Parents affected by the closure of a private school have attacked Labour’s policy to introduce 20 per cent VAT on the institutions after scrambling to find new places for their children.
One father accused the Government’s levy of being “borne of resentment” of families who send their children to private schools, adding that he could not afford to pay higher fees.
Chancellor Rachel Reeves announced in late July that private schools will start paying VAT from January 2025 to help fund thousands more teachers in the state sector.
While proponents say the policy – which will apply across the UK – will help the struggling state school sector, others say it will put more strain on fee-paying parents and cause some institutions to collapse. Labour previously said schools would be able to absorb the fees and that parents may not have to pay more.
Cedars School in Greenock, near Glasgow, was one of two fee-paying, independent schools in Scotland that announced closures in August.
The board of the small Christian school told i that Labour’s tax plan was the “straw the straw that broke the camel’s back”.
Douglas Marks, whose 12 and 14-year-old sons went to Cedars School, told i it appeared Labour was “happy to make families like us suffer”.
Mr Marks, a lecturer in behavioural sciences, and his wife were paying around £15,600 a year in fees for their two children.
After the school announced it was closing on 13 August, the couple decided there was not an affordable alternative in the private sector for their sons.
Instead, they joined the scramble to find a place for them at a local comprehensive before term started in late August.
“We hope they will be fine. I worry about the bigger class sizes, but they will adjust,” said Mr Marks.
“We’re not elitists. We’re not wealthy people sitting on millions. We couldn’t stretch to pay anymore. We would have had to sell our house, move somewhere smaller with a smaller mortgage to put the children in another private school.
“I think the policy is borne of resentment. I think they are resentful because they see people around them who have gone to Eton and other big private schools and think those people got a hand up.
“But the smaller independent schools are not like Eton – they don’t have huge funds. So more independent schools will close. And these are schools that are saving the state sector from finding and funding more places. So tearing us down isn’t socialism – it isn’t helping anyone.”
The Labour manifesto said ending the VAT exemption on private school fees would pay for 6,500 extra teachers in the public sector and 3,000 new nurseries.
The Institute for Fiscal Studies has said it could bring in £1.3bn to £1.5bn a year – adjusting for a three to seven per cent reduction in private school rolls if some parents are forced to pull their children out the sector.
Sir Keir Starmer said during the general election campaign there was no reason to believe these schools would have to close because of the 20 per cent levy.
The Prime Minister said the private schools would “adapt” to the VAT, arguing that they did not have to “pass on the costs” to parents in increased fees.
It emerged at the weekend that Eton College has told parents it is raising fees by 20 per cent to around £63,000 for most families as a result of the VAT policy.
The Cedars School board told i the school decided it could not afford to absorb the looming annual VAT bill of around £110,000.
They said a “significant proportion” of parents had also made clear after a meeting in early August that they would have to pull their children out of the school rather than pay any extra in fees.
“The school has had underlying financial problems – student numbers was an underlying problem,” said the spokesperson. “But the VAT decision is the straw that broke the camel’s back.”
The school is only staying open until late September to help the remaining families with the adjustment.
Martin Shaw, whose 14-year-old stepdaughter went to Cedars School, said the last few weeks has been “a nightmare for families”, adding that “many of them are still distraught”.
He is angry at the “misguided” Labour policy. “It’s Labour trying to sell themselves to people who have a problem with the idea of private schools,” he told i. “It’s surprising from Keir Starmer, because it’s Jeremy Corbyn stuff.”
But Mr Shaw is also angry at the school board for rejecting a proposal by a group of parents to raise funds to keep it going. He said they already had a commitment of £60,000 from families and a local business.
“We made clear there was still a chance for the school. I think we could have filled the gap. But they knocked back our ideas.”
Kilgraston School in Perthshire, a Catholic boarding school, announced in August that it was shutting down with immediate effect. The board of trustees said Labour’s VAT move was a factor in the closure.
Alton School in Hampshire and Downham Preparatory School in Norfolk have also announced their intention to shut, with both citing the looming VAT bill as a reason for closure.
Rudolf Eliott Lockhart, chief executive of the Independent Schools Association, called on the Government to create exemptions for smaller and financially fragile schools. “Some schools may not survive, leading to more closures than usual,” he said of the VAT change.
A Government spokesperson said: “We want to ensure all children have the best chance in life to succeed. Ending tax breaks on private schools will help to raise the revenue needed to fund our education priorities for next year, such as recruiting 6,500 new teachers.”
