that were struggling anyway. I think there is a lot of hyperbole around the numbers of children that will be moved. The impact will not be huge and the shift will be phased over quite a long period as many parents will hang in to tie in the move with a strategic point in their children's education.

So I really don't believe that it impacts everyone as much as suggested.

You probably don't believe it because you aren't in the Indy sector. 10 kids in DDs year group gave their 1 term notice before Summer and that was based on Sept 25 VAT. Now Labour have moved the goal posts to Jan 25, trust me, there are 1000s of parents frantically trying to get hold of bursars and governors to submit notices. As a member of ENT I've seen the emails and heard the stories.
Enrolments for Sept 24 are down 20% on historical numbers at our school and the figures across the rest of the country will be not far off that. So it isn't just the kids who will leave, it is the ones who will never start in the first place.

Yes exactly lots of wealthy parents like Keir and his cabinet- who could well afford to contribute to their schools, instead of just 7% of pupils to fund 93%!

I was suggesting that in 3 years, people will see the real impact, as that is when people in primary or nursery will have time to move to catchment areas or prepare for grammar schools. People currently in key years are more likely to ride it out and pay the VAT. Had my kids been 3 years younger I would now look to move to a grammar school area and tutor my kids to get in. This is what will happen now, and we will see the impact now but more so in the years to come.

How is it even ok to be ok with children having to move mid year because of a very crass policy which is clear by the chancellor and education secretary don’t care about any of those 40,000 children.

This is such a devisive policy which is just pitting people against each other. And for at best case a 1% increase in schools budget. 1/3 teacher per school.

“A more likely scenario is that places are offered in schools that are less sought after as they will have spaces.“

If you have eg 3 children, you just need to get one in at a transition stage and then appeal. An appeal panel will have to balance the traumatised displaced child against the detriment of the school having to admit one extra pupil. It’s force majeure. And it is the law.

In which case I'm not sure why some of the vitriol and anger isn't directed towards the wealthy families using state education and taking a benefit which they could afford not to use or to contribute more to. If a wealthy family were taking any other benefit there would be uproar. Yet for some reason the anger is aimed at the people who aren't using a state funded benefit which they are already subsidising.

Private school parents will be able to appeal to some of the best state schools for key subjects like Latin and German if the child has started down that route and can eg prove they are going to take if for GCSEs. So please, let’s stop being so naive about who is going to be getting the best state school places. It has already started where we live.

Yes, only people who really can't afford it will move mid year. Others will move at a more natural transition point. But the biggest impact will be the numbers who don't apply in the first place. Families with young children might decide to have that third child after all, now they've got all this spare cash they were saving up for independent. I know I would, if I was in their shoes.

Three families in my DC class have already given notices and one more is leaving by January. That's 1/5 of the class. I don't know about the other class but expect the same figures. It's one of the top schools in league tables, people used to be very reluctant to leave.

Those who were not going to sit for grammars have now registered en masse. There's going to be a bloodbath at 11+ from this September onwards. Private school pupils usually work a couple of years ahead plus they are tutored before 11+ just in case. Not sure if children from less affluent backgrounds are going to benefit from increased competition.

DH and I are from Buckinghamshire but could never have got anywhere near to affording a house there. Instead we had to move hundreds of miles away to an area with not great schools, where we could afford to buy. We have had to scrape the money together (re-mortgage basically) to send my very bright DC to a private school for their last few years after they were badly bullied at their state secondary and no other places were available locally. I’m finding it ironic that we are being accused of being over rich/overprivileged by grammar school parents, who feel morally superior for sending their DC to state school. My DC would have loved to go to the top grammar school that DH went to but financially it’s completely out of our reach.

I’m a Labour voter who disagrees with this policy. it’s not going to do what is being claimed in terms or benefits and the dis benefits are hugez .I think it’s really awful that this have been announced for Jan start. I think it’s insulting that there is no detail about which kids if any will be exempt on the basis of SEN. At least give a full school year for families to try ti come up with a different plan for their kids, move to a different area. Find a better paying job or take on another job. whatever they need to do. Five months to prepare is absolute bullshit.

Well said.

@LondonbasedLou I’m used to the rebate system too, a fair few countries have it, Labour are going in the other direction

But don't your family in Italy realise that we in Britain have a far superior state education to other European countries? It's called the 'school of hard knocks'. I went to one and turned out great. With such a great free option on offer it becomes difficult to justify giving a tax break to these entirely unnecessary private schools dotted about the place. Waldorf Steiner in particular I just can't understand. If parents are daft enough to pay to have their children learn wool art then it's only right that they pay 20% tax to fund real schools. As for prancing about in ballet costumes, fiddling about with violins and fancy science equipment - what a load of nonsense. Clearly these are luxury items. If I pay VAT on my Mars Bar, you can pay VAT on your kid's pointless art lessons. Let other countries waste their time and energy on the arts and on pointless discoveries and innovations. If you must waste your time with such nonsense, expect to pay a tax so us real Britons can get on with the real business of education, which is ensuring that no more schools exist that can turn out the likes of Boris Jonson. We might also teach a little maths and smattering of English along the way, but everybody knows that education has absolutely nothing to do with actually knowing stuff or being good at the job you end up doing, and everything to do with creating an equal society where nobody thinks they're better than anybody else and nobody ever has the chance to be.

State school is not a benefit. It is the norm. 93% of UK children are in state education. If a high income family is taking a state school place, why should that be contentious? If we want to consider the economics, the high income family will be paying a lot more income tax than most in the country so they will be contributing significantly to the public purse. Of course there are private school parents who are also paying a lot of taxes and they also have the choice to use the state system but choose not to. Let's not kid ourselves that the reasons behind this are to free up places in state schools. It is almost always because they want something better than the state provision on offer or they need a provision catering to their child's specific needs in the case of SEN. I do believe that there should be robust exemption for SEN where the state sector cannot accommodate the needs of the child. To apply VAT would be very unfair in these situations. I also think the timing is off. I think September 2025 had been mooted and they should have stuck with that date.

Regardless of the intention of a parent using a private school, the effect of it is that they will be paying even more tax to apparently fund a system used by an equally wealthy parent using a state school who is busy loading it into their pension and paying no tax. It makes abdolutely no sense. When we move to grammar at the natural break point I will be using a state school place and costing the state even more whilst paying less than ever.

"It is almost always because they want something better than the state provision on offer"

What is so wrong with that? If they obtain a firm grasp of the curriculum and go on to discover a cure for cancer, isn't that a public good? Sure, the State sector should be turning out students who discover a cure for cancer, but if parents feel like they're not getting the standard of education they're after how does that hurt you? It doesn't mean you get a lesser education, just because they want something more. Or maybe they want the extra sports and green space. So their child ends up living a more fit and healthy lifestyle and saving the NHS money. How is that not good for all? Sure, there should be better PE provision at State, but they're not going to get it because a high earner put their child in the class. How does anybody else suffer because the high earner, who doesn't have the time to take their kids to sports at the weekend, decides to assuage their guilt by putting them into the private sector? What are they taking away from you? If you actually have time for your DC they'll probably do better.

Don't worry, pensions will be raided too. It's just a matter of time.