Labour Party plans to add VAT to school fees – HMC Chair’s response

10 April 2017
Posted by Heidi Salmons

In response to The Labour Party’s plans to pay for free school lunches for all junior school pupils by charging VAT on independent school fees, Mike Buchanan, Chair of HMC and Head of Ashford School, issued the following statement.

“Independent school heads want pupils in all schools to reach their potential and be ready to learn. But Labour’s proposed funding of this policy is unfair, based on myths and dodgy maths, and likely to end up costing the Government billions.

“Families who are able to, choose independent schools because they want the best for their children. Often, both parents work extra hard and save money elsewhere. Far from being the mythical uber rich, a third of them – around 40,000 - get help with fees. A price hike is likely to drive them and many others into the state system, costing the Government up to £1.5bn including the £5,500 pa cost of state education and new schools to accommodate them.

“This exceeds any money raised for a policy which will benefit a large number of affluent families who have chosen state education and arguably have far greater disposal income. It makes no sense.

“It is frustrating to see yet another ill-thought-through political attack on families who are already saving the state around £38,500 each a year and ask for no rebate on their taxes. In some cases, part of the fees paid by these parents will already be used to fund their schools’ charitable activities and additional support to state schools.

“Parents do not pay VAT on school fees for good reason. As well as saving the Government money, they are buying education which is a charitable activity in law. Our schools operate as charities because they meet a host of charitable objectives under the scrutiny of trustees and the Charity Commission.

It’s extraordinary that self-improvement through education, however delivered is thought of as a luxury equivalent to buying a washing machine.

“Perhaps most importantly, the debate needs to move on and we need a different conversation. Independent schools already have an invisible but important positive impact on cash-strapped state education and we stand ready to do more. We are part of the solution, not the problem.

“Independent schools already spend well over a million pounds a day on free and reduced cost places for lower income families. At least 160,000 state school pupils benefit every year from free academic, sports and arts lessons, use of facilities, university and careers advice and co-curricular activities.

“We hope that Theresa May’s government will acknowledge this in their forthcoming education White Paper and agree to work with us positively and productively. It’s time to put pupils before politics.”