Private schools would not have to pass costs of Labour’s planned VAT rise to parents, says Sir Keir

Private schools will “have to ask themselves” whether to pass Labour’s VAT rise on to parents, Sir Keir Starmer has said.

Amid growing controversy about the proposed move’s effects on middle-class parents, the Labour leader said that private schools would not have to pass on the costs of the raid via fees.

It came as the party quietly dropped its previous plan to remove the charitable status of private schools, meaning that they are set to still benefit from other tax breaks such as gift aid.

This week it emerged that if Sir Keir becomes prime minister, within his first year in office he will charge private schools 20 per cent VAT and scrap their business rates relief.

Speaking on the BBC podcast Political Thinking with Nick Robinson, the Labour leader defended the policies but said they did not have to result in higher fees.

Sir Keir said that his proposed tax rise “is not an attack on private schools”.

He added: “It’s just saying an exemption you have had is going to go. I would add that it’s the VAT on schools that we are taking away.

“The school doesn’t have to pass this on to the parents in fees. And each of the schools is going to have to ask themselves whether that’s what they want to do.”

The comments will add pressure on headteachers not to pass on the effects of the policy directly to families, should Labour win power.

The remarks came as it emerged that Labour had quietly walked back a different flagship promise when it comes to private schools – removing their charitable status.

Sir Keir told the Sunday Mirror in 2021 that “we can’t justify continued charitable status for private schools”.

Bridget Phillipson, the shadow education secretary, outlined a similar position as recently as this January during a Commons debate.

But in a statement issued to the i newspaper on Wednesday, a Labour spokesman confirmed that charitable status will not be removed if the party wins office.

The statement read: “Our policy remains. We will remove the unfair tax breaks that private schools benefit from, to fund desperately needed teachers and mental health counselling in every secondary school.

“This doesn’t require removing charitable status, however, driving high and rising standards for every child against the backdrop of a broken economy requires political choices. Labour isn’t afraid to make them.”

There had been warnings that the change would have wider legal implications that were not the intended impact of Labour’s reforms.

It is understood Labour has no plans to stop private schools benefiting from charitable status in ways such as such gift aid.