Private school : VAT : labour

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I have recently come across this petition. Not sure if many of you have seen this.

https://www.change.org/p/stop-labour-from-adding-20-vat-to-private-school-fees-and-forcing-kids-to-change-schools?recruiter=false&utmsource=shareepetition&utmcampaign=psffcomboshareeinitial&utmmedium=whatsapp&utmmcontent=washarecopy376858822en-GB%3Acv451328&recruiteddbyid=44b8f4b0-d22c-11ee-82d6-61cc5900aa84&shareebanditexp=initial-37685882-en-GB

@JassyRadlett the UK doesn't have below average social mobility though
https://www.euronews.com/business/2024/04/01/wealth-inequality-where-in-europe-is-wealth-most-unfairly-distributed?fbclid=IwAR2dd3TrBem1AuBuO8K6dU92k1g7iQZfQs5ftskkgCjvU4eL4hG2RorijvQ

Absolutely nothing wrong with being angry amd envious that private school educated kids get an advantage over more able state school counterparts. The best thing for the country is a meritocracy not old boy networks.

I am not sure this petition will be particularly well received - only a tiny minority of the population as a whole use private schools and the families that do so are perceived as being a very privileged group. So kind of back of the queue in public sympathy stakes I would imagine. Quite a hard sell to your average parent in a CofL crisis.

Maybe the VAT could be directed at schools in the most deprived areas.

The 20% VAT is what we're debating. Nobody knows how many people will switch, and what the fiscal impact will be if they do. If you want £1.5bn, as many of us keep saying, there are less harmful, more predictable, and less divisive ways to raise it.

"If more children have to enter the state system- so be it!" There is no automatic right to a private education."

Well, you've sorted out your and yours in private schools and now in grammars, so screw everyone else. But evidently you're happy with your intellectual contortions, so let's move on.

If "more children" enter the state system they'll be demanding unfunded and, in many boroughs, non-existent places. And they won't be generating any VAT. As little as 5% migration (which the IFS optimistically guesses) means Labour can't fund even their £1.7bn promises so far committed. 10-15% means you generated no money at all - that's to say, you have 60-100k more children requiring education with no extra funding coming their way.

What are you going to tax to fill the gap? Because if you want this deranged policy, you need to explain where the tax revenues are REALLY going to come from.

Hello, nobody's expecting pity. Just a recognition that this policy is bad for the economy, the public finances and ultimately for state schools. Or at least some engagement with the cost/benefit analysis which nobody has even tried to do.

Like: I don't feel sorry for people who pay lots of tax, but I'm bloody glad they do and I want them to keep it up.

how very unpleasant, besides being inaccurate.

Two points:

1. where else could the money be raised from that would be better/ less divisive? 2)Why do you feel that private schools should be exempt?? What makes wealthy parents special that they should have effectively subsidised fees?

Also- when the financial crash happened in 2008 there was much talk of private schools closing, particularly in Edinburgh due to the reliance on finance sector. This didn't happen. People found the money.

As in where else could 1.5 billion be raised?

You also are assuming that the schools will pass the whole 20% increase on to parents. It is likely schools will cut costs in other ways- increase class sizes/ reduce staff numbers/ sell off assets/ generate income from assets.

private school educated kids get an advantage over more able state school counterparts

The advantage comes from being at a school with engaged pupils who want to learn, with teachers who can actually teach rather than just crowd control. It comes from being given the opportunities to find what they are best at. It’s about fulfilling their potential. Some in the state sector also get this advantage, but not enough.

It’s got nothing to do with getting an advantage over “more able” state pupils. Private school pupils still have to pass the same exams and apply to the same universities. Lots of pupils in the private system are very able and have that ability stretched and encouraged.

I say this as someone who attended state school and ended up as a graduate being offered jobs over privately educated people.

Unfortunately it’s a bit of a self-fulfilling prophecy that state school pupils are apparently at a disadvantage compared with the privately educated. If you tell children enough that they are at a disadvantage and are unlikely to succeed, they begin to believe it.

A 1% increase in VAT generally would raise about £7bn, multiples of the predicted amount raised by adding VAT on school fees. This could well be enough to improve state schools meaningfully. Why aren’t people in favour of that? I suspect it’s because people are quick to say that state education should be improved but less keen on paying for it themselves.

Extra strain on the state system is not a reason for continuing ongoing VAT breaks to some children to attend private schools and colluding in allowing preferential treatment for some.
If there does happen to be more strain on the state system the government will simply need to find solutions to this- like they do in all kinds of situations.

As with all things I suspect it depends on what you're measuring and how you decide the biggest driver of mobility (esp the earnings v wealth question) - clearly McKinsey thinks differently, looking through a Western Europe lens. Taking out the question of comparison, on a UK-only level the IFS view recently was that social mobility is declining (and is particularly grim in some regions).

But as I say, it depends on who is measuring and how they define, right?

Why should the poorest in society be penalised so that the richest don't have to pay more in private school fees!! totally ridiculous suggestion. 'I know your child is on Free School Meals but we are just going to increase VAT on everything 1%, EXCEPT private school fees because if we did that wee Hugo and Monty might have to go to state school and it would be very traumatic for them!'

It also ignores private school rolls having risen in the past few years, despite them already having introduced quite significant fee increases. So the evidence is that fee increases doesn't dampen demand.

Absolutely. Any of the parents I knew at private school will absorb the cost. Might be a few leased XC90s, Discovery and Range Rovers going back though 😱

Another anecdotally there are undoubtedly advantages dds private school peers are getting far more support and assistance from their teachers with their A levels than the state school cohort - and ours is a good state school. They are really not comparable

VAT's a much less progressive way of raising money than many other sources.

And if you are starting from the position that private education is damaging to one of your policy goals (in this case for the Labour Party that may be social mobility or a less socially stratified state education system) then it's fairly standard to signal that through the tax system.

If you wanted to raise much more than this would bring in, NI or income tax on the higher bands would be more progressive routes than VAT.

The Brits will finder it harder to absorb. There will be more Chinese and Russian students as a result.

Still, as I said before, it's not going to happen. Not in any meaningful way.

Oh, so you do accept that increasing VAT is about “penalising”?

The 20% rate of VAT tends to be on things which are discretionary spending. It’s not on basics such as food and other basic living costs. It would actually raise a meaningful amount of tax, which the school fee proposal won’t. What about air fares as well? Air Passenger Duty is often far less than the equivalent VAT would be. Perhaps that should be reformed.

Constantly attacking the top few percent of higher earners won’t work. It doesn’t raise enough tax.

Also, is it possible to have a sensible debate on here without it degenerating into personal, petty attacks and mocking the names of children who attend private school? It somewhat undermines your argument when you resort to childish name calling.

I agree. I used general VAT as an example of something which would raise a meaningful amount. I agree that changes to the income tax or NI system would also raise more meaningful amounts. My point is that taxing the top few percent of people never raises enough tax. It has to be a more general increase which more people pay.

Private schools are 'Discretionary Spending' so therefore should pay VAT!!!! What is difficult to grasp about this?? I have done it- I CHOOSE to spend my money on that rather than making use of the state provided provision. I recognised it was a luxury of my CHOOSING. No one forced me to.

Far more support now, but does a state school kid who ends up with the same grades have more skills exactly because they have had to do more for themselves?

I don't have the numbers to hand, but am fairly sure due to changes in their governments policy there are fewer Chinese students in the UK now than a few years ago. Equally there has been a big increase in numbers of HK students.

There are currently very few Russians studying in UK schools, it currently takes 2-3 days to travel from Russia to the UK and paying the fees is complicated at present.