Private schools could lose a third of pupils if Labour adds VAT to fees

A third of wealthy parents could quit private schools if Labour adds VAT to fees, a poll has revealed.

Many of those said they would have to move their children to a state school if the policy was enacted.

Labour is planning to add 20 per cent VAT to independent school fees if it wins the next general election, a proposal which it estimates will raise an extra £1.6 billion for pupils in the state system.

The tax raid would affect nearly three-quarters of private school families, the Saltus Wealth Index found.

Almost a third – 29 per cent – of those parents said the rising costs mean they would no longer be able to give their child or children a private education.

One in four parents said they would have to move their child or children out of private school and enrol them in a state school, just under half of whom said they would consider moving house to be in a better catchment area for high-performing state schools.

Half of parents who responded said they could keep their children in private education but would have to make changes – either moving them from boarding to day pupils or finding a cheaper school.

A quarter said they would be unaffected by the VAT increase on fees, a flagship policy of Labour, which is on track for a 1997-style landslide election victory this year, according to the latest polls.

In the Saltus poll of 2,000 people, conducted by Censuswide, some 25 per cent also accepted they would have to borrow money, either via a bank loan, longer mortgage or from friends and family, to afford the increase.

Mike Stimpson, a partner at Saltus, said: “On average, private school fees increased by 6 per cent from 2022 to 2023 and these are likely to rise by a further 5 per cent this September.

“If Labour wins the next general election and carries out its pledge to impose VAT on school fees, then we could see the cost of private tuition rise by at least a further 20 per cent in the years to come.

“According to our latest research, price rises over the past few years are already having a significant impact on parents’ ability to pay and further rises will almost certainly price some families out of private education completely.”

Julie Robinson, chief executive of the Independent Schools Council, said it was “particularly concerned about the disruption to education for children receiving special educational needs support, for military families and for those choosing faith schools”.