The Labour party have always suggested that private schools start paying VAT for years, but this is a disastrous idea. Keir Starmer, the newly elected Labour leader said last month that it is a tax loophole and it should be removed. He is right that it is a loophole, but the loopholes have been designed this way on purpose – to make Britain a place to attract global talents from all over the country and the world. At the moment there are around 55000 foreign students who study in independent schools, and they are all talents who come from a different background to ordinary Brits. This diversity improves Britain and has turned Britain into one of the best countries in the world, connecting Britain to the world.
The Labour party have always said that the funds that come out of VAT will save taxpayer millions and will improve the lives of millions of children who are less fortunate. But simply, it won’t. According to Oxford Economics, 620000 Children are educated in a Private School which saves the Government 3.5 billion pounds every year, as 530,000 of these pupils would otherwise be in a state-funded school place. These schools also make a positive contribution to the economy’s supply-side. It supports 13.7 billon of the UK’s GDP annually and it creates 330000 jobs. In addition, it already generates 4.1 billion yearly in tax revenue.
The issue of poverty is serious and it should be looked into, but this is not the way things should work. Private schools should not be to blame for poverty or inequalities, and it should not be targeted this way by the hard left and the left-wing press. “E Pluribus Unum”, which is the founding principle of the United States, which means “Out of many one”. This should be the principle that we adopt, however rich or poor we are, whatever race we are, Asian, Black, Latino. We are all equal and connected and we are all united together. Although and this is the principle the left is using for taxing private school, to try and make the society more equal, they bring down those who are rich – which is unfair.
But more crucially, not everyone who studied in a private school is like Boris Johnson and not every private school is like Eton or Harrow. There are a few hundred of them and not everyone who has studied in a private school is rich and powerful. Loads of middle-class families have worked hard for all of their lives and sent their child to these schools. If private schools have to start paying VAT, those hard-working families would be shown to the door to leave the private educated system and study in-state school instead. By inserting VAT into private school bills, about 130000 children which would be forced out because of private schools because it would be too expensive for them and they would require state school places. This would require extra funding for the state education system. Where would the money come from? We need to be realistic because we are not living in Wonderland.
In response, the Labour Party have always claimed that the tax would contribute 1.5 billion pounds to the Treasury. However, we must also consider the many unseen consequences. Firstly, the 130,000 children of the hard-working middle-class families would cost the taxpayers 600 million pounds a year due to them needing new places in-state school. It would also potentially affect those 330,000 jobs private schools have helped to create. Because the class size in-state schools are generally bigger than private schools, it would require less new teachers than there are in private schools. This means that some teachers will lose their jobs. But some people say this is a good thing and with more teachers, we will decrease class sizes and give each student more attention. However, if we start bringing in more teachers in order to get the class sizes down, this would require more funding for either the salary of teachers (or individual teacher salaries, which are already low in some instances, will have to go down). But also, there would probably be new school construction to create more classrooms if there are smaller classes but the same number of students, more classrooms would be required. This is a large economic impact often ignored.
Moreover, we haven’t taken into consideration the 55,000 international pupils who attend private schools. We don’t know the exact number of international students who would be forced out of private school because of VAT. This could affect a wide range of jobs from airport cleaners to guardians and even pilots, due to the decreased number of international pupils and thus air traffic as school children are some of the most frequent passengers on certain airline routes. In addition, this will lead to Britain losing its lead on the education market because of the expensive fees and stop Britain connecting with the world.
For the government to start putting more funds into the state education system, the money collected from private school’s VAT would be spent on the state education system, but also more money would need to be spent because of the new state-school students. On net, there is no benefit as you simply use the VAT to fund the new places and you can’t actually use this money to improve the state schools like Labour says it will. All that is achieved is the depriving of a slightly better education for those 130,000 children. Let me prove how hyperactive the Left is by asking this question – why are they allowing a woman to choose what to do regarding an unborn baby, but not allowing parents to choose how to spend their money and what to do with their child’s education? By taxing private schools, you are taking away the choice from the middle class and private schools only remain a choice which can be afforded by the rich. This in fact makes it harder for us to be united and more equal.
Private schools should not be the to blame, the government’s failure to act should be the reason to blame. How should we get more money into the state-educated system? It should not be by taking away money and choices from parents, it should be by stopping every pointless project like HS2. Private school educated pupils are not the ones to blame for this, not everyone’s dad or mum in a private school is as rich as Alan Sugar. The government should start collecting more tax on every property that is bought by a foreign national who is rich. As it is, this is the reason why housing prices and poverty are so great in London, because these people have dramatically increased the housing prices by taking up the supply. It’s not the fault of a child for what decision their parents have made and they should not be impacted when the government does not act elsewhere. The Labour party have no right to take away choice, friendship and a better education from people. Clement Attlee, Labour’s Prime Minister from 1945-1951 said: “I believe that the foundation of democratic liberty is a willingness to believe that other people may perhaps be wiser than oneself.” What this tax is suggesting, by making a decision for parents and taking away their liberty to choose is going against that principle. Real action needs to be taken in order to make the country truly “E Pluribus Unium” and be truly united
By changing the system, it would cause a lot of damage to our economy. It will do the taxpayers more harm than good. Not everyone in a private school is rich and not every private school is as wealthy as Eton. Making private schools pay VAT would lead to a mass closure of private schools, a tremendous waste of facilities and assets. If the government is instead going to nationalise these private schools – where would the money come from? Borrowing is definitely not the solution, and it will build up more debt to the country. Taxing private schools more will do more harm than good. Real action needs to be taken by politicians to make our country truly “E Pluribus Unium “. Out of many one, and unite the country.
Bennnet, Rosemary. Labour manifesto: Tax on private schools could force out 100,000 pupils. 2019. Accesed from: https://www.thetimes.co.uk/article/labour-manifesto-tax-on-private-schools-could-force-out-100-000-pupils-qv9bcs6c3
Oxford Economics. The Impact of Independent Schools on the UK Economy. 2018. Accesed from: https://www.isc.co.uk/media/5423/isc_report_2018_web_26-11-2018.pdf