I had high hopes at the last general election there was a strong chance that the lunacy of Conservative governments dumping on the people of the UK with austerity, Brexit, Boris Johnson’s criminal parties in Downing Street and constant lying, Liz Truss’s disastrous budget, and Rishi Sunak’s insane Rwanda scheme would finally be over.
I may live in France but I still pay some taxes in the UK and have family here, so I have a very real interest. I did not want Labour to win as I am a member of the Green Party and reversing climate change and protecting the environment are the most critical issues that must be solved to give my grandchildren a chance of growing up in a civilised world. But at least Labour were not the Conservatives. Somewhere deep in their entrails, it was possible there was some concern for the poor and for working people.
I liked some of their policies, such as charging VAT on private school fees. If we take David Cameron’s father as an example, who paid for his son’s Eton education with a trust set up to avoid income tax, plus the avoidance of VAT and lowered business rates from pretending to be charities, the average private school placement is subsidised by significantly more than the just over £8,000 spent annually on each pupil at a state school.
But was it just another Labour mistake?
Labour has made fools of themselves with the decision to reverse the winter fuel allowance cuts. Many pensioners, especially those with substantial private pensions, did not need it. But the removal of any universal benefit is guaranteed to hurt – and hurt some badly. Surely they should have seen that coming?
Now the reversal will remove most of the saving. The rise in those claiming pension credit and the cost of managing the latest means testing will dispose of a lot of the rest.
Own goals create dreadful optics. The winter fuel allowance could have been reduced over two or three years as the pension rose year by year. That would have given warning to those most affected and could have been balanced with encouragement to take pension credit where appropriate – lower savings but a happier populace. Planned cuts to PIP, disability benefits and universal credit were set to hit at least three million people. More reversals are happening and I suspect others of these will backfire.
Who gets hurt by VAT on school fees?
I hold my hands up to celebrating this legislation at first, but I have changed my mind. Most people who send their children to private schools can afford to do so and are significantly subsidised in that choice by me and you, the taxpayer.
But there are some for whom this is a difficult and life-changing decision. Parents with neurodiverse children who fail to flourish in state schools – usually because those schools lack the resources to help children with complex needs achieve their best – may choose to go private despite their deepest beliefs. I know one couple of state school teachers whose son was only able to thrive in a private school.
Children with special educational needs (SEN) are sometimes partially funded by local authorities to ensure a child gets what they need. If a child has an Education Health and Care plan (EHCP), then VAT on school fees may be avoided. But these are notoriously difficult to obtain. As with the winter fuel allowance and disability benefits, adding VAT to school fees can create frightening financial cliff edges for some.
The argument that parents choosing to send their children to private schools are paying twice – once in school fees and again in taxation – is not necessarily true. That may be correct for some, particularly the less well-off, but the genuinely rich have many ways to pay significantly lower percentages in tax than the poor.
So why do the rich send their children to private schools?
If the local state schools were good enough, surely even well-off parents would send their children to them and support those schools to be even better. But this argument does not work. Many state schools are as good as any private school and often have equal or better results, especially in core subjects such as science, English and maths. They do not do as well in music, drama and art, quite probably because the funding for creative subjects in state schools has been squeezed out of their budgets for years.
The primary reason has little to do with the quality of the education. Above all it is to buy into a network that provides access to jobs and opportunities, that creates connections that trickle down the generations. I spent many years working in a large professional firm in London where every partner had been to a private school. The connections were palpable and the exclusions of those who had none were clear. Unfortunately this is rife in many professions including medicine, law and the civil service.
The network is not simply about money
The public school network does more than simply enrich its attendees and alumni. It creates a cesspool of association and interaction where friends and children can be quietly advanced up the ladders of influence. It is used to create subtle and often unseen but remarkably strong barriers to keep out and down those who are perceived to not be part of the ruling class.
The Bible tells us that “It is easier for a camel to go through the eye of a needle, than for a rich man to enter into the kingdom of God.” And it is almost as difficult for the state school pupil to work their way into the network of power. The class divide in the UK is reinforced continuously by allowing subsidised private education to flourish.
Even as recently as 2024 almost half of Conservative MPs and 15% of Labour MPs were privately educated, as opposed to just 7% of the general population. At least Starmer’s cabinet has a higher proportion of state educated people than ever before.
The real reason we need to do something different
Recovering some of the money used to subsidise the education of the ruling class was a good idea. But VAT was the wrong weapon, and not just because it disproportionately hurts those who genuinely need private education to rebalance the world for their children.
The reason why it was a truly terrible mistake was because, as I have only recently discovered, the EU prohibits VAT on school fees. When the UK properly resets its international brain and decides to rejoin the EU, this is likely to cause significant friction and may have to be reversed. If you are going to reverse a policy the sooner you do it, the better chance that it will fade out of memory before the next election.
But, and there is a huge but, we still need the money this policy would have generated to better fund state schools. Charging VAT raises money but hurts and disadvantages those struggling to do the best for their children. If it is not fair to charge poorer parents as they send their daughters and sons to school, can we recover the money through a different route?
So how do we raise the money?
We require university students to repay the cost of their education once they have an income over £25,000. Why not do something similar with parents who send their children into the hugely subsidised private school system?
We already have a progressive income tax with no tax on the personal allowance of £12,570 then 20%, 40% and 45% on higher tranches of income. Instead of charging VAT at the school end with different elements attracting VAT and others remaining exempt, we could add to the tax bill of those parents who earn more.
Tax returns could include the number of children in private education and any income above, say, double the average earnings of £35,000 could be taxed progressively to produce the funds needed for state education. We could start at an additional 1% per child on all income over say £70,000, 2% on income over £100,000 and increase the rate progressively on higher incomes. Child benefit stops when a child over 16 leaves education or training. The same principle should apply and this extra tax would cease when each child left private education. That would place the burden where it belongs: on those with higher incomes that derive greater benefit from this system.
