Sunak’s disastrous decision to call an early election has cost parents thousands
As Rishi Sunak’s time as Tory leader came to an end yesterday, his decision in May to call a general election up to six months early remains inexplicable. The then prime minister’s disastrous call has had many unhappy consequences – but one group who should be especially aggrieved are parents who are struggling to pay their children’s school fees.
Mr Sunak’s May madness will cost parents with three children at London day schools at least around £5,000 – and much more likely £10,000. (Fees at something over £8,000 per term, so VAT at 20 per cent, a per child, per term cost of £1,600 plus. And as I explain, it is much more likely to have let hard pressed parents off two terms of VAT).
With his six children at a mix of London prep schools and much more expensive boarding schools, Mr Sunak’s fellow Tory Sir Jacob Rees-Mogg will be hit with extra demands of at least £15,000, if delayed for one term, and £30,000 if the much more likely two terms.
Labour can justifiably be accused of being, shall we say, less than honest about their tax plans before their election. The hike in employer National Insurance Contributions or the scrapping of the exemption of agricultural property on inheritance tax announced in Rachel Reeves’s budget were certainly not in the party’s manifesto – Labour did everything to give the opposite impression.
But that cannot be said about the imposition of VAT on independent school fees. This had been confirmed as Labour policy a full year ago and was an explicit manifesto commitment.
The ideological, class warrior VAT raid is an atrocious policy which hits smaller, poorer independent schools much harder than it will the Etons and Westminsters of this world. And this is not something that it is possible to ameliorate – it is a consequence of how VAT works. Rich school spend much more on capital projects, computers, sports facilities, etc. – much of which is VATable, which they will now be able to reclaim for the first time. Small independent schools spend the vast bulk of their revenues on non-VATable teacher salaries, so there is nothing to reclaim.
But unexpected, it was not. What was far less certain is when the policy was to be imposed. A particularly cruel feature of what Reeves has done is impose the tax in the middle of the school year, starting from January. Thousands of children are likely to have to uproot and change schools mid-year, with all the uncertainty and unhappiness that this will inevitably produce. It is a strange way to act for a Government that says it is deeply concerned about children’s mental health.
And here Mr Sunak’s decision to call an early election comes back in. If the election had been in October or November, as was widely expected, VAT could have been imposed at its earliest for the summer term - and more likely not until the new school year in September.
Labour took office on July 5 and the Budget was on October 30 – 117 days later. The long delay explained not just by Parliament’s summer recess but more importantly by the decision to pass all its plans to the Office for Budget Responsibility for assessment.
If the election had been held on November 14, a much touted date, Labour would have taken office the next day. 117 days on from then is March 12 2025, just over a month or so before this school year’s summer terms kick off. Even Reeves is unlikely to have thought that a month was enough time to implement the policy from its formal confirmation, especially as schools would be on Easter holiday for much of this period.
So no early election, no VAT this school year. And that equals thousands of happier children – and much less parental anxiety. Thanks for nothing, Mr Sunak.