How will Labour Party’s private education tax increase affect UK educational system?

How will this policy affect the half a million students in private education? Carina Kamel investigates from London.

Published: Updated:
Read Mode
100% Font Size
6 min read

The UK’s opposition Labour Party, which has a strong lead in the general election polls, has promised to raise taxes significantly on private schools to tackle a funding crisis in the state education sector.

But how will this policy affect the half a million students in private education, which include 62,708 foreign students representing more than 11 percent of those privately educated?

For all the latest headlines follow our Google News channel online or via the app.

Westminster School is one of the oldest and most famous schools in the UK and its alumni include many notable figures. Tuition costs $ 43.4 thousand (£34 thousand) per student.

If the Labour Party wins the election, tuition could rise to £40 thousand every year as party has promised to impose the value-added-tax or VAT which currently stands at 20 percent on private school fees.

The policy aims to raise £1.5 billion to improve state schools and hire 6,000 new teachers in the public sector.

“But there’s big question marks around how parents are going to react to this. Are parents going to stick with the school their child at and keep paying the VAT on their fees?” Tom Richmond, Director of EDSK Education Think Tank, told Al Arabiya English. “Or are the parents going to say I’m sorry, it’s just too much for me and pull their child out of that school, which of course will mean the government doesn’t get the VAT on those fees. And then the government has to pay to educate them in a state school instead,” Richmond said.

Other large schools like Eton, Harrow or Winchester – where Prime Minister Rishi Sunak studied – are unlikely to be affected by the new tax.

But most private schools are small – with less than 300 students – putting their survival at risk if, as some fear, parents pull their children out because they can’t pay the higher fees.

Some of those parents have started the ‘Education not Taxation’ campaign calling for a re-think, they say the tax is unfair on their children, will increase pressure on the state system and question if it will raise the targeted amount.

“Education is a social benefit, and it should not be taxed. Number two, the parents who are sending their kids to the private school for whatever reason it might be…they are already contributing to the state schools through their taxes,” Loveena Tandon, spokesperson for Education Not Taxation, said.

“We pay taxes to the economy and to not use that facility, therefore saving the taxpayers taxpayer money,” she added.

There have been varying predictions about the impact of the policy on student movement with some reports warning that a quarter or even up to half of private school students could transfer to the state sector.

If that happens, the Adam Smith Institute think tank said the policy could potentially cost the government £1.5 billion.

The Labour Party, however, is drawing on a different report by the Institute for Fiscal Studies predicting that only about 7 percent of students would make the switch. It said funds raised would tackle the crisis in teacher recruitment, improve school buildings and offer mental health support for students.

For its part, the Education not Taxation campaign said it wants to break the stereotype that private school parents are all wealthy and privileged.

“There is a wrong perception that all parents from private schools are privileged and all parents from state schools are not. That’s not the case. Our story is the story of construction workers, of nurses, of doctors, of Journalists, of small businesses,” Tandon explained.

“We are people for different reasons, trying to send our children to a private school to do the best by them in this situation that we are in, we are not rich. We are not privileged. Please listen to us.”

The latest census data from the Independent Schools Council showed a drop of 2.7 percent in private school enrolment this year, the biggest decrease since 2011.

A number of local councils have said they can’t guarantee state school places for pupils switching with classrooms already full.

But the Labour Party said the national birth rate is falling, so councils should be able to find places for those who need them. Availability, however, does vary greatly across the country.

The party also noted that private schools have increased fees significantly over recent years and should absorb most of the tax rather than pass it on to parents.

“The one thing which absolutely everybody agrees on is that we need more investment in state schools,” Richmond, the director of EDSK Education Think Tank, said.

“When we have a teacher recruitment crisis, we cannot find enough teachers to go into our schools…Even when we get teachers into government funded schools, they seem to be leaving in ever increasing numbers.”

He added that it’s becoming harder to “get graduates into teaching because they can go in, earn more money doing other jobs because teacher salaries have been so poor for so long, and ultimately everyone wants to see those situations reversed.”

The debate surrounding the cost of education is not limited to schools with some calling for university fees to be increased.

Tuition fees for British students have been frozen at £9,250 pounds a year since 2017 but that has created a funding crisis for many universities as costs and inflation have risen dramatically.

With election day approaching, polls show wide support for the tax on private schools but when it come it comes to increasing university tuition fees voters are lot less convinced with most opposing any hike in prices.

Read more:

UK visa reforms could force hundreds of foreign graduates to exit immediately

UK’s Labour puts economic stability at heart of election offer

UK statistics watchdog urges Sunak to be clearer on tax claims against opposition

Top Content Trending