Affordable private schools should be exempt from tax raid, says Labour MP
Private schools that charge less than £6,500 per year should be exempt from the Government's VAT raid, a Labour MP has said.
Rachael Maskell, MP for York Central, is the first member of her party to criticise its controversial policy to implement a 20pc VAT on private school fees from January.
She called for a "zero rating for VAT" for private schools which charge the lowest fees and are often located in the most deprived parts of the country.
Parents often choose these institutions because of "poor experiences they have with state schools" and many are "working class families" who are "living hand-to-mouth", Ms Maskell said.
Labour has said its VAT plans will raise around £1.5bn to spend on raising state school standards. The party has outlined plans to spend the money on recruiting 6,500 new teachers, 8,500 mental health specialists and 1,000 care advisors.
However, Ms Maskell is producing her own report, due to be published next month, which will examine whether the policy is "causing more divides, rather than less".
She said: "I think we need to take a proper look at the realism of this policy. If it's announced in the Budget, it will come in the finance bill in November. Schools usually break up in early December, and then their VAT systems will need to be set up before the new tax year. Is there really enough time?
"My report will look at the impact of schools closing on other secondary schools in the local authority."
She added: "I think we should be looking at whether there could be a level below which the policy doesn't apply. So for example, making sure fees lower than £6,500 per annum get a zero rating for VAT."
It's not the first time Ms Maskell has called for VAT to be levied in proportion to the fees of each school. Earlier this month, she wrote to Chancellor Rachel Reeves and asked if she would make "an assessment of the potential merits of introducing a lower rate of VAT on independent schools with lower fees".
But her question was ignored by Ms Reeves and instead answered by her exchequer secretary, James Murray, who said the Government's position was to impose VAT on all private schools at 20pc.
She then voiced concerns in Parliament over fears the policy would force the closure of York Steiner School, a small independent school in her constituency.
The school, which follows the teaching methods of Steiner Waldorf, charges pupils based on household income.
Fees begin at £3,090 a year for families with a household income of less than £20,000 and rise to £10,042 a year for households above £80,000. On average, pupils pay £5,500 a year.
Ms Maskell told The Telegraph: "It's a school charging some of the lowest fees in the country. Parents are really going to struggle if VAT is applied to these. I then also have a high-end private school in my area, and two Quaker schools.
"At the Steiner school here, many parents are living hand-to-mouth, making sacrifices daily. They're working class families who can't pay upfront – something parents in higher level private schools are doing [to try to avoid the policy].
"This raises the issue of the policy giving richer families additional privileges over poorer ones."
Last month, a private school announced it would close at the end of the term as a result of the VAT raid and blamed Labour for pricing out its working class parents.
Roisin Maguire, former headteacher at St Joseph's Preparatory School, said: "This is a school in one of the most deprived areas in the country in Stoke-on-Trent. It's not serving a wealthy affluent population.
"I know what people say, if those parents chose [private education], they should pay everything, but actually those parents already pay their taxes and... some are working class people who have worked really hard."
It became the ninth private school to announce its closure since The Telegraph revealed Alton School in Hampshire would shut down in May.
Its closure will take the total number of displaced pupils to 1,140, according to the most recent pupil figures from the Department for Education.
The Government was contacted for comment.
A spokesman previously told The Telegraph: "We want to ensure all children have the best chance in life to succeed. Ending tax breaks on private schools will help to raise the revenue needed to fund our education priorities for next year, such as recruiting 6,500 new teachers."
