How VAT on Independent Schools would impact every family

One can’t help but feel that the current narrative about Independent Schools’ Charitable status and the expectation that parents should pay VAT on school fees is overlooking the far bigger issue. The very real reality, which the current Labour Party seem determined to overlook, is that if their plans to impose VAT on Independent schools were to happen, the knock-on effects on the educational system in England would be devastating for all our children.

There seems to be an assumption that every family currently sending their children to an Independent School would be able to afford a 20% increase on the fees which would apparently enable a Labour Government to raise ￡1.71 billion in VAT. Quite simply, that is a naive presumption and let me explain …

Whilst there are the super-rich for whom school fees may be incidental to their income, they are an incredibly small minority of those who attend an Independent School. Too many people seem to buy into the Labour rhetoric that every family who sends their child to an Independent school has the same means as those who attend Eton or Harrow, where fees are indeed an eye-watering ￡37k plus a year (the average Independent school being ￡12,939). The reality is that the vast majority are no different to other families whose children attend State schools and in order to send their children to an Independent School, both parents are working and perhaps committing that second salary to their children’s education at the expense of something else that other families have opted for instead of a private education - the nice car, the overseas holiday or the bigger home; they are certainly not ‘privileged’. They have made a choice and with that choice they are making significant sacrifices and Labour would look to punish them for it for the sake of a populist ideology that simply doesn’t hold up when put under scrutiny.

The further reality is that since a significant proportion of families would not be able to manage such a massive increase in fees, their children would simply have to be accommodated in the State sector. They have, after all, paid their taxes for that right; currently they are subsidising those children in the State sector and receive no benefits or tax breaks in return from the Government. Hopefully one can immediately see the irony of the Labour Party’s claim that they would be raising ￡1.71 billion in VAT. Of course they wouldn’t, because there won’t be so many children in independent education and the revenues of Independent schools will decline significantly.

What would be the new reality? Well undoubtedly, class sizes in the State sector would increase significantly. A class size of 40 or more would become the new normal. Every child in State education would be given less quality teaching and individualised attention simply because it would be impossible to deliver it. It would be a fact that teachers would not be able to set or mark work to the standard that we need if we want our nation to be a leader in education. In short, the quality of the educational experience for all children would decline and be significantly damaged by Labour’s approach.

I would also question how many schools are capable of fitting that many pupils into a typical classroom in their current buildings. The amount that will be needed to build new schools or adapt existing ones will be a huge cost and I doubt this is being factored in to the thinking behind the tax grab.

The alternative to bigger classes is more classrooms and more teachers which all come at a significant cost to the tax payer.

It may well be that the teachers in the Independent schools do move across to the State sector but they may not and the already significant shortage of teachers would become greater. Indeed the greater pressure on the teachers in the State sector with the increase of pupil numbers in their classes may push many of them to the point that they decide they no longer want to stay in the teaching profession at all. The cost for the increased number of teachers in the State sector would also have to be absorbed by the State and with that would also be the contributions to the Teachers’ Pension Scheme which many Independent Schools have opted out from – a further significant burden on the tax payers who currently have this covered by the Independent Schools who put no demands on the State.

It is not difficult to find the figures that demonstrate how much the tax payer is saved by having an Independent Schools sector. It is estimated that the cost of educating those currently in private education would be close to ￡4.4 billion and that is before taking into account the ￡5.1 billion in tax revenue and the 300,000 people employed by these Independent schools, all of whom also pay their taxes.

Meanwhile, it should also be acknowledged that a huge number of young children’s lives are transformed by the opportunities that they find within Independent schools and many are on bursaries and scholarships to make it possible. In the past year nearly ￡500 million has been given out in bursaries to families who would otherwise struggle to pay for an Independent education. All of this would be jeopardised by Labour’s plans because Independent schools simply wouldn’t be able to afford to continue to offer these bursaries.

The Independent sector is not widening the social divide as labour would have us believe. Quite the opposite. It is doing more to bridge and narrow that divide by making it more inclusive and less elite. Rather than looking to cripple the strongest features of our educational system, why will Labour not instead look to see how it can make Independent schools more accessible to more families by giving families the option to have their educational allowance go towards Independent school fees (currently at least ￡4,405 per primary pupil, and at least ￡5,715 per secondary pupil, ￡6275 if you include capital investment). This would significantly alleviate the burden on the State and raise educational standards across the country but will Labour or, for that matter, any political party take such a bold stance. I suspect not but I wonder how many voters would like the opportunity to have the choice to be able to consider an Independent School education for their children if it were subsidised in this way.

Completely lost in the Labour narrative is the work done by Independent schools in partnership with not just schools but all facets of modern society. It is the Independent schools that send out their teachers and pupils to support other local State schools, run music and sports programmes, host events and conferences, work with local businesses, all with the aim of creating opportunities for the benefit of their wider community (and beyond) through a desire to collaborate and share their experiences. One of the most important values that is extolled in Independent schools is the expectation that when you are given much, much will be expected of you and with that comes an expectation that you give back to society. The ISC Census this year identified 6,963 such partnerships and in reality I believe this figure is much higher. It was very much appreciated by many Independent and State school leaders when they were recently acknowledged for their partnerships at the Houses of Parliament, though I don't recall any representation from the Labour Party.

My hope is that those parents who have their children in a State school will think very carefully about their support for Independent schools’ loss of charitable status. By all accounts a survey by Redfield and Wilton suggests 62% of voters would support such a move but how well informed are they in expressing that position. Labour’s arguments are as compelling as Boris Johnson’s bus campaign for Brexit where he promised ￡350 million a week to the NHS; perhaps our cynicism of that campaign should now be passed across to Labour’s attack on the Independent sector.