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An interesting point

If private schools must pay full business rates and parents VAT on fees, then why shouldn’t universities have to do the same?


Labour says it would remove the charitable status of private schools, scrap their business rates relief and charge 20 per cent VAT on school fees. It claims the policy would bring in £1.7 billion to invest in the state sector.

Private schools argue that the policy would be loss-making because of the number of pupils who would be unable to afford a 20 per cent hike in fees, increasing the burden on the state sector within five years of the policy being imposed.

Whether or not it would make a profit from the state point of view is indeed doubtful. There’re some 600k private school pupils. Costs the government – without the capital budget or, I think, pensions – £6,500 a year to educate a pupil. They think this will raise £1.7 billion over 5 years. So, if the private sector shrinks by 10% or so then that will cost the state system more – 60,000 times 6,500 is more than 1.7 billion / 5.

Given that the entire aim here is to shrink that private system it probably isn’t, in fact, a money maker.

But let’s go that one stage even further. Such tax changes aren’t going to wipe out the private sector, just shrink it.The other word for that is that it will make private schooling more elitist. For those shaken out by he price changes will be the marginal pupils.

So. a money loser that makes public schools more elitist. Well done Labour.

23 thoughts on “An interesting point”

  1. So. a money loser that makes public schools more elitist. Well done Labour.

    It was always a matter of spite for Labour, irrespective of how many of them attended private schools (preparatory, public/boarding schools AND funded grammar schools) in their younger days. Like Reigate Grammar School which was Sir Keir’s old alma mater.

    Some would argue that it’s also a matter of pulling the ladder up after them, since those marginal pupils excluded from a decent public school education will be forced back into the pond with the rest of the pond life.

    A more elitist private school sector would be less of a threat to the elite themselves, especially as the state sector continues to spiral downwards. The last thing the elite want is being challenged by uppity grammar school types, like the old days.

    That’s why they had them closed and made the creation of new grammar schools illegal. That well had to be explicitly poisoned to prevent upward mobility.

  2. Yep, and it’s not even about punishing the megarich. They’ll do what they do, regardless of how much it costs. The entire point of Labour’s policy – indeed, quite possibly all their policies – is to force the working middle class to get back in their lane.

  3. Labour Minister Anthony Crosland on Education: “If it’s the last thing I do, I’m going to destroy every fucking Grammar School in England. And Wales. And Northern Ireland.” 

    I also believe he said “The problem with grammer schools is that they take children from good Labour homes and turn them into fucking Tories”

  4. Ah yes… The Highgate School and Oxford University Anthony Crosland. Absolutely certain that he and his like didn’t want to compete with grammar-school educated plebs. And didn’t he do a good job of it!

  5. The problem with grammar schools is that they take children from good Labour homes and turn them into fucking Tories

    Upward mobility will do that, which was why grammar schools were abolished and the earth salted to prevent them being restored.

    I attended a state grammar school and went on to work in the city for BP Oil and other oil, gas and power companies, before becoming an international consultant working from LA to Singapore.

    If I’d attended the local sink comprehensive like the rest of my neighbourhood cohort, I doubt that I’d have even left the town I was born in.

  6. According to Latymer they spend 20% of income on charitable works , then they can simply stop being a charity . Which will of course simply replace private sector charity work with equivalent state funding with all the inefficiencies and transformations that implies. Of course the other tactic is more efficiency gain through bigger private schools (something in the plans for one i know whose major concerns have been about growing too quickly (although one can see mergers and consolidation rather than sector growth)

    Neither seem to make much sense given the implied objective. Something like 25% of private schools are not charities – a compare and contrast would be interesting.

  7. It claims the policy would bring in £1.7 billion

    I’d bet that that claim assumes the number of children in private education remains constant after the introduction of VAT of fees.

    60,000 times 6,500 is more than 1.7 billion

    Will I ever get used to the methods of STEM experts?

  8. I’d bet that that claim assumes the number of children in private education remains constant after the introduction of VAT of fees.

    Of course, because if government policies were required to take behavioural responses into consideration as feedback to their implementation then the vast amount would have to be abandoned because the supposed savings simply get eaten up with other budgets.

    The advantage of VAT on school fees is that the VAT (even on a small number of pupils) goes to the treasury, whereas the costs of taking former public schoolboys into the state school system resides with the local education authority (or local equivalent).

    So hiding the potentially larger figure (cost of state school education) because otherwise the net gain becomes a net loss to the UK taxpayer as a whole.

  9. “ charge 20 per cent VAT on school fees”

    A policy they can only do because of Brexit (the education exemption from VAT being compulsory in the EU)

  10. 60,000 times 6,500 is more than 1.7 billion

    Will I ever get used to the methods of STEM experts?

    Re-read Tim’s post, TMB. You cut off the division by 5. The claim is 1.7 gigaquid* over five years. 60k * £6500 pa is 390 megaquid pa, which over five years is 1.95 gigaquid..

    *It probably ought to be gigaquids, but you lot in the UK speak English rather strangely. Then again, it just occurred to me that you expected Tim to use “milliard” in place of “billion”.

  11. Thanks Ted, I mistook that for Tim’s typing a rogue full stop or what you chaps call a period which is something that only ladies and climate sceptics talk about over here 😉

  12. Are there any people here that Labour exists to represent the needs of the Hoi-Polloi?

    The UK political system is a Debating Club with fancy rituals, set up to allow only two Sides. You pick one, and stick to it.
    The whole point of that debating club is to keep the Unwashed out, and your mates in. The Duality is deliberately engineered to keep the debate going without the punters ever getting wind of the scam.

    As-is, the UK political system has been taken over by the “bourgoisie”, having mostly booted out the nobs, and they’ve simply settled in the same comfy chairs without rocking the boat too much.
    And they’re just as hell-bent on maintaining their privileges as the old nobs were.

    The UK is, by far, not the only place this is a Fact of Life. But it is one of the few places where they don’t even try to hide it while pretending to be a “democracy”.

  13. Someone came up with this idea. Charge VAT but allow school fees as a deductible expense. Roughly neutral in money terms for UK taxpayers, so so sad for foreign oligarchs.
    The same principle could be used in health insurance, allowing the NHS to stagger on for a few more years before total collapse.

  14. Class war bollocks aside, removing state subsidies to private business is generally something we should encourage.

    . . . then why shouldn’t universities have to do the same?

    Action this day.

    State provision of education is probably the historical start point of societal rot. We should end it, starting with the universities and gradually making our way down the age groups.

  15. Bloke in North Dorset

    And when all those parents start demanding that the state start giving them the education they expect there’s going to be a few pissed off teachers and MPs because they’re the sort of parents who expect to get what they want and won’t doff their caps to the education blob.

  16. Some years ago Trinity College Cambridge was mulling over the idea of stopping admitting undergraduates and becoming purely postgraduate. The clinching argument against was that it might upset the government which might retaliate by withdrawing their charitable status. So if the charitable status were snatched away anyway, …

  17. As part of their charitable status aren’t they mandated by government to share some resources with local state schools, I assume that without charitable status that would go as well which either increases costs to the state or is more likely less access to resources

  18. Speaking from personal experience, public schools are also a source of export income as furrin parents send their children to be educated here. Present income and future soft power. Why wouldn’t the vindictive Left cripple it? It’s what they always do.

  19. Numbers are wrong. That’s the running cost. If you chuck 60,000 pupils (probably more) into the system you have to build infrastructure for them as well.

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