VAT on private schools: a spiteful policy?

"Another day closer to the general election and I'm at my daughter's prep school in Oxfordshire," said Arabella Byrne in The Spectator. Once again, "I'm having a 'VAT chat' with a fellow mother". 

We've known about Labour's plan for months – stripping the VAT exemption from private school fees. But as the election draws near, the reality is starting to sink in. It will lead to a likely 20% rise in fees, which for many parents, including me, will be unaffordable. "I will have to take my daughter out of the school that she loves." 

This is an appalling policy, motivated by "the politics of envy" and "simple spite", said Martin Stephen in The Daily Telegraph. The success of independent schools has always been "an embarrassment" to Labour. The policy will be a "hammer blow", ensuring that in future, they are only for "the super-rich".

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No 'mass migration' from sector

This "niche" issue has been given an amazing amount of coverage by the right-wing press, said Catherine Bennett in The Observer. There are endless "sob stories" about this "formerly obscure minority of a minority": private school parents who now "face the brutal prospect of state education". We hear about all the sacrifices they've had to make to pay fees, driving old bangers, denying themselves West End shows, and so on. But let's not forget that Labour's policy is actually a moderate "compromise": private schools are not being abolished or stripped of charitable status, they're just having their VAT rules changed.

Most services, after all, have to charge VAT, said Daniel Freeman on CapX. And I am unconvinced that this policy will lead to a "mass migration" from the sector. Private schools have provided clear evidence that parents aren't sensitive to fee hikes. Since 1997, average fees have more than doubled in real terms. The effect? "Essentially none." Besides, there is little reason to believe that schools will pass on the full cost of VAT, at least in the short term. They're more likely to cut the lavish facilities they provide.

A 'counterproductive' plan

Bigger, richer schools will be able to take the hit, said Anne McElvoy in The i Paper. Others won't. For example, Downham Preparatory in Norfolk, which gives a third of its places to autistic children, says it will not survive the VAT hike.

Admissions to private schools have already fallen by nearly 3% in the past year, said Mike Harris in The Guardian. Labour says the policy will raise £1.6bn to pay for more state school teachers. But every child who leaves a private school, so their parents can avoid £3,000 of VAT, will cost the schools budget £8,000. So Labour's plan risks being "counterproductive".