Labour should work with schools, not tax them out of existence

Keir Starmer insists his plan to place VAT on independent school fees is not ideological. It’s a ‘difficult decision’, he says, but necessary to raise revenue which will be used to hire 6,500 teachers for state schools. He wants the independent sector to ‘thrive’. Few would deny that state schools need better funding, but it is important to question whether the policy will be successful at raising money and also to examine what a thriving independent sector looks like, how it can contribute to education more broadly – and how the VAT plan threatens all that.

Labour has claimed for some time that the policy would raise £1.7 billion. This initial figure was based on a 2011 Fabian Review article that simply calculated 20 per cent of the sector’s fee income.

A structural flaw in basing calculations on a blanket 20 per cent figure is that all schools will be able to reclaim VAT input, so schools that have made greater capital investments will struggle less.