Labour’s VAT raid on private schools poses ‘existential threat’, says Gordonstoun head

The head of Gordonstoun has warned that Labour’s VAT raid on private schools poses “an existential threat” for many in the sector.

Lisa Kerr, the principal of the King’s former school, said the policy showed a “lack of understanding” about independent schools from Sir Keir Starmer’s party.

Addressing Labour’s VAT plans at an education conference on Thursday, Ms Kerr said: “It’s an existential threat for a lot of people in the sector and comes back to the point about a lack of understanding of the sector.”

She called for Labour to take a “deep look” at the potential impact of its proposed tax raid, warning that it could have “unintended consequences” for many private schools.

“I think many of the sector bodies recognise that it would have been really great if we had spent a few decades building a deeper understanding of the value that independent schools bring, not just in terms of income but to society as a whole,” Ms Kerr told a conference at Downe House, a leading girls’ private school once attended by the Princess of Wales.

“I don’t think any of us would argue that all education should not be properly funded but unintended consequences are really important to understand and I hope policy going forwards will be that there will be a really deep look at the consequences right across education and society of this taxation,” she said at the school in Cold Ash near Newbury, Berks.

It marks the highest-profile intervention over Labour’s VAT plans to date, with many in the sector privately venting frustration that the most famous private schools have stayed quiet on the matter.

Gordonstoun, which is Scotland’s largest private school, counts King Charles and his father, Prince Philip, among its alumni.

Founded in 1934, the school takes boys and girls from six to 18 and charges up to £35,601 for day pupils, with fees rising to £48,990 for full-time boarders.

Labour has promised to start charging 20 per cent VAT on private schools “as soon as possible” if it wins the general election.

Although education is devolved in Britain, the policy would apply to private schools across the UK since it relates to tax.

Many smaller private schools have warned that they will be disproportionately impacted by the plans.

They claim they will neither be able to absorb the additional 20 per cent costs, nor will parents be able to shoulder significant fee rises, leaving many schools scrambling to draw up contingency plans.

‘Our student body is unusually diverse’

Head teachers have also told The Telegraph that top fee-paying schools such as Eton and Winchester Colleges will largely be unaffected, since they will be able to afford the additional levy.

But the intervention by Gordonstoun breaks the relative silence on the matter from the UK’s most-expensive private schools.

The 550-pupil school in Elgin, Moray, was ranked as one of the top 10 most expensive UK private schools in this year’s Spear’s Schools Index 2024, among others including Harrow, Eton and Winchester.

Ms Kerr insisted on Thursday that private schools in Scotland add “half a billion pounds to the Scottish economy and that 100,000 people in Scotland that attended independent schools benefit from them”.

She also took a swipe at perceptions of the Gordounston as “old”, “rich” and white, saying: “Our student body is unusually diverse. We have over 40 nationalities at the school and nearly 40 per cent of pupils receive financial assistance to attend the school.

“We are an all-ability school giving children the opportunity to learn alongside those who are different from them.

“It’s a school where children are valued because of their differences, not in spite of them. It’s also a school which faces structural challenge.

“Despite our famous name, we are not an old school or a rich school. We have no endowment.”

Gordonstoun’s facilities include a climbing wall, rifle range and Scotland’s only five-hole golf course.

The school also owns a 80-ft sailing boat, Ocean Spirit, which is used to teach pupils sailing and makes “annual trips to destinations such as the Arctic”, according to the Good Schools Guide.

The school claims it follows the ethos of Gordonstoun‘s founder, Kurt Hahn, who believed in a “holistic” education that prepares pupils for life, not just exams.

Labour hopes to raise £1.7 billion from its plans to start charging VAT on private schools if it wins the election.

The party has pledged to spend it on recruiting 6,500 new state school teachers, rolling out a national “oracy” programme and ensuring all state schools in England have access to mental health counselling.

Sir Keir unveiled further plans on Monday to create 3,300 new nurseries, saying they would also be funded by Labour’s VAT raid on private schools.

The party’s manifesto, published on Thursday, contained few details on the VAT plans beyond stating that it would use the money to “invest in our state schools”.

A Labour Party spokesman said: “Labour will invest in delivering a brilliant state education for children in every state school by recruiting over 6,500 new teachers, funded by ending tax breaks for private schools.

“Independent schools have raised fees above inflation for well over a decade and do not have to pass Labour’s proposed change on to parents.”

Scottish Labour leader on levy: It’s right ... we’ll put more money into our state schools

Anas Sarwar has admitted he will not suffer any “hardship” as a result of his party’s plan to launch a tax raid on private schools.

The Scottish Labour leader, who was privately educated and has three children in fee-paying schools, said he endorsed the flagship policy to impose VAT despite the fact that it will likely cost him tens of thousands of pounds over coming years.

Mr Sarwar, who as an MSP earns £72,196, said he and his wife, an NHS dentist, cover the school fees for their children, which are likely to be in the region of £42,000 per year.

Labour’s plan to end a VAT exemption for private schools would therefore likely cost the Sarwars around £8,400 extra annually.

Asked about his personal situation with regard to the fees, he said he was “lucky” that MSPs were paid so much.

He also comes from a wealthy family, with his father, who was Scotland’s first ever Muslim MP, a self-made millionaire.

The cash and carry firm his father set up remains in the family but Mr Sarwar relinquished shares in it, said to be worth up to £4.8 million, when he first ran for the Scottish Labour leadership in 2017.

Asked whether he and his wife would have to make cutbacks to pay for the VAT policy, he said he was “more interested in outcomes for children across the country”.

He added: “I’m very fortunate, my children are very fortunate, but I want every child to get the best standard of education.

“That’s why it’s right we remove the VAT exemption from private schools and put more money into our state schools.”

Pushed over the implications for his own finances, Mr Sarwar said: “I’m not going to do a Rishi Sunak and try and do some pretence of hardship. I’m very fortunate that I do the job I do, I’m very fortunate that MSPs are paid what they’re paid.

“But there are far too many families who are struggling to make ends meet and that’s why we’re going to make work pay by giving over 200,000 Scots a pay rise.

“There are far too many children who have massive aspirations for themselves, and their family aspirations for them, who aren’t getting the support they need in our state schools.”

Mr Sunak, whose household wealth is estimated at more than £650 million, was widely mocked this week when he suggested growing up without Sky TV was one of the “sacrifices” he endured to fund his schooling at Winchester College.

The Sarwar cash and carry firm, United Wholesale, reported a turnover of £270 million and made a profit of £21.7 million in 2022, according to its most recent accounts.

Mr Sarwar put his shares in it into a trust for his children and cannot personally access them.

The Scottish Labour leader, who like Humza Yousaf attended Hutchesons’ Grammar School, admitted in 2021 that criticism of him for using private education were legitimate, after his manifesto for the Holyrood election claimed they fuelled social injustice.

He said at the time: “I accept the criticism, but that was a decision my wife and I made for what was best for our children.”

Mike Martin, the rector of Hutchesons’ Grammar, has said Labour’s VAT policy would “lead to fewer families being able to educate their children” at the school and heap pressure on cash-strapped local authorities.