Whitehall “braced for private schools collapse” 6

[ICouldBeVioletSky]

Continuation of previous threads to discuss VAT on independent school fees.

Oh, to apply cgt fairly on residential property, you'd also need to allow for value added through building work on the property during that time period (materials bought - with VAT applied - and workers paid including income tax and NI).

VAT, tax and NI paid by some people, anyway. Off-books building work has become normalised.

Actually, offsetting the cost of on-books building work against future CGT would reduce the incentive for tax avoidance in residential building work - now there's a neat solution.

If you want to control house price inflation for the greater good, far better to limit rich foreign people purchasing UK property for speculative gain.
The argument even applies to the top tier private schools as well. Why limit access to good education for your own, especially if most of them actually paid tons of tax here? Makes zero sense. It is exactly what is leading to the outflow of self made talent (minus inherited wealth).

This policy:

• Reduces educational choices for parents;
• Places a greater number of children with SEND or other vulnerabilities at an increased disadvantage in relation to other children that do not have these difficulties;
• Disproportionately affects children in areas with poorer state school offerings;
• Increases the burden on the state sector in a way that is not uniform across the country and may not in some areas be supportable;
• Decreases the number of bursaries available at private schools;
• Decreases the likelihood that private schools will share facilities with state schools on a charitable basis (i.e. subsidised or free) basis;
• Increases competition for places at selective or high performing state schools, reducing the chances of an excellent education for children from poorer backgrounds, especially where catchment areas that can be bought into by wealthier parents are a consideration;
• Has so far failed entirely to produce the promised dividend for the state sector that would offset some of these bad effects.

Can you explain, in light of the above, exactly how it is not an attack on education, please?

I don’t think the state is paying for any equestrian facilities. The basic education is paid for by the state as per other state schools, the boarding and extras are paid for by the parents and the “charitable foundation” of the school (or in normal state schools, by PTA fundraising/parental donations). Maybe Labour was secretly hoping forcing more parents into the state sector would open a few more purses to help prop up crumbling state schools (thereby increasing inequality between state schools, as some will have willing, wealthy parents and others won’t). The harsh reality is, state funding of all state schools is grossly inadequate and will lead to a rapid increase in redundancies being made in the state sector, because government is not fully funding its pay rises, national insurance increases and other on-costs, resulting in schools having to shed staff. SEN children are, of course, being thrown under the bus (but simultaneously bankrupting Local Authorities and forcing mainstream schools into deficit, due to lack of adequate funding).

@strawberrybubblegum ,

It is a separate issue to this thread but I totally agree re stamp duty and CGT. Stamp duty is a tax on mobility and a tax on divorce (which I really resented at the time). And CGT should be index linked.

But there does seem to be a resentment on here that the wealthy pay taxes and that goes to help the poor.

There are plenty of issues with the current tax system but that seems abundantly fair to me, and people forget how much government policy has taken from the poor and donated to the rich (bank bailout, QE, Covid payments).

Agree with all this. Except, i don’t think Labour was ‘secretly’ hoping that middle class parents displaced from the private sector would step up and sort out the state schools — Bridget Phillipson explicitly said she expected this to happen, I believe. Which is absolutely nuts, honestly.

people forget how much government policy has taken from the poor and donated to the rich (bank bailout, QE, Covid payments)

How exactly are any of those about taking from the poor and giving to the rich?

All those schemes came from state funding, which is definitely not paid for by 'the poor', who are very unlikely to even be net contributors - ie paying in as much as they personally get out.

The bank bailouts have been almost entirely repaid. Providing a loan to stop our economy from tanking is exactly what the government should do - for everyone's benefit. Given that 10% of all government spending is on working age social security, letting the UK economy tank would have impacted 'the poor' quite a lot, don't you think?

If former private school parents eventually flock together in the same state schools (as they will), they can develop more VAT-free oases of wealth and privilege within the state sector. This has been made easier by the academisation of most schools - no inconvenient, opinionated, potentially left-wing Local Authorities to interfere unduly.

It is true that Labour are shafting the entire education sector, not just private schools. Universities as well, as state schools and all private schools. The worst off are SEND kids. There appears no plan for them.

Well £2.7k per term flexi-boarding fees certainly doesn't cover the cost of 260 acres of prime SE real estate, let alone the Equestrian Centre and swimming pools built in those grounds. The students may pay to ride the horses, but that doesn't cover that whole cost. So who is paying for that, if not the state?

Wonder what business rates they would be paying on all that land, if they were treated the same way as a private school? That opportunity cost is also part of what the state is paying for those few lucky state-educated children.

Yes it’s depressing to see

It depends what you really mean by net contributor. It’s actually quite an offensive term, as it focuses solely on a man-made invention (money) rather than usefulness to society as a whole. It’s always been a bit of a cheek not to think of binmen, carers, cleaners and myriad other very low paid people as net contributors, given the shit this country would quite literally be swimming in without the armies of inadequately paid people whose jobs enable others to go out and earn enough money to pay tax. The low pay of the majority is subsidising the minority who consider their roles to be more important “because they are net contributors.”

As already stated, there is a Charitable Foundation associated with the school…

@Walkaround - all you say is true but we are encouraging our 4 DC to go to other countries where the middle classes get a better deal. They only have their talent no significant wealth so that will be better for them.

Blame Gordon Brown for that, with his Working Tax Credits.

Money works quite well as a way of indicating the usefulness of what someone does - since it translates to how much of their own work someone is willing to exchange for it.

Hmm... so much like most private schools then.

Remind me again why they should get such different fiscal treatment from the government?

@Araminta1003 - it’s a shame you are encouraging your children to go to other countries, but I do agree the middle classes get a comparatively raw deal in the UK. Basically, there soon won’t be a middle class, just the super-wealthy and everyone else with their begging bowls out, asking for relief, because the elite will be the only “net contributors” left.

I don’t need to remind you of anything, given that I haven’t said they should get different fiscal treatment. I’m just correcting your factual errors. 😉

Labour seem keen to get to that point through policies.

Well, that’s a load of rubbish, tbh. Years of women pointing out the sexism in pay discrepancies is more than enough evidence that money works quite well as a means of use and abuse of power, not as an objective way of sorting the wheat from the chaff.

@RoseAndGeranium ,

‘Agree with all this. Except, i don’t think Labour was ‘secretly’ hoping that middle class parents displaced from the private sector would step up and sort out the state schools — Bridget Phillipson explicitly said she expected this to happen, I believe. Which is absolutely nuts, honestly.’

Bizarrely, private schools actually are massive benefactors of philanthropy, which does take away from middle classes donating to the state sector, who really need it.

Again, anecdotal, and yes a school in central London and privileged, but they had a black dinner for a new building and raised a 7 figure (!) sum from parents. When they appealed for more deserving causes, they raised at most about £10k.

Of course people can give their own money to whom they choose, but the private school sector is a bit of a perverse choice for philanthropy.

OK, that's a fair point.

It's correlated though.

Rather loosely, imvho. The problem is, we may no longer officially have slaves or servants, but a huge underbelly of people have to be paid less than they are actually worth, because their work is essential to give others the free time to focus on something else. The major flaw in the system is, you can be a brilliant carer or cleaner, for example, and it is undeniable that people can tell the difference between those who are genuinely good at their job and those who are inadequate, lazy or actively abusive, but you will never be fairly rewarded for that. The end result can be, important jobs not being done very well, because the people doing them recognise that they are inadequately remunerated and respected, and working harder will just tire them out quicker and not bring them any greater financial reward or respect. That’s money very clearly not working, imvho, and we all suffer massively as a society when hygiene in public spaces is poor and care services are inadequate.

What diminishes a NNW carer isn't that a junior doctors earns 2-3 times more than them per hour: after 5 years of hard training (and with the personal ability to do it) for work which evidently is higher value.

It's that the state values their work so little that they hand out almost the same amount to someone who isn't working at all. Especially if they have children (which is true for most people for a significant, expensive chunk of their lives).

10% of our entire government spending goes on working age benefits, yet there is no realistic safety net for anyone who has managed to establish themselves at all. Unlike other - supposedly more left-wing (!) - countries, where social security is related to how much you've previously contributed. Which gives a genuine safety net to all, but without creating a subculture of dependency which devalues genuinely valuable work (including binmen, carers, cleaners etc)

As for a brilliant carer or cleaner not being rewarded, that's just an argument for a smaller state.

I can assure you that when individuals are hiring a cleaner or carer, they absolutely do pay more for a better worker - or simply don't hire the worse one.