VAT on school fees (part 2)
The UK’s segregated state vs public school system is deeply embedded in the country’s culture. Cultural attitudes and animosity between the ideals of elitism and populism stretch far beyond education, and Norway’s stronger cultural attachment to equality makes it easier to achieve equality of opportunity. Moreover, the social capital of the UK’s elite private schools will make bridging the gap that much harder. Further polarizing private and state education could further worsen inter-class relationships and extend the gaps in social capital that the UK’s top private schools benefit from. Furthermore, decades of underfunding and regional disparities mean the extra tax benefits may not even come close to being enough. Norway’s immense GDP per capita allows for continued and consistent investment into education and matching this may require further taxation. Considering all these factors, the UK’s structure and culture will limit the extent of mobility gains. One of the major criticisms of the imposition of VAT on school fees was how it would most likely hit middle- class families the hardest and not do much to affect the wealthy, whom the policy mainly looked to target. A financial planner reported that families earning around £100k annually, with two children in day school, could be left with less disposable income than minimum wage earners after VAT was applied to average private school fees. 6 Because they are too wealthy to be eligible for assistance and too impoverished to bear the additional expense, this strained segment of society, known as the ‘squeezed middle’, faces a conundrum. Consequentially, the number of private school students in England this January has dropped by 11,000 since last year, far exceeding the previous predictions which estimated that just 3,000 students would be absorbed into the state system. 7 The number enrolled in private education is likely to drop further year on year, putting extra pressure on an already overwhelmed state system but importantly reveals flaws in Labour’s long-term strategy. Ultimately, as fewer pupils go into the independent sector, there will be fewer opportunities to charge VAT. Coupled with increasing pressure on the state sector, Labour may end up investing these extra taxes into a system made worse by their extra taxes, in a cycle which consistently squeezes and pinches the middle class. To make matters worse, the UK’s most elite private schools could in fact be set to benefit amidst the new VAT rules. By reclaiming the tax they have paid on capital projects like buildings and land acquisitions finished within the last ten years, VAT-registered institutions like Eton and Harrow may be able to benefit from large financial windfalls. As a result, the gap between the smallest and the richest private schools could widen, as elite schools are further able to market and improve themselves, while the poorer schools fight to keep down fees. Thus, even within the private sector, inequality and socio-economic mobility could worsen. More broadly, the alleged investment in levelling public and private education is offset by the widening of class divides, keeping socioeconomic mobility low.
6 ‘School fees leave families on £100k ‘with less than minimum wage’, The Times UK (2025) at https://www.thetimes.com/uk/education/article/families-private-school-fees-vat-gross-income- wh6qvwsrr#Echobox=1746076687-1. 7 McGough, K. and H. Agerholm, ‘Private school pupil numbers drop by 11,000,’ BBC News (2025) at https://www.bbc.co.uk/news/articles/c2lk2p7wpr4o.
8
Made with FlippingBook - PDF hosting