Labour has hit back at Conservative attacks on its pledge to put VAT on private school fees, with analysis showing a drop in partnerships with state schools.
The party has been accused of starting a “class war” against private schools though Labour sources said the Conservative’s 2017 manifesto had also promised to review whether to charge VAT on school fees if partnerships with state schools did not increase.
The manifesto states: “‘We will keep open the option of changing the tax status of independent schools unless their partnership work increases.”
Partnerships between private and state schools can take a number of different forms, including sharing facilities or expertise, invitations to events, or even sponsoring academies – in the case of some larger schools.
Figures show partnership work has declined since 2017, when the annual report for the Independent Schools Council found there were more than 10,000 partnerships. According to the same census in 2021 there were just over 6,900, though the ISC said Covid had made partnerships more difficult.
“Partnership work was at a record high pre-Covid, with 11,720 partnerships,” an ISC spokesperson said. “However, in 2020 and 2021, partnership work was impacted by Covid uncertainty and regulations imposed by the government – in some cases, it would have been illegal to carry out partnership activities during lockdown.
“However, many adapted by donating to food banks, by helping schools move to online learning or by manufacturing or purchasing PPE. Now Covid is no longer a factor, partnership work is recovering and is growing again year on year.”
But a Labour source said the pandemic would have meant schools were in greater need of assistance, including with equipment loans or joint Zoom sessions, saying it did not necessarily follow that partnerships should have been dropped.
The levelling up secretary, Michael Gove, also previously backed the removal of the VAT exemption. Writing in the Times in 2017, he said: “Private school fees are VAT exempt. That tax advantage allows the wealthiest in this country, indeed the very wealthiest in the globe, to buy a prestige service that secures their children a permanent positional edge in society at an effective 20% discount.
“How can this be justified? I ask the question in genuine, honest inquiry. If Times readers can tell me why we should continue to provide such egregious state support to the already wealthy so that they might buy advantage for their own children, I would be fascinated.”
A Labour source said: “[Rishi] Sunak’s political judgment is shot to pieces. Running out of ideas to attack Labour, his attempt to create a ‘wedge’ issue has only served to reveal the wedge on private schools within the Conservative party.
“He might end up on the right side of voters if for once if he actually fulfilled a manifesto pledge and got rid of these indefensible tax breaks.”
The Daily Mail reported that Labour’s plan to charge VAT on school fees could mean the forced closure of about 200 schools.
No 10 has backed keeping the exemption, saying: “Independent schools have an important role to play in providing further opportunities for children across the country through targeted bursaries and by working with local state schools to share expertise, best practice and facilities.
“It is because of the important educational service they provide that they are exempt from VAT.”