Keir Starmer has announced that private schools will lose VAT exemption if Labour are elected. This will not be phased in so could be in effect by next year. Most private schools will not be able to absorb this cost so the additional 20% will be passed onto parents. Labour expects that this will raise £1.7 billion to invest into state education; here we have a look at the caveats.
1) The policy won’t raise any money to inject into state education
The 1.7 billion that Labour expects to raise is based on an assumption that parents will find the additional money to keep their children in private schools.
Shadow Secretary of State for Women and Equalities Anneliese Dodds recently pointed out that over the last couple of decades private school fees have been going up above inflation and this has not seen numbers drop.
However, against a backdrop of high mortgage rates and living costs many families with children in private schools will be struggling already and the extra 20% will just not be feasible.
A survey by Independent Schools Council found that 20% of parents would withdraw their children from private schools if this policy came into effect.
If 20% of the 600 000 private school students join the state system then this will cost the state close to an extra billion pounds to make places for them.
Plus there will be 20% less students in private education to charge VAT on so most of the 1.7 billion Labour estimates will be wiped out.
2) Pressure on state schools to take the additional pupils
If the estimated 20% of parents look to take their children out of private schools and into state education system, there is going to be an influx of applications into outstanding schools.
Due to the Ofsted bias towards examination results most of the outstanding schools are in affluent areas. A likely inadvertent outcome of Labour’s proposed VAT policy will be greater demand for houses in these areas putting upward pressures on house prices and having an adverse effect on inequality.
Labour may well want an egalitarian education system, which is of course is an admirable motivation for the policy, but it is just not going to work. Middle class parents will always do what they can to maintain their advantage for their children and this could be at the expense of less well-off families who will face increased pressure to get school places in good catchment areas.
3) Disruption of children and young people’s education
The policy will affect the least well-off families and you would expect that bursaries for low income families will be the first to go, as private schools tighten the finances.
Moving schools mid-way through schooling is an unpleasant experience for children and young people. Pupils have already made friend circles and settled into routines.
There is a big culture difference between private schools and state schools and some might find it difficult to settle, disrupting their education and causing mental health problems at an important time of their development.
4) Aspirations of middle class families and the effects on the Job Market
Sending their children to private school is a lifetime ambition for many families and something that they are willing to work that little bit extra for to ensure they have the funds to afford the fees. Changing the goalposts either before parents get a chance to enrol their children or even worse mid-way through their schooling may well have adverse effects on the job market.
Without the substantial outgoing of school fees, finances will become more relaxed and many families may decide that both don’t need to work full-time any longer. Several highly skilled workers could leave the job market at a time when skills shortages are reported across most sectors.
Summary
A proportion of the population feel that private schools represent inequality, therefore Labour consider that to reduce the numbers of pupils attending private schools as well as raising money for state education is a good electoral policy.
The £1.7 billion raised will help fund improvements to state education. But that is if parents can afford the 20% hike, which is extremely unlikely with the current cost of living.
If a Labour government wants to reduce privately educated pupils in the name of equality then the measures need to be properly planned out to avoid disrupting the education of thousands of privately educated pupils as well as sending tremors through the already stressed state education system.
Otherwise it’s difficult to see who will actually benefit.
