VAT on Private School Fees: A Move Towards Meritocracy?

By Kate O'Mahony

Many of us educated in the comprehensive sector have tales of the sorry state of our schools. One that always resonates with me is playing netball at the local private school, which had the school's name embossed on the balls. The following day in history, we would spend the whole lesson passing the singular glue stick around the thirty of us to stick our sheets in. Trivial an analogy this may seem, it paints a picture of the vast gap that exists between the two sectors. A gap that pending the incoming of a Labour government, could see some narrowing. 

The proposed plans would remove the tax breaks that private schools currently enjoy by placing a 20% VAT on the fees. It’s important to note that private schools are not obligated to raise the fees by 20%; they could instead absorb the VAT themselves by reducing fees, either taking the cut in profit or tightening their belts when it comes to other outgoings, perhaps teachers wages or heating costs. But interestingly, this rhetoric is only used when state schools are facing enforced fiscal pressure through austerity measures, when private schools have their tax breaks removed, it is portrayed as a travesty. God, forbid they sell off a rugby pitch. Parents complaining about fee increases should not direct their resentment and anger towards the incoming government, but at the schools choosing to maintain high fees, for that is what tends to occur when you send your child to a profit-making institution. 

The debate over this policy has been rather misleading. There seems to be despair over the potential for masses of children being sent to their local comprehensive. In actuality, few students are expected to move as the Institute for Fiscal Studies, an independent institution, projects that even under high-cost scenarios, with sensitive switching rates, the policy would still net £1 billion, with a more accurate estimate around £1.3-1.5 billion. This assumes a low switch rate of 3-7%, especially given the expected drop of 700,000 pupils in the state sector due to declining birth rates. This is reinforced by the significant rise in private school fees - 23% from 2009-2020. Yet there has not been a response of decline in attendance, there has in fact been an increase, much of which can be attributed to the increase in economic inequality in the UK since the financial crash. The rich have gotten richer and the poor poorer – underscoring the desperate necessity for such a policy.

Another point of contention concerns the provision for SEND children, with fears of moving them out of a sector that provides necessary support. However, children with educational health care plans will be exempt from the VAT. Moreover, the vast majority of these children are already in the state sector. The concern over inadequate support for such children highlights the disparities in their experiences, and the potential impact of this policy on some of the most neglected and marginalised students in the education system

"Parents complaining about fee increases should not direct their resentment and anger towards the incoming government, but at the schools choosing to maintain high fees."

Contradictory is the best way to describe the rhetoric that dominates policy around the state/private divide. Allegations of human rights abuses, questions over ethics and morality. The questions have been ‘is it unethical to tax hard working parents who send their children to private schools?’ instead of ‘is it ethical to allow children to be taught maths in classes of 30+ by the PE teacher while the wealthy enjoy tax breaks?’. Not to mention, there is a widespread denial of the fact that private schools are for the very wealthy. Attendance rates hover around 0-5% for most households, spiking to 50%+ for the top 5% of incomes. The average cost per child is £15,200, doubling for families with two kids, almost matching the average disposable household income of £32,300. The persistent notion that it is hardworking parents, scraping and sacrificing to send their kids to private school suggests it's your average nurses and teachers doing so. The reality is that private education is for the affluent few, not a socialist myth but a cold, hard fact.

Labour have increasingly softened their stance on the private school issue. Starmer and Phillipson parrot the line that they are not anti-private schools and respect parents’ choice to send their children there. The approach recalls the ULEZ during the Uxbridge by-election. Instead of fighting their side of the debate and defending their position, Labour pandered to the other side, hoping to avoid alienating those who disagree. The result is a lukewarm middle ground that satisfies neither camp. This policy inherently challenges private education, by taxing it and reallocating resources to the state sector, aiming to elevate one and narrow the gap with the other. 

They won’t say it, but most on the Labour side understand that private schools facilitate such deep educational inequality. With smaller class sizes, more motivated teachers, better exam results, coaching that parachutes their students into the best universities. In all Russell groups the privately educated are vastly overrepresented, these students proceed to dominate the elite positions in society – law, politics, journalism, banking and military. In Sunak’s most recent cabinet, where 63% of ministers were privately educated, their choice to enrol their own children in private schools starkly reflects their perception of the state of the schools that they fund, control and run. 

VAT is a commendable first step, but it will barely touch the sides at the vast inequality that exists between the two sectors. Globally, it is evidently clear that education systems that lack selection – be that religion, wealth or entrance exams, tend to excel. Take Finland, renowned for having the world's best education system, operates without private education. Wouldn't we all prefer to live in a society where people can't buy their children a better education, and consequently a better future? Where whether or not your dad is the caretaker or the prime minister, you sit next to each other in the same classroom, and starting from the same starting line. If the Conservative party had any true belief in meritocracy, the two-tiered education system would be an adversary to reckon with, but the entrenched cycle of privilege that these schools instate, is hard to shake.

Image: Flickr