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.