Is Sir Keir Starmer being honest about Labour and private schools?

In yet another U-turn, the Labour leader has apparently softened the party’s stance on private education. But, as Sean O’Grady explains, a huge increase in fees still looms for many aspirational voters

Private education is a moral issue for many Labour members (PA)

Labour has announced that fee-paying schools will retain some of their tax breaks if they win the general election. It represents yet another U-turn on policies that looked apparently permanent even a few months ago: child benefit, the green new deal, childcare and income tax rises for top earners have all seen “revisions” and rethinks.

However, Labour is insisting it will still make private schools liable for VAT at the full 20 per cent rate. Some Labour supporters, viscerally revolted by private sector education, are angry about the move; many more wonder what Sir Keir Starmer is up to…

Is this another U-turn?

Yes. In a speech last summer, Sir Keir pledged: “When I say we are going to pay for kids to catch up at school, I also say it’ll be funded by removing private schools’ charitable status.”

Bridget Phillipson, the impressive shadow education secretary, also left no room for doubt last January that she would be “scrapping charitable tax status for private schools to fund the most ambitious state school improvement plan in a generation”.

The change in stance is presented almost as the correcting of a misunderstanding, as if they’ve realised they no longer need to strip the schools of charitable status to fulfil the wider commitment to charge 20 per cent VAT on fees and make independent schools pay business rates. Schools will thus still be able to claim gift aid (tax relief) on donations and some other perks.

Is there anything else to it?

It could be that Labour wants to blunt any Tory attack lines that suggest it is against aspiration. A typical example would be of a family that gives up foreign holidays or a new car in order to pay for their children’s education. Indeed, in recent decades the proportion of children at independent schools has been creeping up, markedly so in sixth forms. It varies across the country, too. According to the Institute for Fiscal Studies, 6.4 per cent of pupils in England in 2021, 4 per cent in Scotland, 2 per cent in Wales and less than 1 per cent in Northern Ireland were in the fee-paying sector (albeit some on bursaries and assistance). As many as 18 per cent of England’s school pupils aged 16 to 19 are in the private sector, and the privately educated have a disproportionate presence at Cambridge, Oxford and other high-status universities. These institutions deploy some 15 per cent cent of the resources devoted to schools.

Arguments about equality versus aspiration are well-rehearsed, and attitudes tend to be fairly well-entrenched. Thus, it would work well as a political dividing line, but probably shift relatively few votes.

Would Labour do away with fee-paying schools?

No, though they have come close. During Jeremy Corbyn’s leadership the 2019 general election manifesto pledged: “We will close the tax loopholes enjoyed by elite private schools and use that money to improve the lives of all children, and we will ask the Social Justice Commission to advise on integrating private schools and creating a comprehensive education system.” That sounds suspiciously like stronger state control, if not outright nationalisation of private schools. We’ll never know.

But the party’s instinctive hostility to such institutions is usually confined to rhetoric, and the convention that no Labour candidate nor MP can send their child to such iniquitous places (often extending to distaste for state selective schools). Some senior Labour politicians, such as Diane Abbott – and indeed Tony Blair – have pushed their luck in the face of such shibboleths; other senior Labour figures with a pragmatic mindset have dodged the issue by opting to operate from the House of Lords instead of the Commons (Lords Adonis and Falconer, for example). Private education is clearly a moral issue and unpopular among party members, among whom teachers, and what Michael Gove dismissively called “the blob”, are well represented.

Will it mean higher fees, even for not-so-rich families?

Common sense suggests so. A 20 per cent hike in fees would be simply beyond the means of families already making sacrifices. On the other hand, for the seriously wealthy the increase would hardly be noticed, and this is particularly true of those parents from overseas sending their child to the most exclusive of the schools.

The wealthier schools, with endowments and other sources of income might be able to absorb some of the extra costs, and reduce the amount of the rise in fees they pass on to parents. (Fees have tended to outpace general inflation for some time in any case). The schools might also make modest savings in their budgets, or sell surplus assets to help balance the books. Others might shrink in size or close.

One solution to this looming unfairness within the private sector set-up would be for the schools to copy the fee-paying model that universities have recently adopted, and charge overseas boys and girls much higher fees, using the revenues to subside those applying from within the UK. It’s not exactly means-testing, and there will be plutocratic British families for whom fees are not a problem, but some price discrimination would be a neat way of maintaining commercial viability while widening access for British children with brains and potential. From each according to their means…