Warnings of a mass exodus from private schools if Labour carries out its pledge to scrap their tax breaks have been dismissed by a leading economic thinktank. .
Research by the Institute for Fiscal Studies (IFS) found that Labour’s plans to add VAT to private school fees would generate up to £1.5bn in additional revenue, “a small but potentially worthwhile sum” providing a 2% boost in spending on England’s state schools.
The policy would have “a relatively limited effect” on pupil numbers, the research found.
Contrary to predictions of families quitting independent schools due to rising fees and moving their children into the already creaking state sector, the IFS said it expected higher fees would have “a weak effect” on demand, potentially reducing private school numbers by as little as 3% to 7%.
As the political parties set out their stalls for the next general election, the private schools policy has become one of Labour’s most eye-catching and hotly debated pledges. The latest IFS research answers some of the challenges to the policy, which others believe does not go far enough.
“If the main aim of removing tax exemptions from private schools is to raise revenue, then this is likely to be achievable,” the report’s author, Luke Sibieta, said. “If the aim is to encourage more pupils into the state sector and reduce inequalities by school attended, then this policy package is likely to have only minor impacts.”
